Bersin & Associates released a new study that shows U.S. spending on talent acquisition rose 6 percent to about $124 billion in 2011 compared with 2010, with more of that spending focused on professional networks, social media and CRM technology at the expense of job boards and agencies.
The study, Talent Acquisition Factbook® 2011: Benchmarks and Trends of Spending, Staffing and Key Talent Metrics, contains responses from more than 400 organizations, and was conducted via qualitative interviews and online surveys of the Bersin & Associates database and the LinkedIn network.
It shows that while the volume of applicants for jobs is high, companies are still struggling to find quality candidates. The research also found that due in part to the costs and the difficulty of finding qualified candidates, companies with more advanced talent acquisition practices are fostering internal mobility programs to fill positions with existing employees.
“We estimate that U.S. companies are spending an average of $3,500 for every new hire brought into the organization – about three times the amount spent on training per employee,” said Josh Bersin, chief executive officer and president, Bersin & Associates.
“This large expense is primarily going to agencies and job boards today, but companies increasingly are turning to professional and social networks for their recruiting needs. Our research shows that talent markets are out of balance: even with the high unemployment rates in the U.S., companies must invest heavily in recruiting to find the ‘right candidate,’ leading to a greater-than-ever focus on social networks as a major new tool.”
Among the other findings in the report:
* Half of all U.S. companies decreased their agency spending this year. One reason for the shift is that agencies, while useful in recruiting for hard-to-fill positions, remain an expensive option. Companies spend more than a third of their recruiting budgets on agencies to fill just 8 percent of their positions.
* Recruiters are overloaded with resumes, but companies struggle to find quality candidates. Firms receive an average of 144 applications for every entry level/ hourly opening, and an average of 89 applications for each professional position.
* Nearly half of U.S. firms are spending more on contract recruiters in 2011 compared with 2010. The recession prompted most companies to reduce their full-time recruiting staffs. However, as the pace of hiring picked up earlier this year, companies brought in contractors to fill the void.
* Job boards are not dead, but dying. While job boards remain the leading source for external hires, accounting for 19 percent of all hires, Bersin said, “with dramatic changes in the talent acquisition market, job boards risk becoming obsolete.”
As we all head off toward our Thanksgiving holidays, it’s worth considering the question: Is your organization’s recruiting process ready for these “dramatic changes” that lay ahead?