Staffing.org Report - Recruiting costs are up

Staffing.org Report - Recruiting costs are up, but taking recruiters out of recruiting is not the answer.

New survey gathers data from nearly 4,000 organizations and 800 job seekers

Based on what continues to be the most comprehensive staffing performance survey in HR, recruiting costs have increased, efficiency has decreased and New Hire Quality measurement has climbed from 2% of participating organizations to 40%. These are just some of the findings reported by Staffing.org, which has just released its annual Recruiting Metrics and Performance Benchmark Report.

The new report contains data from almost 4,000 organizations, over 800 job seekers and 400 employees. Staffing.org is a leading source of information, metrics, processes, practices, tools and resources to measurably optimize the performance of people and work.

In its first report seven years ago, over 90% of organizations surveyed insisted that New Hire Quality was critical, yet less than 2% of them were making any attempt to measure it. This year, quality remains the top priority but now 40% of organizations are measuring it.

Only eight of the 27 industries analyzed spent more on internal recruiting expenses (operating expenses such as staff compensation) than on external recruiting expenses (primarily sourcing, such as job boards and agency fees). Increases in external expenditures are also outpacing increases in internal expenditures.

The average efficiency for all industries -- 84.2% -- has dropped 3.4 percentage points from last year and 1.7 percentage points from 2000. Pharmaceuticals and biotechnology continue to be the least efficient industry at 77.2% (a 1.4 percentage point drop from 2004). The energy sector, which has a Recruiting Efficiency of 91.7%, had the best efficiency.

Although there are indications that some recruiting practices and structures may foster better performance than others, the data indicates there is no single best way to recruit. There is no correlation between organizational structure, insourced or outsourced operations and a higher efficiency. Staffing.org expects that to change as organizations monitor their performance more closely.

ìYou canít take the recruiter out of recruiting. The lack of direct communications is turning off candidates,î explained Nick Burkholder, founder of Staffing.org. ìThe single greatest improvement opportunity area for organizations is candidate communications. This has given second tier organizations the opportunity to out-recruit top tier organizations and theyíre taking advantage of it.î

While a majority of employees are dissatisfied with immediate management, that is not a primary reason for changing employers, Burkholder adds. Rather, professional development is the biggest driver for employees looking to change employers.