U.S. companies have increased their talent acquisition spending 7% on average. But agencies and third-party recruiters claimed just 18% of that recruiting budget in 2014, down from 38% in 2011, as organizations switched to a variety of less costly channels, including professional networks.
The findings appear in the Talent Acquisition Factbook 2015, just released by Deloitte. The report puts the average cost to fill an open position now at $4,000, nearly three times the average amount spend on training per employee.
“As the economy continues to rebound and the job market becomes more transparent than ever, organizations recognize that spending money strategically on recruitment, employment branding, sourcing and the entire candidate experience is critically important,” said Karen O’Leonard, vice president, Benchmarking & Analytics Research, Bersin by Deloitte.
Professional networking sites saw allocation triple to claim 12% of recruiting budgets on average in 2014 from 2011, when only 4% of budgets were allocated to this source.
Despite the increased spending on professional networks, the research shows that company websites drive more hires than other sources, followed by job boards, and internal candidates.
“Job candidates now routinely use company websites to assess a firm’s strengths and help determine whether they would be a good fit with an organization before even applying for a job,” said Robin Erickson, vice president, Talent Acquisition Research, Bersin by Deloitte. “This suggests that while candidates may learn about a company or a particular job opening through networking sites or social media, they typically apply for jobs via company websites. These factors make employment branding and ease of website navigation critical aspects of ensuring an excellent candidate experience during the application process.”
In addition, the study found that:
- As the economy got back on track and organizations began to rebuild their workforces, employees realized they had more employment choices. This created a competition for talent that has resulted in longer timeframes to fill vacant positions. Overall, companies are finding it takes 52 days on average to fill open positions – up from 48 days in 2011.
- Health care organizations had the largest increase in spending among industries at 16%. This may reflect a federally-reported increase in job openings in this sector during the year. Health care also saw the largest new-hire turnover at 17% compared with 10% turnover among manufacturing firms.
- The most mature recruiting organizations – those considered strategic enablers of the business and where talent acquisition leaders have an active and influential “seat at the table,” spend $6,465 per employee, on average, as compared with only $3,258 among those organizations at the lowest level of maturity with reactive, tactical recruiting. High-impact organizations have 40% lower new-hire turnover and are able to fill vacancies 20% faster than companies with tactical recruiting functions.