Staffing Trends

Sep 2, 2008
This article is part of a series called News & Trends.

Last month, DoubleStar conducted a survey to determine the current state of recruiting practices in a cross-section of organizations. The survey was sent to recruiting leaders and decision makers in mid- to large-sized organizations across all industries. The results are not a summary of best practices but a snapshot of current actual practices as they exist today.

The findings (full report available) are interesting. For example:

• 95% of organizations are operating without a dedicated sourcing function. Further, 28% of organizations reported that their recruiters are performing all of the sourcing.
• 44% of organizations are engaged in some level of recruitment outsourcing. However, 82% of these organizations outsource less than 25% of their total positions.
• The biggest impediments to recruitment success are the ability to find quality candidates and process delays caused by hiring managers.
• Only 21% of organizations are using Web 2.0 tools for recruiting, with only 1% considering themselves experts. LinkedIn and industry-specific sites were reported as being the most effective.
• The most commonly tracked recruiting metrics are time-to-fill, time-to-start, first-year turnover, manager satisfaction, and cost-per-hire. Few organizations reported tracking more sophisticated measures.

The survey’s overall results show that recruiting is a function in transition from older practices to more modern ones.

First, with 44% of companies engaged in some degree of outsourced partnerships for recruitment services, RPO is gaining increasing traction as a viable option for solving recruitment challenges. In most (82%) cases, companies are outsourcing less than 25% of their openings, showing a trend to move slowly into outsourcing partnerships. With 62% of companies reporting that they intend to maintain that level of outsourcing within the next 12 months, it seems likely that companies will continue to adopt RPO solutions in select areas but on a somewhat limited basis.

This data also points out just how much room there is in the marketplace for the RPO industry to expand.

With 47% of companies reporting all of their recruiting work is still executed by direct employees, it will be telling to watch over the next two years how much of that work moves to outsourced partners, and how fast.

Secondly, it is clear that talent management is in its formative years as a function, with implementations ranging from fully formed, to partially formed, to unformed. Interestingly, there is little integration (only 13%) of the external recruiting function within talent management. It seems to us that knowing the external talent landscape is a critical data input for making informed, accurate internal talent management decisions, and we are surprised that many firms are making critical internal decisions with seemingly little or no regard to the external talent market.

We expect that as talent management matures and grows more robust, we will see companies move to models that fully integrate internal talent movement, talent management, and external recruitment, and that data from all sources will be considered fundamental to forming effective and accurate workforce planning strategies.

There are interesting paradoxes in some of the recruiting staff deployment data. For example, the No. 1 challenge that inhibits recruitment success is the inability to source and find qualified candidates for critical, hard-to-fill positions. These positions, in most cases, account for 25-50% of a recruiter’s workload.
Yet, nearly all companies have recruiters working on positions that are filled with internal and external candidates. On the face, time spent handling internal movement takes away valuable time for external sourcing and relationship development that is critical for finding high-demand talent. So, in a very real sense, recruiting functions are architecting their way into delivery problems.

Another paradoxical finding was that although sourcing was cited as the No. 1 issue, only 5% of companies have dedicated sourcing functions. It seems obvious that if sourcing is the number one issue, but no staff is dedicated to sourcing, then the problem will persist, and perhaps worsen. This is especially true when recruiters are unable to focus 100% on the external market.

The data also revealed a relatively slow adaptation of Web 2.0 tools and methods, with less than a quarter of companies regularly using any Web 2.0 or social networking tool in their recruiting solution. Additionally, most companies report that they are measuring only the most fundamental of staffing metrics. This could be due in large part to the fact that most of recruiting’s key systems come with difficult-to-use or very limited reporting capabilities. The effective adaptation of Web 2.0 technologies and better analytics tools into daily recruiting delivery practice looks like the next significant technology challenge for recruiting functions.

Overall, the data seems to reflect that recruiting is experiencing an unsettled period. With RPO and Talent Management in their infancy, increasing competition for top talent creating sourcing issues, a lack of clarity around the best resourcing approaches to address the sourcing challenges, and the continuing need to adapt new technologies, leaders of recruiting functions are juggling a host of moving parts.

The companies that most accurately tie their recruiting functions to their business goals and build the solution set that enables efficient and effective recruitment delivery will fair well in this changing environment.

This article is part of a series called News & Trends.
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