Internal Transfers Growing As Leading Source of Hire

(the chart in this story was updated February 23)

Once again referrals have turned out to be the leading source of external hires in the annual CareerXroads source of hire survey. In 2008, 27.3 percent of the external hires made by the 45 large employers who completed the survey came from referrals made primarily by employees, but also by alumni, vendors, and others.

Corporate web sites — a destination and not an actual “source,” insists the report — was second with 20.1 percent of the external hires coming from there. Rounding out the top three were job boards, which accounted for 12.3 percent of the hires.

No big news in those results. For the last several years the survey that CareerXroads principals Gerry Crispin and Mark Mehler conduct every January has consistently found referrals accounting for about 3 of every 10 external hires made by the participating companies.

What is different this year is that 38.8 percent of all openings were filled by internal transfers and promotions.

“We found that very interesting, ” says Crispin. “That’s the highest number since we started this survey eight years ago.”

His explanation is that despite hiring freezes, critical openings still have to be filled. But, now that’s being done internally and the jobs the transfers leave are simply being absorbed by the remaining staff.

In the report, Crispin and Mehler put it this way:

“… the significant increase in the proportion of internal to external fills in 2008 versus 2007 (28%) is at least partially due to the deteriorating economic climate during 2008. We think this conclusion is further supported by the survey respondents’ estimate that the number of contingent workers employed by their respective firms decreased from 18% in 2007 to 10% in 2008. Clearly the data reflects a shift in emphasis to filling internally and squeezing external hires.”

The report also notes that some of the surveyed companies are filling almost half their vacancies by internal promotions and transfers. That’s something those companies should report on their career sites, Crispin and Mehler say, since it evidences their commitment to career development.

The survey report also identifies a few new trends and strengthens trends first noticed in previous years. Most notably:

Third party recruiters and agencies as a source of hires have been in decline since their zenith in 2005 when the survey indicated 5.2 percent of hires came from there. In 2008 that number had fallen to 2.7 percent, a decline exacerbated by the overall drop in hiring.
“Don’t place your bet on this side of the market having much of an upside when the economic climate reverses. It won’t,” the report says.
CareerBuilder has overtaken Monster among the job boards (28.9 percent vs. 23 percent of the total hires coming from job boards), but the report calls it a pyrrhic victory. “We believe this SOH has indeed peaked and predict it will diminish in the future.” However, the report suggests that all of the big, national boards are losing share to the niche sites, which collectively accounted for 36.2 percent of the hires coming from job boards.
Perhaps not surprisingly, not one of the surveyed companies said it planned to increase hiring in 2009. Showing the depths of the downturn, the companies collectively expect to hire 15.7 percent fewer employees this year than last.

Recruiters have come to regard the annual CareerXroads Source of Hire Study as a sort of guide by which to measure their own company’s sourcing. However, Crispin and Mehler caution that, “we seek to stimulate discussion about staffing issues rather than encourage blind acceptance of data at face value.”

The report is compiled from data reported by 45 firms (out of more than 200 invited to participate) who collectively filled 309,600 openings last year.

Note: The chart accompanying this post has been updated to include two categories omitted from the previous version.