Factbook Can Help You Compare Your Recruiting Efforts

Four years (give or take) into recruiting’s embrace of social media, it turns out that job boards are the most productive source of new hires.

Where social media sources register a barely discernible 1 percent of all hires, job boards produced 19 percent. That was matched only by internal transfers; even referrals came in lower — 16 percent.

These are among the surprising, and not so surprising, bits of data developed from a survey of 414 employers conducted by HR consultants Bersin & Associates. Compiled into the Talent Acquisition Factbook 2011, and authored by principal analyst Karen O’Leonard, the 100 page volume offers details on the recruiting metrics from employers as small as 100  workers to those with more than 10,000.

Josh Bersin, founder of the eponymous firm, said the genesis of the factbook came from the company’s clients and conversations with many others since Bersin launched his talent acquisition practice a few years ago.

Employers, he said, “are anxious for a lot of information.” But there wasn’t much detailed bench-marking generally available. It wasn’t easy for employers to get answers to questions like: Are my recruiting costs in line with other companies? Am I spending my money effectively Am I getting the kind of results others are?

Now they can.

Some of the data — such as cost per hire, source of hire, time to fill — is widely available and in more detail.  The Society for Human Resource Management has data on a number of important recruiting metrics, including cost per hire and time to fill, the traditional recruiting effectiveness measures. The Prinzo Group offers a series of reports on talent acquisition metrics. Annually, CareerXroads publishes a source of hire survey, based on responses from the firm’s roster of mostly Fortune 500 companies.

Bersin’s factbook includes those types of metrics, but breaks down the responses by company size, and industry. In other areas, such as the report’s section on quality of hire metrics being used by employers, offers insights not readily available.

The report also draws conclusions and makes recommendations based on the data. Regarding job boards, for instance, authoir O’Leonard writes:

While the landscape is changing, job boards certainly are not dead. To the contrary, 81 percent of organizations say they will spend on job boards this year. However, we expect that organizations will use job boards more selectively, for certain types of positions and in certain geographies…

(Incidentally, CareerXroads found job boards accounted for 24.95 percent of new hires in 2010. Referrals represented 27.5 percent in the CareerXroads report. The data, however, is not directly comparable since the report separated new hires from internal transfers, while Bersin’s survey asked about how all open positions were filled.)

Some of the more telling points in the factbook deal with the use of social media. Despite all the chatter about social recruiting, most companies spend next to nothing on that strategy and, not surprisingly, make few hires from all their friends and fans and followers. “General social media,” as the factbook describes sites not principally intended for professional networking, produced 1 percent of hires. Only the largest employers hired more — 2 percent.

O’Leonard notes that the reason for the low spend — 1 percent of the recruiting budget — is that social media’s costs “are negligible”, and that when money is spent there it typically comes out of a centralized marketing budget. “Converting candidates reached on social media to hires,” O’Leonard writes, “can be a time consuming-process.”

On the other hand professional networking sites like LinkedIn account for 10 percent of the hires, but companies only spend 3 percent of their external recruiting budgets there.

With all the energy being put into social media, the results reported by the surveyed companies seems meager at best. “A lot more hype than reality,” is   Bersin’s assessment. However, when companies use sites like Facebook and Twitter as a marketing and brand building tool, they get results, he said. Social media, he says, “is being used effectively to build pipelines.” But when candidates decide to apply, they go to the company career site, he said.

One important, and oft-ignored area that the Bersin factbook to its credit takes a stab at addressing is quality of hire. More than a few companies attempt to close the loop and track the performance of new hires back to the source of their application, as well as the recruiter who presented them.

“Recruiting teams can look at a number of measurements to determine new-hire quality, including new-hire performance assessments, hiring manager satisfaction, candidate satisfaction and new-hire retention,” O’Leonard writes. However, more than 25 percent of companies do nothing, she adds.

This section of the report details the kind of measurements companies do use, though the data here is limited to just a few charts specifically regarding use of performance reviews and turnover data.  Still, it offers guidance to companies who want to become more data-driven, but aren’t sure what to measure or where they stand.

That’s exactly how Bersin hopes employers make use of the factbook. “First,” he says, “Are they in the right ballpark?” The data can be used to analyze their own spending, source of hire, and basic productivity measures.

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Second, he says, the factbook can help recruiting leaders determine how to allocate their sourcing dollars.

“Really, Bersin, says, “what this is about is where do they fit. It gives them something to compare (to).”

Taking a broader look at the survey results, Bersin said, “It tells me that (recruiting) is expensive. It is not cheap to do it well.

“It tells me that companies are spending more right now… It may be even harder because there are so many candidates.

“It shows that there is a pretty substantial change in using social networks.

“It tells me that the recruiting industry is very complicated.”

About the Author

John Zappe is contributing editor of ERE.net, and the former editor of the now closed Fordyce Letter. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. 

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him by clicking here.

  • Chris Hoyt

    I find these types of studies and papers both fascinating and frustrating at the same time. While I can appreciate not releasing the details received from specific companies by name, I’m always curious what companies took part in the survey and data collection.

    In this case it’s nice to know that 158 mid-sized US based companies responded, but (in my humble opinion) it lends no credibility to the data if I don’t know who the companies are.
    [disclaimer: I’m talking about these types of reports in general – I don’t know if the Bernsin data shares company names within the report or not]

    Those of us who have been doing this on the corporate side for a considerable amount of time know that there are some companies putting forth efforts that should be applauded and/or watched closely and other organizations that are saying they do X or Y but make no real investment from a $ or headcount perspective (but enjoy providing ‘results’ or ‘feedback’)
    To me, this makes a considerable difference when it comes to the credibility of the data that gets pushed out as “findings” for the recruiting industry to consider as a whole.

    I’d like some transparency, please.

    As to this particular report, I can appreciate the breakdown of companies shown within the executive summary – as well as some of the interesting data points, but are the companies listed anywhere within this $1,000 document? If so, it’s something I might consider stepping up to both purchase and support.

    But hey, maybe I’m just crazy like that.

  • Keith Halperin

    @Chris: The report costs ~$1,000? Who but the very largest/richest firms are going to be able to use its information?

    Keith

  • Chris Hoyt

    Hi, Keith. No argument there, but I can appreciate the time and resources that go into putting something like this together. No doubt all participants (whoever they are) get a free copy.

  • Keith Halperin

    @ Chris. It must be very expensive to produce.

    -kh

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  • Steven Landberg

    Interesting information but it is for ALL recruiting being done by a company and is not segmented by level. Recruitment approaches and sources of hire vary substantially by college graduates, early career, mid level, and executives.

    Claymore Partners has conducted a series of 7 surveys just for the executive level which provides a different perspective where job boards and corporate sites are much lower and search firms are much higher along with internal recruiters. We are happy to send a summary of those findings to interested hiring organizations by contacting me at slandberg@ClaymorePartners.com

    Steve

  • http://www.CollegeRecruiter.com/weblog Steven Rothberg

    It is niice that the job board industry seems to be enjoying a renewed sense of appreciation as there was a time when it seemed the so-called experts were all busy predicting (hoping?) that we would perish sooner rather than later.

    That said, a quote in this article raised a red flag to me. Bersin states that social media sites can be helpful as branding tools and I strongly agree, but then also states that candidates tend not to apply on those sites but on the employer’s web site. True, but why does that matter. I trust he wasn’t looking at the employer’s web site as the source of hire in that o any other situation. By definition it can’t be — ever. It is a destination but never a source. Perhaps John Zappe can clarify the significance of that quote.

  • Chris Hoyt

    @Steven L. – You had me until you began to plug your products/services. Then the credibility of your comments and intent went right out the window – for me, at least.

    @Steven R – I would disagree with you if you’re saying that ‘where’ the candidate applies doesn’t matter – especially as more companies integrate the social aspects of various communities into their sites and continue to investigate delivering 100% of the application process into social networks. These are the metrics we want as the processes continue to evolve. These are the things that help make decisions around investments from both a marketing and resource perspective. (although I don’t disagree at all that your career website should ever be counted as the exclusive “source of hire” for anyone!)

  • Steven Landberg

    @Chris Hoyt

    FYI – our report is FREE and we do not sell research as Bersin does so if I am promoting a free alternative and you find that offensive and negating of my comments then what do you think about the Bersin direct promotion of their products/services?

    BTW – the candidate uses multiple sources to find out and check out opportunities in our experience.

  • Keith Halperin

    Hmmm. ISTM that “where” or “how” a candidate applies is less important than how quick and easy it is for them to do so, and what happens after they do.

    Cheers,
    Keith

  • Todd Raphael

    I think the difference between an “employee referral” and “someone who came via a job board or social media site” will start decreasing a bit. I mean – isn’t that the point of so many of these new tools and widgets and so on, many built over the last year and a bunch of others I am hearing are in progress … that your employees can more easily use social media to find out who they know and who knows those people, and refer them? So if I refer a friend of a friend, via LinkedIn, they came from a referral but also from social media.

  • Chris Hoyt

    @Keith – I’d say that’s a great point to argue depending on resources required. All items, where, how, how quickly, etc. are factors that I want the data around if you ask me.

    @Todd – agreed. I track multiple sources and am working to try and ecipher if there is any value to weighting first and last differently (and by type of job and type of candidate.) I’ve already seen after nearly 3 years of collecting data at PepsiCo that there is a correlation between seniority of candidate, source of attraction, source of apply and passive/active communications and acceptance.
    I think these are all things we need to be watching to help us make more informed marketing and engagement decisions.

  • Keith Halperin

    @ Chris: a valid point. If I’m paying for something, I want to know how well it works. At the same time, as recruiters (and not as data entry people or data analysts) we need to recognize that tools, metrics, and processes are all means to the end of getting good butts in chairs as quickly easily, and affordably (or as meany of these three as we can manage)as possible.

    Happy Holidays,

    Keith