Study: Employers Are Going Back to Outside Recruiters For Hiring Help

With the worst of the recession behind, employers are again turning to outside recruiters for help filling their more challenging positions.

In the annual Source of Hire study from recruiting consultancy CareerXroads, three dozen of the largest U.S. employers report an upswing in their use of retained and contingent recruiters. The 3.1 percent of the jobs they filled in 2012 through agencies is still a shadow of the 5.2 percent they filled that way in 2005, but it does represent an improvement from 2009. That year, employers filled only 2.3 percent of jobs via external recruiters.

It’s too early and the data too limited to say if this represents a broader trend.

A growing reliance on outside agencies

The authors take pains to point out the deficiencies in the report issuing this strongly worded caveat:

Every Source of Hire study, including ours, is unequivocally and fatally flawed as incomplete, inaccurate, unreliable and lacking even face validity against almost any hypothesis.”

However, CareerXroads has been conducting this survey since 2001, making it possible to say that at least among these respondents, which collectively filled 185,450 openings last year, they are growing their reliance on outside agencies.

In fact, of the total jobs they filled in 2012, 54 percent of them were external hires, which means third party recruiters filled about 3,000 jobs. The 2012 external hiring was down by 5 points from 2011 when 59 percent of the hires were external.

Noting that the U.S. reliance on search firms is low, especially when weighed against the practice globally, report authors Gerry Crispin and Mark Mehler observe, “We believe the Agency numbers for specific levels (Executive) and specialties (hard core IT) as well as smaller firms would be significantly different.”

Biggest number of hires still come from referrals

Xroadssurvey2013Referrals, of course, were responsible for the biggest percentage of external hires, accounting for 24.5 percent of the total.

That’s the lowest percentage CareerXroads has reported since 2001. In 2011, the companies in the survey said 28 percent of their external hires were the result of referrals.

The company career site was responsible for 23.4 percent of the external hires, followed by job boards, which yielded 18.1 percent of the external hires.

While the report says job boards “Definitely are not dead but trending down,” the last several years have seen a blurring of the lines among job boards, company sites, and social media, especially in regard to figuring where LinkedIn belongs.

For example, when an Indeed or SimplyHired sends a job seeker to a company career site, which is the proper source of hire? LinkedIn, which sells both resume searching and job postings, is categorized as social media. But described that way, it could just as easily be a job board.

As the authors explain:

For example, the last two years we have categorized LinkedIn under Social Media and most respondents either were already doing that or could do it. However, hires attributed to LinkedIn posts outweigh hires attributed through recruiters’ proactive searches and this would have added to the Job Board category.

Some firms would prefer to attribute LinkedIn hires to Direct Sourcing efforts rather than Social Media. And, while most hires attributed to Job Boards are a result of posting, some are the result of Sourcers searching and Direct Sourcing via the Job Boards’ resume databases. In this latter case, the attribution may very well be under Direct Sourcing.”

Article Continues Below

Job boards still a big factor

Intern-v.-External-hiring-2012The survey did ask companies to describe how they mostly used job boards.

A majority — 60 percent — reported mostly just posting jobs; 8.6 percent said they mostly searched the resume databases; 5.6 percent did both in about equal amounts.

The balance did both, but leaned more one way than the other. Among the job boards, Indeed yields the most external hires, 29.1 percent.

It’s important to note that temp and contract labor was specifically excluded from the survey. The problem of determining those numbers, the report notes, is that, “Few firms’ staffing leaders have a solid handle on how many non-F/T workers are employed by their firm at any given time … let alone how they got there.”

However, the respondents did provide estimates. The weighted average comes to 14.6 percent of the respondents’ total workforce.

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.