Recruitment Insight: Current & emerging trends in People Resourcing

Posted by admin, July-2-2010

There is convergence of recruitment and social networking which sites such as mypeoplebiz.com are helping to drive, and having recently looked at and identified some of the issues, trends and emerging thinking in the recruitment industry, I thought I would share some of the findings with readers.
The use of social networks to drive recruitment is on the rise

Research conducted through various recruitment surveys over the past year indicates that up to 78% of companies are now using social networking and social media to find and attract candidates. Recent surveys of recruiters & HR executives found that over 50% of companies were spending more on business networking sites such as LinkedIn, Facebook, and employee-referral programs and less on print and traditional job boards.

And this is not a new phenomenon. T-Mobile piloted a social networking dimension for their graduate recruitment round, as far back 2007, via Facebook. The experiment was a success, with the company’s Recruitment Manager acknowledging that they ‘didn’t think it would take off in the way it did’, and that ‘[social networking] has an important and growing role to play’.

However, it still appears that whilst employers are seeing an increasing percentage of hires initiated through their employees’ social networks, over 50% of companies surveyed by the CIPD admitted that so far they had not utilised an employee referral scheme at all.

Candidates are open to the idea of social networking as a recruitment tool

Importantly, it’s not just employers who are keen to jump on the ‘networking bandwagon’ to revolutionise recruitment. Increasingly, both active job seekers and passive candidates are willing to publish career-based information about themselves on social networking sites, with a view to potential employment opportunities, either from friends or from head-hunters. A recent survey of computer users indicated that 87% of respondents think social networking sites are useful for business purposes including networking, exchanging ideas, getting advice, recruitment, research and selling.

Is the war for talent still relevant in today’s market?

Although the economy has recently presented challenges for most employers, the “jobseekers’ market” is thriving and the war for talent continues to challenge recruitment initiatives. Employers are still struggling to attract candidates with the necessary industry experience and expertise, and the CIPD survey suggests that the problem had, if anything, worsened, with 86% of companies across a number of industries admitting to experiencing recruitment difficulties.

Whilst formal recruitment costs are, in some cases, falling due to the current economic downturn, this tends to be offset by the increase in recruitment spending on temporary and contract workers, filling gaps for which permanent staff are no longer being hired or are deemed inappropriate because of headcount restrictions. If anything, then, the current economic climate indicates that there is an even more urgent need to identify economical ways to win the talent war, whilst simultaneously keeping recruitment costs down to a minimum.

It pays to know people

Incentives such as employee referral schemes can make a huge impact Personal recommendations via current employees’ social networks can be very valuable, as they can efficiently lead to candidates with the right cultural ‘fit’ for a company. In addition, such schemes can save employers considerable amounts of money, reducing the amount spent on agencies and external advertising.

CIPD surveys indicate that 64% of respondents agreed that referral reward incentives for staff have a positive impact – not just on the calibre of job applicants, but on the budget too. A large insurance company which participated in the study’s focus group reported a huge saving of £250,000 in recruitment costs as a result of their ‘refer a friend’ scheme.

Clearly, such schemes can be highly successful.

Golden Hellos can provide the ideal incentive in today’s talent war

As far back as 2008, the CIPD survey, confirmed that 52% of companies thought that candidate incentives have a positive impact.

Attracting the best candidates is always a struggle, so incentives such as sign-on bonuses can ensure that a company stands out amongst the crowd, encouraging potential applicants.

However, these incentives do not appear to be widely offered

Whilst ‘golden hellos’ are becoming more frequent, just 14% of companies currently claim to offer such incentives. Similarly, as discussed previously, despite the evidence that employee referral schemes are beneficial for all concerned many employers are not taking advantage of these either; over 50% of companies surveyed by the CIPD say that they don’t utilise an employee referral scheme at all, and only 37% offer ‘bounty payments’ for these referrals.

Failure to utilise such schemes means missing out on numerous opportunities to attract top talent on a tight budget.

Successful talent acquisition relies on speeding up the recruitment process

A survey of 300 companies in the mobile wireless industry revealed that over 75% had missed out on recruiting high calibre candidates due to delays in the recruitment process. This resulted in an estimated revenue loss of £millions, due to projects that were delayed as a result of a lack of quality employees. The CIPD agrees that this is a common problem: “Good candidates have multiple offers and therefore have higher expectations. As a result organisations have to speed up the recruitment process so as not to lose these candidates.”

Recruitment and Diversity

With regard to diversity, whilst this is a very topical issue, as the CIPD report puts it “nothing much has changed” in recent times and only 55% of respondents to their recent survey even possessed a diversity strategy at all. One of the issues with diversity is opening up the recruitment process to a wider market, and the recent trend to create PSLs and reduce the number of suppliers can have the effect of closing rather than increasing applications from “diverse” candidates. Social networking and referral schemes may help to increase applications from well qualified and suitable candidates from more diverse backgrounds, and as such could prove to be valuable tools for equal opportunities in the future.

In summary, the competitive market for talent shows no sign of abating. Keeping up with the current trends, understanding the needs and motivations of job seekers and ensuring ample incentives can lead to greater recruitment success.

Our experience with mypeoplebiz so far is that approximately 50% of the candidates are coming through recruitment agents, 30% are coming through referrals and networking and the remaining 20% are coming through job boards and direct.

As the CIPD succinctly concludes: “Organisations have to review their reward offering, to ensure they secure the best candidate for the job”.  To do that, as we have written before, it is advisable to have a multichannel recruitment strategy and to ensure that referrals and networking feature strongly in that strategy.