2006 DirectEmployers Association
Recruiting Trends Survey
Washington, D.C.
February, 2006
2006 Recruiting Trends Survey Summary
Summary | Intro/Method | Results | Appendix
This report highlights results from a survey of seventy-three leading
employers
Responses indicate:
Over 50% of New Hires were sourced from the Internet in 2005
Employment Web Sites, Referrals, and General Job Boards (e.g., CareerBuilder)
were the most fruitful sources for new hires in 2005
Employers spent the largest proportion of their recruitment budgets on General Job
Boards in 2005
The greatest volume of applicants in 2005 came from Employee Referrals,
Employment Web Sites, General Job Boards, and Campus Recruiting events
Employers were most happy with their Return on Investment from (in order of
satisfaction) Employee Referrals, their own Employment Web Sites, Campus
Recruiting, and Niche Job Boards
Our Source Value Index suggests that employers received the most value from
their budgetary investments in Referrals, Social Networking Web Sites, and their
own Employment Web Sites (Value Index = % Hires/% Budget allocation)
2006 will present new challenges and opportunities as the regulatory
environment around online recruiting changes
Many employers suggested that the new OFCCP definition of an “Internet
Applicant” has caused and will continue to affect significant changes in
organizational practices
Employers expect to drive more applicant traffic through the web in 2006 – which
would be a valid means for effective compliance within the changing regulatory
environment
Sources of Hires
1.Employment Web Site – 21%
2.Referrals – 19%
3.General Job Boards – 15%
4.Search Firms – 10%
5.Campus Recruiting - 8%
6.“Other” – 6%
7.Niche Job Boards – 6%
8.Social Network Web Sites – 5%
Source Value Index
Ranks
1.Referrals
2.Social Networking Web Sites
3.Employment Web Site
4.Campus Recruiting
5.Niche Job Boards
6.Commercial Resume Databases
7.General Job Boards
8.Newspapers
9.Job Fairs
2
Context for the 2006 Recruiting Trends Survey
Summary | Intro/Method | Results | Appendix
It is clear that hiring activity on the Internet has dramatically increased
in recent years, yet very little data exists providing meaningful
benchmarks from which to gauge the state of hiring practices,
particularly on the Internet
Recent events with regard to Federal Regulations around defining “Internet
Applicants” is changing the way companies think about using the Internet to direct
applications and find passive job seekers
New web technologies and behavior, such as social networking web sites, are
beginning to have an impact on employer sourcing efforts
This study sought to bridge the gap between practice and awareness
by collecting data on hiring practices from leading employers
Seventy-three recruiters from leading employers answered questions to our survey
evaluating the impact and trends in usage around eleven recruiting sources
The survey was completed, via the Internet, between January 18th and
February 3rd, 2006
3
Methodology and Description of the Sample
Summary | Intro/Method | Results | Appendix
A total of 76 items, clustered around six primary areas, were created based
on a prior survey of Recruiting Trends (Cober & Brown, 2004
DirectEmployers Survey) and current perspectives regarding the state of
the Recruiting Industry
Invitations to participate in the 2006 Recruiting Trends Research Project
were sent to Recruiting Practitioners from 270 employers
Survey was open from January 18th - February 3rd
27% total response rate
84% of respondents were from DirectEmployers Member Organizations
Profile of Employers in this Study:
Size of Firm
Total 2005
Applicants
< 5000 = 26%
Mean = 139,000
5001 – 25,000 = 34%
Low = 200
25,001 – 50,000 = 16% High = 1,000,000
> 50,000 = 23%
2005 Recruiting
Budget
< $50,000 = 6%
$50K - $100K = 8%
$100K - $500K = 30%
$500K - $1M = 14%
> $1M = 43%
Hiring Freeze in
2005
23% Reported a hiring
freeze at some point in
2005
2006 Recruiting
Trend
Decrease = 4%
Stay the Same = 36%
Increase = 60%
% Recruiting
Exempt Workers
Recruiting = 62%
Exempt Employees
4
Recruitment Snapshot
Summary | Intro/Method | Results | Appendix
The relative quality of applicants in the talent marketplace seems to be
on the rise and innovations in recruiting technology are facilitating
employer ability to cast a wider net
Fifty-eight percent of respondents felt that the quality of hires in 2005 had
improved relative to previous years
Fifty-six percent of respondents agreed that recruiting technology had made
the job of recruiting easier
As the competition for talent has increased, some employers are not
providing the resources to effectively source and recruit
Forty-three percent of respondents felt that their organization provided
insufficient funding to meet recruitment goals in the coming year
Perceptions of inadequate recruitment funding was particularly pronounced
among respondents from the largest organizations
5
Perceived Value of Recruitment Sources by Applicant Yield
Summary | Intro/Method | Results | Appendix
In 2005, employee referrals, general job boards, and Employer Web Sites
generated above average numbers of applicants
Very few employers attributed significant applicant flow to Newspapers
Rate each of the following sources with regard to the volume of
applicants (i.e. QUANTITY) that your organization received in 2005
% Above Average
75%
65%
50%
50%
42%
50%
34%
18%
25%
24%
16%
13%
8%
6%
th
er
O
C
ar
ee
rf
ai
rs
re
cr
ui
tin
g
C
am
pu
s
fir
m
s
Se
ar
ch
re
fe
rra
pl
oy
ee
Em
N
ew
sp
ap
er
s
ls
s
da
ta
ba
se
om
m
er
ci
al
r
ki
ng
C
ne
tw
or
N
es
um
e
te
ch
no
lo
gy
bo
ar
ds
jo
b
ob
en
er
al
j
G
ic
he
So
ci
al
O
rg
an
iz
at
io
n'
s
W
eb
bo
ar
ds
Si
te
0%
Applicant Source
6
Percent New Hires by Source
Summary | Intro/Method | Results | Appendix
Employer Web Sites were the single best source of new hires in 2005, followed
closely by employee referrals
Fifty-one percent of New Hires were sourced from the Internet
In 2005, approximately what percentage of your NEW HIRES
originated from the following sources
50%
Percent
38%
19%
21%
25%
15%
10%
6%
13%
5%
4%
5%
6%
8%
3%
th
er
or
k
O
C
in
om
g
te
m
er
ch
ci
no
al
lo
re
gy
su
m
e
da
ta
ba
se
s
N
ew
sp
ap
Em
er
s
pl
oy
ee
re
fe
rra
ls
Se
ar
ch
fir
C
m
am
s
pu
s
re
cr
ui
tin
g
C
ar
ee
rf
ai
rs
bo
ar
ds
jo
b
ic
he
N
ne
tw
G
en
er
al
j
ob
So
ci
al
O
rg
an
iz
at
io
n'
s
W
eb
bo
ar
ds
Si
te
0%
Applicant Source
7
Perceived Quality of Applicants by Source
Summary | Intro/Method | Results | Appendix
Employee Referrals, Employer Web Sites, and Search Firms were rated as
generating the highest quality of new hires
Newspapers and Career Fairs received relatively negative ratings with regard
to applicant quality
Rate each of the following sources with regard to the QUALITY of
applicants that your organization received in 2005
% Above Average
100%
88%
75%
54%
51%
40%
50%
18%
25%
43%
31%
13%
11%
5%
13%
er
ar
e
C
cr
re
s
C
am
pu
O
th
er
rs
fa
i
ng
ui
ti
m
f ir
h
ar
c
Se
ee
pl
oy
Em
s
ls
re
fe
rra
ap
e
sp
ew
ci
al
r
es
N
e
um
ki
ne
tw
or
C
om
m
er
ia
l
So
c
se
s
da
ta
ba
te
c
ng
e
ich
N
rs
y
lo
g
bo
jo
b
jo
b
er
al
G
en
hn
o
ar
ar
bo
W
eb
at
io
n'
s
an
iz
O
rg
ds
ds
Si
te
0%
Applicant Source
8
Distribution of Recruitment Advertising Budget
Summary | Intro/Method | Results | Appendix
General job boards accounted for the largest percentage of an organization’s
advertising/attraction budget
Approximately what percentage of your recruitment advertising/attraction
budget is devoted toward utilizing the following sources
50%
Percent
38%
27%
15%
25%
8%
13%
7%
9%
11%
10%
3%
7%
4%
th
er
O
ar
ee
rf
ai
rs
C
in
C
g
om
te
m
ch
er
no
ci
lo
al
gy
re
su
m
e
da
ta
ba
se
s
N
ew
sp
ap
er
Em
s
pl
oy
ee
re
fe
rra
C
ls
am
pu
s
re
cr
ui
tin
g
bo
ar
ds
jo
b
N
ne
tw
or
k
ob
en
er
al
j
G
ic
he
So
ci
al
O
rg
an
iz
at
io
n'
s
W
eb
bo
ar
ds
Si
te
0%
Applicant Source
9
Satisfaction with Recruiting Source ROI
Summary | Intro/Method | Results | Appendix
Respondents were most satisfied with the Return on Investment provided by
Employee Referrals and their own Employment Web Sites
Niche Job Boards were perceived more positively than General Job Boards
with regard to ROI
What is your organization's level of satisfaction with the Return on
Investment it gets from the following sources of applicants
% Satisfied
100%
82%
71%
75%
58%
51%
60%
50%
42%
33%
36%
30%
28%
15%
25%
O
th
er
rs
fa
i
er
ar
e
C
re
s
am
pu
C
Se
ar
ch
f ir
cr
ui
ti
m
ng
s
ls
re
fe
rra
Em
pl
oy
ee
ew
N
e
um
al
re
s
sp
ap
e
se
s
da
ta
ba
te
c
ng
C
om
m
er
ci
ne
tw
or
ki
So
c
ia
l
N
rs
y
lo
g
bo
ich
e
jo
b
jo
b
er
al
G
en
hn
o
ar
ar
bo
W
eb
at
io
n'
s
an
iz
O
rg
ds
ds
Si
te
0%
Applicant Source
10
The Source Value Index
The Source Value Index provides an
indicator of the value of a source from
an investment perspective
Source Value
Index
% New Hires From Source
=
% Recruitment Budget Allocation
For the most part, participant
satisfaction with ROI reflects Source
Value Index scores and rankings
Source Value Index for Social
Networking Web Sites was relatively
higher than ranking with regard to
perceived ROI
General Job Boards were perceived
more positively by respondents than the
Source Value Index would suggest
Source Value Index Ranking
Source
Value Index
1. Referrals
1.72
2. Social Networking Web
Sites
1.46
3. Employment Web Site
1.41
4. Campus Recruiting
.76
5. Niche Job Boards
.71
6. Commercial Resume
Database
.58
7. General Job Boards
.50
8. Newspapers
.50
9. Job Fairs
.47
11
2006 Recruiting Projection
Summary | Intro/Method | Results | Appendix
Most respondents anticipate their organization relying more heavily on their
own Web Site and Employee Referrals as a source of applicants in 2006
Responses indicate significant movement toward increased use of technology to
facilitate the hiring process
This trend represents one effective means for responding to and complying with new
regulations released by the OFCCP
Think of your recruiting outlook for 2006. Please indicate the extent to which you
anticipate your organization's use of the following sources of applicants will increase or
decrease.
% to Increase
100%
74%
75%
68%
60%
51%
50%
48%
29%
24%
25%
21%
16%
4%
12%
s
pu
O
th
er
rs
rf
ai
ar
ee
C
am
C
ar
c
re
c
h
f ir
ru
iti
ng
m
s
ls
Se
re
fe
rra
Em
pl
oy
ee
ew
sp
ap
e
se
s
er
ci
al
r
es
N
da
ta
ba
um
e
g
ki
n
rs
y
lo
g
bo
om
m
C
So
cia
l
ne
tw
or
N
ich
e
jo
b
ob
lj
er
a
te
ch
no
ar
bo
W
eb
G
en
at
io
n'
s
an
iz
O
rg
ar
ds
ds
Si
te
0%
Applicant Source
12
Appendix A: Excerpts from Participant Comments
Summary | Intro/Method | Results | Appendix
Category
Comments*
Online Challenges
Significant increase in the cost to post on name brand sites
I think that we need to leverage better and increase our effectiveness of our own website
We see the internet as a double edged sword. It is a valuable tool that is all too often misused or used
as a proxy to truly building a relationship and dialogue with candidates
Regulatory Environment
The OFCCP's new definition of an internet applicant will create new challenges in record keeping
We have just implemented a new applicant tracking system due to OFCCP requirements. We do
have concerns on our candidate flow may suffer
More burden associated with use of Resume mining and the new ruling from OFCCP
The new OFCCP guidelines have been a challenge for us this year. It is difficult to compete in a
challenging labor market while meeting the documentation standards that are dictated in the newest
guidelines
Sourcing Applicants
Attracting passive candidates continues to be a challenge. Job boards are becoming the newspapers
of 20 years ago. Challenge to find quality
The lack of talent, and the lack of use of job boards by the internet talent pool we are seeking
Screening Applicants
Job boards / sourcing & referral tools need to focus on providing employers effective and efficient
screening/pre-qualification features/functionality. The volume of applications/job seeker inquiries is an
area that needs to be addressed
Building Recruiter Talent
Internet has become a crutch for too many of my recruiters - relying too heavily on merely posting and
getting away from the basics of networking and cold calling
Using Technology
Opportunities would be to increase our own website's technical capabilities as well as stronger
recruitment marketing to specific segment areas
Need for a better applicant tracking system
* Comments provided on this slide represent verbatim excerpts of comments provided by survey respondents
13
Appendix B: About the Authors
Summary | Intro/Method | Results | Appendix
Rich Cober, Ph.D., SPHR
Associate, Booz Allen Hamilton
Ph: 703.984.0134
Email: [email protected]
Doug Brown, Ph.D.
Ph: 519.880.0695
14