Source of Hire Survey: Employers Up Their Use of Outside Agencies

2012 Source of hire CareerXroadsWith 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% of the jobs they filled in 2012 through agencies is still a shadow of the 5.2% they filled that way in 2005, but it does represent an improvement from 2009. That year employers filled only 2.3% of jobs via external recruiters.

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

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

Referrals, of course, were responsible for the biggest percentage of external hires, accounting for 24.5% of the total. That’s the lowest percentage CareerXroads has reported since 2001. In 2011, the companies in the survey said 28% of their external hires were the result of referrals.

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

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.

The survey did ask companies to describe how they mostly used job boards. A majority — 60% — reported mostly just posting jobs; 8.6% said they mostly searched the resume databases; 5.6% 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%.

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% of the respondents’ total workforce.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. 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. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

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 here.

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