Recruiting Firms Hot, Job Boards Not

Computer Economics research points to an interesting trend in recruiting this year: it appears that many companies may be losing interest in online job boards and going back to more traditional recruiting methods, such as the use of third-party recruiters. The data behind this trend was collected for our 2005/2006 Information Systems Spending & Technology Trends study published on July 1, 2005.

One of the annual staffing benchmarks produced in this study is the effectiveness of recruiting methods. The study identifies five key recruiting strategies that represent the channels most commonly used by IT organizations, including:

• Online Job Board
• Outplacement Service
• Print Ads
• Recruitment Firm
• Referrals/Networking

While our research indicates that many companies employ multiple recruiting strategies when searching for specific talent, IT executives do have their favorite methods. From year to year, the relative ranking of these five recruiting strategies has shown little change.

However, between 2003 and 2005, two recruiting strategies have undergone a substantial shift. In 2003, online job boards were considered the most effective recruiting strategy by nearly one-fifth of all companies, while this year that percentage dropped significantly. Conversely, in 2005, one-third of our respondents chose recruiting firms as the most effective recruiting strategy, while in 2003 a much smaller percentage of respondents felt this method was the best way to bring in new IT talent.

Mark McManus, Vice President of Technology Research, discussed our research findings with Katherine Lee Spencer, executive director of Robert Half Technology to confirm whether or not our survey data reflects a shift in recruiting trends from a real-world perspective. Ms. Spencer confirmed our observations and indicated that a tightening job market may be behind a shift in recruiting strategies. She went on to say, “During the period from 2000 through 2003, there was a flood of IT talent on the market, making it easier in some respects for hiring managers to select the right individual to fit their specific needs. In today’s market, that scenario is changing. We are beginning to experience a shortage of IT talent, and this is especially true in key areas such as security, development, and middle and senior management. This has made it critical for many companies to revert to a more traditional recruiting model which often includes partnering with a well-established recruiting firm to assist in the search for key personnel.”

The Computer Economics annual study also tracks recruiting costs from year to year. In 2005, recruiting costs per IT employee showed a notable increase over 2004. From the perspective of up-front, hard costs, recruiting firms are the most expensive recruiting channel. Thus, a significant rise in the use of recruiting firms would increase the recruiting cost per IT employee in terms of hard dollars.

However, there are other factors that are driving up recruiting costs, most notably the scarcity of technical talent. As the demand for technical talent increases so does the cost; translating into a rise in base salaries, bonuses, and other compensation incentives for IS personnel. Our research indicates that 2005 salaries for technology professionals are increasing from 2% to more than 5%. Additionally, even though companies are still not providing the large sign-on bonuses that were common during the dot.com boom, such bonuses as a hiring incentive are in use in 2005 much more than they have been in the past three years.

Information for this Research Byte was taken from our recent report on this subject, Online Job Boards, Losing Favor as an IT Recruiting Tool, which provides insights into recruiting trends and costs. Clients can view this report for free, and non-clients can purchase it online via credit card at following link: https://avasant.com/report/data-center-recovery-site-planning-geographic-considerations-2005/.