Last week the first Australian Source of Talent (SOT) report was released (see details in Ross Recommends below) and it contains a host of fascinating information.
I haven’t had an opportunity to fully digest its contents but I wanted to bring to your attention some initial highlights and make some comments in time for this week’s InSight. I expect I will write further about the report in coming weeks.
So here, for the time being, are six things for recruitment agencies to consider:
- Job boards are the most successful SOT, generating 29.6% of all hires
This is a huge red flashing light for recruitment agencies that rely upon job boards as their major SOT. How likely is it that your clients will do their own recruitment when they can use job boards just as easily as recruitment agencies (unless you write far better job ads than your clients)?
Social media ranks 17th (last) as a SOT, generating 0.33% of all hiresA big opportunity here for recruitment agencies to work out how to utilise social media channels for recruitment, before your clients do. Don’t wait a minute longer – you only have to look at what Deloitte are doing in this space to see how quickly clients can have an impact in this area.Referrals from employees make up 16.7% of SOT in the USA, compared to 7.6% in AustraliaProperly constructed and effectively run internal employee referral programs have been around longer in the USA, compared to Australia. Again, Deloitte have shown the way here in proving that the highest quality of hire comes from internal referrals, with recruitment agencies well down the list. Once other organisations cotton on to this (and the difference with the USA shows how much upside there is) and take action, recruitment agencies will be the big losers.In Australia, recruitment agencies are the source of 9.9% of hires (removing HR/Recruitment from the sample), compared to 1.7% in the USAThe USA figure for ‘hiring through agencies’ has dropped significantly every year (5.2% in 2005, 4.8% in 2006, 3.3% in 2007 and 2.7% in 2008) which has occurred in parallel to the greatest hiring bull market in history! Clearly strong recruitment agency profitability has distracted (blinded?) the sector from a huge drop in ‘hiring’ market share in the USA. Is Australia likely to be any different? I very much doubt it.Micro firms (1-20 employees) only made 0.4% of their hires through recruitment firmsSo much time and energy is spent chasing the corporate end of town by recruiters that their toddler cousins are mostly overlooked. Micro businesses are the fastest growing sector of the economy. They don’t have any internal recruitment capability and need an external advocate to sell their employer brand. They are unlikely to be inundated with approaches from rival recruiters and are genuinely in need of effective recruitment consulting advice. I hear opportunity knocking.Print media ranked as the 7th most effective SOT, at 4.7%Print advertising isn’t dead yet. For roles in certain sectors, (predominantly Oil/Gas/Mining and Retail/Consumer Goods) print still appears to work. The important question is; does print represent value , given how vastly more expensive most print advertising is compared to online advertising?The big unanswered question (for me at least) is … how effective is each source of talent when you consider both money and time invested?It’s a truism that if you throw enough mud, some of it will stick, so effectiveness is what I am most interested in.I will do some more digging through the SOT report as well as speak to the authors and report back what I discover.In the meantime, what are the important questions to ask yourself and your team about these findings of the Source of Talent 09 ?