Bersin by Deloitte: U.S. Spending on Recruitment Rises, Driven by Increased Competition for Critical Talent

Dramatic shift in recruitment spending to professional networks from agencies, accelerates

Apr 23, 2015, 08:29 ET from Bersin by Deloitte

OAKLAND, Calif., April 23, 2015 /PRNewswire/ -- Driven by increased competition for talent and a shortage of critical skills, U.S. companies increased their talent acquisition spending 7 percent on average in 2014 from 2013, according to new research from Bersin by Deloitte. That increase was in part due to an increase to nearly $4,000 in cost per hire in 2014.

Summarized in a complimentary WhatWorks® Brief, the research also found that more of that spending focused on professional networks at the expense of agencies. The findings appear in "Talent Acquisition Factbook 2015: Benchmarks and Trends in Spending, Staffing, and Key Recruiting Metrics." Professional networking sites saw allocation triple to claim 12 percent of recruiting budgets on average in 2014 from 2011, when only 4 percent of budgets were allocated to this source. By contrast, agencies have seen a hit. Agencies and third-party recruiters claimed just 18 percent of the recruiting budget in 2014, down from 38 percent in 2011, as organizations switched their investments to a variety of less costly channels, including professional networks. The study includes responses from 412 organizations, and was conducted via online surveys.

"At a cost of nearly $4,000 on average to fill an open position, U.S. companies are spending nearly three times the amount spent on training per employee," said Karen O'Leonard, vice president, Benchmarking & Analytics Research, Bersin by Deloitte, Deloitte Consulting LLP. "As the economy continues to rebound and the job market becomes more transparent than ever, organizations recognize that spending money strategically on recruitment, employment branding, sourcing and the entire candidate experience is critically important."

Despite the increased spending on professional networks, the research shows that company websites drive more hires than other sources, followed by job boards, and internal candidates. The research found that today, 10 percent of open positions are filled using professional networking sites – the same percentage as in 2011. 

"Job candidates now routinely use company websites to assess a firm's strengths and help determine whether they would be a good fit with an organization before even applying for a job," said Robin Erickson, vice president, Talent Acquisition Research, Bersin by Deloitte, Deloitte Consulting LLP. "This suggests that while candidates may learn about a company or a particular job opening through networking sites or social media, they typically apply for jobs via company websites. These factors make employment branding and ease of website navigation critical aspects of ensuring an excellent candidate experience during the application process."

In addition, the study found that:

  • As the economy got back on track and organizations began to rebuild their workforces, employees realized they had more employment choices. This created a competition for talent that has resulted in longer timeframes to fill vacant positions. Overall, companies are finding it takes 52 days on average to fill open positions – up from 48 days in 2011.
  • Health care organizations had the largest increase in spending among industries at 16 percent. This may reflect a federally-reported increase in job openings in this sector during the year.1 Health care also saw the largest new-hire turnover at 17 percent compared with 10 percent turnover among manufacturing firms.
  • The most mature recruiting organizations – those considered strategic enablers of the business and where talent acquisition leaders have an active and influential "seat at the table," spend $6,465 per employee, on average, as compared with only $3,258 among those organizations at the lowest level of maturity with reactive, tactical recruiting. But the investment is worth it. High-impact organizations have 40 percent lower new-hire turnover and are able to fill vacancies 20 percent faster than companies with tactical recruiting functions.

To learn more, register to join Robin Erickson, Jennifer Krider and guest Mike Walsh, senior product marketing manager, Glassdoor for an online webinar, "Benchmarking Talent Acquisition: The shift to candidate-driven recruiting," June 9, 2 p.m. EDT/19:00 BST.

Those interested in learning more about Bersin by Deloitte or its WhatWorks® membership may email info@bersin.com or call +1 510 251 4400.

About Bersin by Deloitte
Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies. For more information, please visit http://www.deloitte.com/bersin or http://www.bersin.com.

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see http://www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.


1 Bureau of Labor Statistics: U.S. Dept. of Labor. (2015). BLS News Release: Job Openings and Labor Turnover- February 2015, www.bls.gov/news.release/pdf/jolts.pdf

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