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CCH® HR MANAGEMENT - 03/03/10

Internal movement accounts for more than half of "new hires" in 2009, annual survey finds

Company employees remain the most likely source for filling open positions in 2009, according to CareerXroads' (CXR) 9th Annual Source of Hire (SOH) study. The study, which takes a look at how corporations fill their open positions in the U.S., was participated in by 41 firms with approximately 1.8 million U.S.-based employees and representing 176,420 positions. Of those positions, 51 percent were filled from internal movement and promotion. This is the highest average ever seen for the U.S. in the 9 years of survey data.

About one quarter of respondents filled 21-30 percent of all their openings through internal movement or promotion. At one extreme, 7.5 percent filled fewer than 1 in 10 openings. At the other extreme, another quarter of the respondents filled at least 50 percent of their openings via internal movement. This is a significant increase over 2008.The spike in internal movement is a strong artifact of the recession and suppressed many other SOH. Expect internal movement to fall to more normal levels in 2010.

External sources of hire. According to study results, 75 percent of all external hires are attributed to just five sources: Referrals, Job boards, Company Career Site, College, and Direct Sourcing. Referrals make up 26.7 percent of all external hires. This is arguably the number one external source. The yield for referrals is one hire for every 15 referrals, making this category the most efficient source by far. The growth of social media could change the dynamic of referrals and firms need to re-examine their efforts to stay ahead of the curve.

Social Media, while rapidly expanding as a strategy, is still in its early stages vis-à-vis attributed hires. Only about 500 hires can be attributed to Social Media. Direct Sourcing activities are increasingly adopting social media tools and tactics but 2009 also saw a decrease in "sourcers" (who are the most specialized at using social media to track prospects). This suggests that social media has not been leveraged as much as was intended. Corporate staffing is poised to expand social media initiatives rapidly in 2010 as the recession ends.

Hires attributed to job boards represent 13.2 percent of external hires. Monster and CareerBuilder account for more than half the job board hires but the category itself is under pressure from company plans to reduce costs and shift to other sources. And, according to the study, hires attributed to the company website are significant (22.3 percent).

2010 looks bright. Two years ago (January 2008) study authors asked respondents about their future plans and, for the first time, more firms predicted that they would make fewer hires in 2008 than 2007 (and they eventually confirmed that prediction by filling 22 percent fewer openings). 2009 was even grimmer. 100 percent predicted at the beginning of 2009 they would fill fewer openings...and they did... 27 percent fewer. This year only 10.8 percent predicted further reductions in hiring while 48 percent expect to grow and the remainder to hold steady. If realized, the predictions for 29 percent growth in 2010 would bring the recruiting function back to front and center.

Nearly all respondents described their 2010 plans in detail. Most mentions were to build or emphasize social media; build or rebuild sourcing teams; employ more SEO (search engine optimization)/SEM (search engine marketing) campaigns and initiatives; expand referrals; use more niche boards where necessary; and reduce overall use of job boards in general - major boards particularly. There were also frequent mentions of training (cold calling), branding and improvement of career sites.

Source: CareerXroads 9th Annual Source of Hire Study: Meltdown in 2009 and What It Means for a 2010 Recovery, February 2010.

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