Bersin & Associates’ New Research Finds U.K. Talent Acquisition Spending Rose Six Percent in 2011

Bersin & Associates’ New Research Finds U.K. Talent Acquisition Spending Rose Six Percent in 2011

Research Shows U.K. Companies Spend Twice as Much per Hire as Their
US Counterparts

Bersin & Associates, the premier research and consulting firm empowering Human Resource (HR) organisations to drive bottom-line impact, today announced its first-ever “U.K. Talent Acquisition Factbook®”  a study that shows spending by U.K. companies on talent acquisition rose 6 percent in 2011, primarily driven by expectations for business growth. This new Factbook is part of Bersin & Associates’ series of Factbooks that helps member organisations improve performance and efficiency by benchmarking their spending, staffing and resource allocations against peers and best practices.

The study, U.K. Talent Acquisition Factbook® 2011: Benchmarks and
Trends in Spending, Staffing, and Key Recruiting Metrics, contains
responses from nearly 100 organisations and was conducted via
qualitative interviews and online surveys of organisations from the
Bersin & Associates database and the LinkedIn network. The study found
through qualitative interviews that many U.K. companies are increasing
their hiring and talent acquisition spending to support international
growth.

“Our research indicates that forward-thinking companies are shoring up
their talent acquisition investments so that when things do start to
take off, those organisations will have the right infrastructure in
place to facilitate hiring,” said Josh Bersin, chief executive officer
and president, Bersin & Associates. “As firms adapt to today’s job
market, they are funding initiatives to reduce cost, improve the
quality of their hires, and enhance recruiter productivity.”

The study found that current U.K. talent acquisition cost stands at
£5,311 per hire. Cost per hire is a key metric of talent acquisition
spending since this measure indicates hiring efficiency and
productivity. While spending on talent acquisition also rose 6 percent
in the U.S., companies there spend $3,479 per hire, or the equivalent
of £2,226. Much of the difference in cost is due to the U.K.’s heavy
reliance on agencies, which are very expensive – charging as much as
20 percent to 30 percent of a new hire’s salary in the first year.

 “U.K. companies tend to use agencies to source broad ranges of
candidate populations, whereas U.S. companies use agencies more
selectively for senior-level and hard-to-fill positions,” said Bersin.
“To bring costs down, U.K. companies are starting to diversify their
sourcing strategies to embrace new social media tools, professional
networks, and candidate relationship management (CRM) systems as
sourcing alternatives.”

Over the past year alone, one-half of all U.K. companies said they
reduced their spending on agencies, the research showed. These include
a large retailer that has completely changed its recruiting processes,
renegotiated its agency contracts, and embraced new social media
tools, reducing their cost per hire 70 percent to £1700. Other
progressive companies are following a similar path.

In addition, the study found that:
In general, U.K. companies have yet to fully invest in a broad range
of recruiting practices and tools to find quality hires efficiently.
Agencies still account for 35 percent of all positions in the U.K. By
comparison, agencies account for just eight percent of positions in
the U.S., where companies source candidates from a variety of
lower-cost tools, including the company web site, job boards, employee
referrals, professional networks and social media.

Job boards are not dead, but dying. While job boards don’t enjoy the
same popularity as in the U.S., they still are used to fill nine
percent of open positions in the U.K. Job boards have been most
successful in attracting “active” candidates – those looking for jobs.
However, as the global war for talent heats up, progressive
organisations are reducing their spending on job boards in favor of
new tools that source both active and “passive” candidates – those not
actively seeking jobs.

Most firms are trying to evaluate new-hire quality by measuring
metrics such as new-hire turnover, new-hire performance, and the
satisfaction of both the candidate and the manager. The most prevalent
means of measuring quality is through a 90-day new-hire assessment,
used by nearly one-half of all U.K. companies. Firms with advanced
recruiting practices continually measure new-hire quality and use that
information to fine-tune the recruiting process.

As U.K. companies diversify their sourcing strategies, in-house talent
acquisition staff will play a broader role. U.K. companies already
have added staff to their recruiting teams, with headcount up 14
percent in 2011 over the previous year. Today, these staff members
manage agency contracts, oversee agency staff, track key metrics and
conduct some tactical recruiting.

 “Going forward, firms will need to build out their recruiting
processes, acquire new tools and develop internal recruiters to source
and recruit talent more strategically,” said Karen O’Leonard,
principal analyst, Bersin & Associates and author of  the report. “In
this new role, recruiters will act as true consultants to hiring
managers. They will need to understand trends in the labour market,
use various sourcing tools to build talent pipelines, and be versed in
engaging and converting high-quality candidates. This will be a
significant transition for U.K. recruiting teams – one that will take
considerable time.”

CH2M Hill, a full-service engineering and construction firm, switched
more than 50 percent of its recruitment advertising budget from job
boards to professional networks such as LinkedIn and Viadeo, and to
general social media tools including Twitter, Facebook and blogs, to
secure higher-quality candidates.

Recognizing the costs of external recruiting and the difficulty of
finding qualified candidates, recruiting teams increasingly are
finding qualified candidates within their own firms. These employees
may move laterally to another unit, function or job role; or they
could be promoted. For example, a global financial services provider
is staging its first-ever internal career fair in London.  The
one-day, employee-only event aims to make employees keenly aware of
opportunities outside of their individual departments, while keeping
them within the corporate “family.”

“Our research found that about at least one in every five U.K. and
U.S. open job requisitions is filled by an internal candidate,” said
O’Leonard. “Today, retaining top talent is difficult and will grow
even more difficult when there is a broad economic turnaround. In
anticipation, progressive companies are creating and promoting
internal mobility programs – not only to fill vacancies, but also to
bolster employee engagement and trigger an influx of new ideas.”

To download a complimentary copy of the Executive Summary of U.K.
Talent Acquisition Factbook® 2011: Benchmarks and Trends of Spending,
Staffing and Key Talent Metrics go to
http://marketing.bersin.com/talent-acquisition-factbook-UK.html

The full report is available today: £635 ($995) for a PDF and £735
($1,145) for a print copy. For details, to go: U.K. Talent Acquisition
Factbook® 2011 The full report also is available with The Talent
Acquisition Factbook® 2011 focusing on the U.S. market for $1,750
(£1,120) for a PDF and $1,900 (£1,215) for a hard copy. For more
details, go to: US-UK Talent Acquisition Factbook® 2011 – Bundle
Talent acquisition research members can download a complimentary copy
of either report and also get access to Bersin & Associates’
benchmarking of their talent acquisition organization.