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UK Companies are paying an average of £5,311 to recruit new staff – up 6% from 2010 costs

A recent survey by Bersin & Associates found that the average cost in 2011 to recruit new employees is £5,311 per person – an increase of 6% on the 2010 figure. They also found that whilst spending in the US has increased by the same percentage, US employers are paying only £2,226 per hire – less than half the equivalent UK cost.

Much of the difference in cost can be explained by the heavy reliance on recruitment agencies in the UK, often charging as much as 20% to 30% of a new recruit’s salary in the first year.

Recruitment agencies account for as much as 35% of all positions in the UK compared with just 8% of positions in the US. One reason for this disparity is that in the UK many companies have yet to fully invest in a broad range of recruiting practices and tools to find quality hires efficiently whereas US companies tend to source candidates using a variety of lower-cost tools, including the company web site, job boards, employee referrals, professional networks and social media.

Over the past year, 50% of the UK companies interviewed for the study said they had reduced their spending on agencies. 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 by 70% to £1,700. Other progressive companies are following a similar path.

Job boards are not dead, but dying. Whilst job boards are not as popular as they are in the US they are still used to fill 9% of open positions in the U.K. Job boards have been most successful in attracting ‘active’ candidates – those looking for jobs.

But as the global war for talent heats up, progressive organisations are reducing their spending on job boards in favour of new tools that source both active and ‘passive’ candidates – those not actively seeking jobs.

Most organisations are trying to evaluate the quality of new recruits with metrics such as new-recruit turnover, new-recruit performance, and by measuring the satisfaction of both the candidate and the manager. The most prevalent means of measuring quality is through a 90-day new-recruit assessment, used by nearly 50% of the UK companies surveyed.

Companies with advanced recruitment practices continually measure new-recruit quality and use that information to fine-tune the recruitment process.

The move away from using external recruitment agencies has led to a rise in the number of in-house recruitment staff with headcount up by 14% in 2011 over the previous year.

Josh Bersin, Chief Executive Officer and President of Bersin & Associates, said:

“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.”

“UK 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”

“To bring costs down, UK 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.”

Professional networks such as LinkedIn and Viadeo, and social media tools including Twitter, Facebook and blogs are increasingly being used to reduce recruitment costs and  identify higher-quality candidates.

Find out how you can drastically reduce your recruitment costs AND increase the quality of your candidates with the FREE Zynap Recruitment Audit – Call 0845 689 0769 or e-mail audit@zynap.com today to book an appointment.

 

 

 

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