Our clients have been struggling with costs over the course of this recession. Most companies retrenched in one way or another by reducing hiring, trimming staff and cutting expenses. Some kept to the same course, but tightened up recruiting processes, using the hiring lull to install more efficient technology and adjust departmental structures. But a small group, consisting of stronger, more aggressive companies, actually increased spending. They saw in the downturn opportunities to lure talent from competitors and upgrade their workforces.
With so many changes underway, meaningful cost comparisons between company expenses and industry benchmarks have become increasingly elusive. This is especially the case for those companies not demonstrating a strong legacy of internal measurement.
2010 Corporate Recruiting Report
To put data from the current recession in perspective for our 2010 Corporate Recruiting Report, we reviewed our records going back to the year 2000 to see what relationships we could establish, and to gain perspective on a decade that has been marked by two economic slumps bookending an interim period of confidence and growth. The question we sought to answer was: What has really happened to recruiting costs?
The data for most of the 27 industries we followed shows a trend from lows during the recessionary period of 2000-2001, through steady rises during the recovery period of 2002-2007, then a sharp retreat over the past two years back to the lows of 2000-2001. In fact, today’s cost benchmark for all industries is within one-tenth of one percent of the low we saw 10 years ago. So from a recruiting cost standpoint, we are back almost exactly where we began.
This raises a number of issues, among them, What should our costs be today? Also, What should our costs become as the economy recovers? We address these at length in the report. Our summary conclusion is that, increasingly, benchmarks must be carefully adjusted to make substantive sense for an individual enterprise; and secondly, any comparative budgets must be carefully tailored to individual circumstances.
Not only are the differences from industry to industry significant, but there are equally important differences related to company size, number of hires, talent scarcity and other factors. We found that even geography can influence results by as much as 10%. There is simply too much variation in the numbers produced by otherwise perfectly rational staffing strategies.
The lesson of this review is that the days of easy cost comparisons have departed. The world of staffing has fragmented. There are now too many variations linked to process, technology, marketing, structure, brand strength, quality, time and strategy to make the old trusted linkages to industry benchmarks as meaningful as they once were. Although there definitely are “right” cost answers for every company, these are highly situational and require analyzing many variables, starting with a company’s basic people strategy. Bottom line, Does Company X really want an exceptional workforce or not?
This year’s Corporate Recruiting Report, the successor to our ten previous Recruiting Metrics and Performance Benchmark reports, sheds light on how a recession affects recruiting costs. The report is currently being offered at a special pre-publication price for a limited time. You can order your copy today for $100 off the regular price.
Related Reading
Focus on Process to Reduce Your Recruiting Costs
Corporate Recruiting: Action Steps During a Recession |
