As labor markets tigthen up, job search engines like
Monster.com et al. are reaping some of the benefits.
"Our business is very robust and healthy as our fourth quarter
numbers indicate, both from a revenue and profit point of view,"
says Steve Pogorzelski, president of Monster.com/North
America.
But for how much longer? A new survey from recruiting-strategy
consultants CareerXroads (Kendall Park, N.J.) reveals new
opportunities for PR firms, as more and more big companies look to
employee referrals to fill outside hires. In 2004, employee
referrals increased to 31.7%, compared with 28.5% in 2003 and 23.3%
in 2001 (see charts).
CareerXroads founder Mark Mehler believes more companies will
employ outside PR firms to set up employee-referral programs.
"Traditionally, companies looked to outside- recruitment
advertising agencies to help with this," Mehler says. "Then, from
the late 1990s onwards, some big companies employed a marketing
person reporting to human resources with this function as well as
reaching out to PR firms to create an employee referral
program."
Mehler sees this trend continuing. "Is there future business
here for public-relations firms to create employee referral
programs for corporations? Absolutely," he says.
Forty of the largest U.S. organizations -- responsible for some
2.7 million U.S. employees and 4.1 million worldwide -- responded
to the survey, which also found that hiring was up 10% compared
with last year and 38.4% of positions were filled by internal
candidates.
One reason why companies are relying more on employee referrals,
says Mehler, is that they get swamped with resumes when they
advertise online.
Monster's Pogorzelski chalks this up to a better outlook on the
job front. "Today's labor report shows that the four-week moving
average of jobless claims dipped to its lowest level since October
2000," he says. "There's no doubt employee-referral programs have
always been an extremely effective way to grow a company's employee
base.
Talented people will often seek out other talented people. In a
tightening labor market, customers are going to have to resort to
multiple strategies to hire people."
As the economy continues to improve and the labor market
continues to perk up it will become increasingly difficult for
companies to find appropriate talent. "And companies should take
advantage of the current available talent pool," Pogorzelski
says.
Contact: Mark Mehler, 732.821.6652, [email protected]
Table shows the relationship of internal to external hires based
on figures from 39 firms that could differentiate both internal and
external hires. The relationship has been similar the last two
years.
| Internal vs. External Positions Filled |
|||
|---|---|---|---|
| Positions Filled | 2004 | 2003 | 2006 |
| Internal |
38.4%
|
35.5%
|
34.2%
|
| External |
61.6%
|
64.5%
|
65.8%
|
| Total |
100%
|
100%
|
100%
|
Internal movement ranged from less than 10% to 70% but, nearly
half (17 out of the 39 who reported on this statistic) already fill
more than 40% of their openings with their internal candidates.
| Sources of Hire - Traditional vs. Internet |
|||
|---|---|---|---|
| Sources | 2004 (%) | 2003 (%) | 2002 (%) |
| Employee Referrals |
31.7
|
28.5
|
26.6
|
| Internet |
29.6
|
31.8
|
27.0
|
| Direct Sourcing |
6.0
|
2.6
|
N/A
|
| College |
5.6
|
2.4
|
N/A
|
| Newspapers |
5.5
|
3.8
|
4.8
|
| Career Fairs |
3.2
|
2.8
|
3.2
|
| Agency |
3.2
|
1.2
|
N/A
|
| All Other |
15.2
|
26.9
|
38.4
|
| TOTAL |
100
|
100
|
100
|
| Internet sources as a % of the all Internet hires |
||||
|---|---|---|---|---|
| Sources | 2004 % of Internet | 2003 % of Internet | 2002 % of Internet | 2001 % of Internet |
| Company Web Site |
53.3
|
67.9
|
57.7
|
62.0
|
| All other Sites |
16.9
|
17.6
|
20.8
|
24.0
|
| Monster.com |
8.6
|
8.7
|
14.0
|
9.0
|
| CareerBuilder |
8.1
|
4.1
|
5.6
|
2.5
|
| HotJobs.com |
6.1
|
1.8
|
1.9
|
2.5
|
| TOTAL |
100
|
100
|
100
|
100
|
Source for all charts: CareerXroads