Recruitment budgets are under pressure…

Recruitment budgets are coming under pressure, with 95% of employers having reviewed what they spend during the past 12 months and 74% cutting back, a survey by Personnel Today’s sister publication IRS Employment Review reveals.

The research found that employers are typically moving advertising online, using “preferred providers” among employment agencies, and even cutting the size of their job ads to save money. Others are now more likely to promote internally than recruit.

Reductions in recruitment spend are biting deepest in the public sector, where nearly nine out of 10 organisations surveyed have cut back. One local authority in the study said it now relied on “free” advertising through Jobcentre Plus and its own website.

But while nearly one in four (24%) of the 127 organisations taking part in the study forecast further cuts in the year ahead, almost as many (23%) expect to increase their spend Ð reflecting the difficulty of filling key posts.

However, nearly half (46%) have no formal budget for recruitment, leaving many to struggle in their attempts to manage the unknown.

…but the sums involved are still huge

Estimates of the total size of the recruitment market vary. But spending on online recruitment – one of the lowest cost options – is expected to reach more than £250m this year.

Just 81 of the organisations taking part in the IRS study provided data on their annual recruitment spend. But this alone amounted to more than £21m in 2005, with agencies taking the lion’s share.

The survey shows that employers are spending an average of £151,872 a year on agencies. When the spend is broken down by number of employees (not number of recruits), small and medium-sized employers spend most.

Smaller organisations are also likely to spend a larger proportion of their recruitment budget on using agencies.

The lowest spend is on online recruitment – totalling £20,700 per employer, or £11.65 per employee. The low cost of this option is one of its main attractions, and the survey reveals that employers in private sector services are moving particularly strongly away from traditional advertising and agency use to rely on the internet.

Employers say the main attractions of both job boards and their own websites are their cost-effectiveness, speed and ease of use for both applicants and HR departments.

…and print holds off an online assault

Although local newspapers are having a tough time, the IRS survey shows that they remain the most widely used of all media types for job advertising. And employers rate professional journals as the best source of high-quality applicants.

But the rise of the internet remains unchecked, with almost as many employers using their own websites to attract recruits. And when asked which medium they used most regularly, the corporate website emerged in first place.

However, the survey shows that employers look to different media for different benefits.

Corporate websites are rated best for value for money, ease of administration, and convenience. Local newspapers are considered best for numbers and diversity of applicants.


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