Corporate recruiters may be increasing their expenditure on recruitment, but they are failing to evaluate if the process is providing value for money. The latest findings from the Recruitment Confidence Index (RCI), produced by Cranfield School of Management, reveal that 84% of organisations expect their overall recruitment expenditure to increase or stay the same over the next six months. Despite the increasing amounts of money that organisations are spending, less than half (49%) systematically evaluate the success of an individual recruitment process. While two thirds of organisations (66%) do evaluate the success of the overall recruitment process, only a quarter of these do this on a ‘cost per hire’ basis – the true measure of a process’s value for money.  

Dr Emma Parry, Research Fellow at Cranfield School of Management, said: “These results paint a worrying picture of organisations throwing money at recruitment without any idea if they are receiving a suitable return on their investment. This suggests that when recruitment is unsuccessful, recruiters just spend more and more on the same processes, rather than systematically assessing the success (or failure) of the methods they are using and making changes accordingly.” The research shows that around a third of organisations (32%) have invested in a recruitment management system that may be able to track the success of recruitment in terms of costs per hire, but only around half of these (51%) are using the system to produce statistics that could assess the success of individual recruitment methods.  

Commenting on the findings, Adam Wright, Client Services Director at Konetic which sponsored the research said: “Unfortunately, we weren’t surprised by these results. Some companies purchase recruitment software and then try to change their internal processes to match the way their new systems work. This can create huge friction within an organisation, as end users become resistant to change and the ‘real world’ business objectives – improved management reporting and consequent cost savings - are not met.  “A much better approach is to set a practical business objective – such as direct cost savings, or producing a preferred supplier list of Agencies – then identify the management information and reports you will need to verify that goal, and only then find a recruitment management system that will give you the data you need.” 

The latest RCI findings also show that:

• 43% of respondents expect to increase their expenditure on commercial job websites, 34% on employment agencies and 22% on executive search (headhunting) over the next six months. 
• 37% of respondents who evaluate the success of the overall recruitment process, do so based on the number of shortlisted candidates. Another 35% evaluate recruitment based on the time taken to fill the vacancy.
• 27% of respondents who evaluate the success of the individual recruitment methods, do so based on the time taken to fill the vacancy, while 24% use the number of percentage of shortlisted applications received using that method.  In addition 23% evaluate individual recruitment methods based on the overall cost of using that method.  
• Respondents stated that the ability to target particular groups of job seekers, and the reach of a method, were the most important factors when selecting which recruitment method to use. 

NOTES FOR EDITORS

 ·         The Recruitment Confidence Index is a quarterly survey of public and private sector employers that measures expected changes in recruitment activity and business conditions during the next six months. It also looks at recruitment methods, skills shortages, staff turnover and pay rates. The RCI was set up six years ago by Cranfield School of Management and The Daily Telegraph and is currently produced by Cranfield School of Management, in association with Personnel Today. 

·         Konetic provides a complete online solution for recruitment, applicant tracking and processing. It includes tools that let companies monitor, control and cut their cost per hire, take control of diverse resourcing processes, and drastically improve candidate, agency and line manager communications.  

·         This quarter the RCI survey drew on responses from 557 senior managers around the UK. ·         The full report is available to the public, price £50. To obtain a copy contact Dr Emma Parry, Cranfield School of Management on 01234 754808 or e-mail emma.parry@cranfield.ac.uk 

·         This quarter’s hot topic was sponsored by Konetic (details) The report is available free of charge to members of the media from Fiona Leslie (see contact details below).   

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