Recruiters Expect to Hire More with the Same Budgets in 2017

Study finds automation, ‘big data’ will be top of mind in the near future

By Roy Maurer Oct 28, 2016
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More recruiting budgets will stay flat in 2017 compared with the previous year, despite the expectation that hiring volume will increase for many companies, according to new research from LinkedIn.

Over half (56 percent) of nearly 4,000 corporate talent acquisition managers from 35 countries said they expect to make more hires compared to 2016, even though a majority expect no growth in recruiting head count (61 percent) or budget (52 percent).

Other notable findings from LinkedIn's latest global recruiting trends report include employers' continued reliance on quality-of-hire metrics, increased appreciation for employer branding and the emergence of automation as a top priority in the years ahead.

Just one-third of respondents said their talent acquisition team will grow in 2017 and 37 percent expect to get a budget boost for recruiting.

"This means that as the hiring volume rises, recruiters need to get creative and automate their workflow," said Allison Schnidman, senior market research manager at LinkedIn. "The recruiting teams that are growing are focusing mostly on finding full-life-cycle recruiters and employer branding specialists, indicating the increasing importance of the company's image."

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Over half (52 percent) of the typical recruiting budget for the surveyed companies is slated for traditional spends such as job board advertising and recruitment agencies. Around 17 percent of the budget is allocated to sourcing, screening and recruiting technology, and 8 percent is put aside for recruiting events.

Despite recruiters citing employee referrals as the top source of quality hires year after year, only 9 percent of the budget is allocated to referral programs. And while 80 percent of talent leaders said employer brand has a significant impact on their ability to hire great talent, just 8 percent of the recruiting budget is broken out for branding.

"It got really interesting when we asked leaders where they'd invest if money weren't a constraint," Schnidman said. Given the opportunity, most leaders would prioritize investing in long-term strategic plays like branding (cited by 53 percent of respondents), technology (39 percent), candidate experience (38 percent) and recruiter training (29 percent), according to the report.

"If you are looking for venture bets for 2017, exploring some of these areas may be a great idea," Schnidman said.

When it comes to measuring performance, different aspects of quality of hire dominated the list.

A new hire's length of stay with the company was chosen as the most important metric overall. Larger companies selected time-to-hire as their top metric, and manager satisfaction was also highly rated.

"Smaller firms have unique challenges, and length of stay as one approach to measure quality makes a lot of sense," said Shanil Kaderali, executive vice president of global talent solutions at Pierpoint, a recruiting and talent acquisition services firm based in San Jose, Calif. "Performance is highly visible, so tenure is a good measure."

But larger organizations using time-to-hire as a quality metric is a poor choice, according to Kaderali. "It's not addressing the total talent market and ignores that the requirements of the roles can change when evaluated against the current talent available," he said. And measuring manager satisfaction gives an indication of current performance, but by itself is another inadequate choice, he said.

"Having a holistic review and surveying the manager along with peers would be more insightful, as productivity and impact can be addressed," he added. "Quality of hire without addressing employee impact and time to productivity is like having a beautiful car with flat tires."

Future Priorities

Recruiters chose an increased use of hiring automation and people analytics, as well as more of a focus on diversity hiring, as the key trends of the next few years, according to the survey results.

One-fourth of respondents ranked using automated sourcing tools as the top trend shaping the recruiting industry during the next five to 10 years. "Given that recruiters report limited head count and budget while hiring demands are growing, it makes sense that automation is a priority for the industry," Schnidman said. "Automation would increase the speed of screening candidates, minimize human bias and help assess soft skills more precisely."

Thirty-seven percent of respondents said recruiting more diverse candidates will be a near-term priority, while soft skills assessments (35 percent), and talent analytics (29 percent) were also top of mind. Large companies are driving the focus on "big data," listing it as the No. 1 area in which they want to advance.

"Big data truly is altering the recruitment method in a way that not only makes it more efficient but affords recruiters and hiring companies far greater insight into the recruitment market as a whole," said Jamie Little, principal consultant with Bateman Fox, an executive search and selection firm based in Milton Keynes, United Kingdom.

"By mining the Internet to discover how particular people behave while they are online, recruiters can attain a far greater understanding of the person that has submitted their CV or declared their interest in a particular position," he said. "Being able to see the type of articles an individual reads, how they go about purchasing products and what they buy on a regular basis, recruiters can see details that would perhaps not be covered on a CV or during an interview. Not only does this help with understanding more about candidates, but it also gives recruiters the opportunity to accurately tailor job descriptions and advertising channels so as to reach only the people that will be interested and engaged."

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