It has been nearly 20 years since “the war for talent” entered the lexicon through a study by McKinsey & Company, and for recruiters, that phrase rings truer than ever. The macroeconomic data indicates the balance in the job market is beginning to tip in favor of jobseekers, and iCIMS’ report on national hiring trends over the course of 2015 confirms that this is being felt at the level of individual employers and jobseekers.
By Josh Wright, chief economist, iCIMS
Certain groups of employers are faring better than others, though, so recruiters should make sure they are adopting best practices, such as the use of social media in both to promoting open positions and making it easier for candidates to apply for jobs. Advances in HR software are giving recruiters more and more data they can use to benchmark company performance—and increasing the pressure to keep up with their competition.
The Challenge for Employers
For months now, government statistics have indicated that the U.S. economy is near what economists consider “full employment”—the highest level of employment that can be sustained without provoking a hazardous outbreak of inflation. Despite the fears of a potential U.S. recession at the beginning of the year, the latest figures indicate that payroll growth has remained robust.
One of the clearest indicators of the tightening job market in 2015 was a modest but progressive decline in iCIMS’ Talent Supply/Demand ratio (TSD) across the more than 3,200 companies using iCIMS software. The TSD measures the average number of applicants per job posting.
According to iCIMS system data, the average number of applicants per job filled in Q1 was 24.0, and fell to 21.3 in Q4. This trend is consistent with the results of the Job Openings and Labor Turnover Survey (JOLTS) published by the Bureau of Labor Statistics.
According to the JOLTS, the number of job openings increased over 2015 from 5 million at the end of December 2014 to 5.6 million at the end of December 2015. The decline in iCIMS’ TSD toward the close of the year may have been affected by seasonal factors, but the fact remains that many recruiters are attempting to fill positions in an environment that combines sustained job growth with rapidly evolving needs—not just the headcount but also the skills each hire brings.
As that reference to the changing nature of work suggests, deeper issues are at play beyond the latest upswing in the business cycle. Average time to fill a position extended slightly over the course of 2015, but longer time to fill appears to be a distinct trend over the last few years, as documented by Glassdoor® and others.
The tighter job market steepens the challenge for employers, and this comes at a significant cost. The Corporate Executive Board (CEB) estimates that an average vacancy costs upwards of $500 a day per open position. Over the 44 days that iCIMS found as its clients’ average time to fill, that amounts to a loss of $22,000 in recruiting costs and lost productivity per open position.
With money like that at stake, employers must keep sharpening their game and updating their sourcing techniques. On this point, the iCIMS Q4 report suggests there remains some work to be done. Average times to fill varied across different regions of the United States and among companies of different sizes. The laggards may need to check whether they are conforming to best practices or are simply facing unusual challenges. One area worth upgrading: presence on social media.
According to a 2015 study by Pew Research, 65% of Americans now use social media platforms, and for many users, these sites have become integral to their professional lives as much as their personal ones. In fact, 57% of jobseekers surveyed by iCIMS say that they used social media at least once a month to learn more about potential employers.
For companies that optimize their social media presence and functionality, the rewards can be substantial. The leisure and hospitality industry saw some of the highest usage of applying via social media profiles, and it also achieved one of the fastest turnaround times between the job being posted and the job offer, with 41 days on average.
In 2015, about 3.3 million applications were submitted via a social network. About 62% of applications were submitted via profiles from LinkedIn, 22% via Google+, and 17% via Facebook. An iCIMS survey indicated that jobseekers have a greater tendency to research potential jobs on Facebook than on LinkedIn, whereas employers have a roughly equal tendency to update their profiles and job listings on Facebook and LinkedIn. Recruiters need to make sure they are focusing their resources where they will have the most impact and that they are keeping abreast of shifting jobseeker preferences.
Tomorrow, more results from iCIMS.