Benefits of online recruitment during an economic downturn - 10/2001

Having lived through, and survived the dotcom collapses of the last eighteen months, who better to come to for advice in this current, more general, downturn than an online recruitment company? While other dotcom industries have folded, research shows that online recruitment is growing. The next few months will prove that the industry has come of age, and its value can only continue to grow.

As pressure to find candidates of the right calibre intensifies, the online recruiterís combination of low cost, higher value, speed-to-employment and quality candidates seems an even more compelling offer.

Just look at the pool of talent thatís available. In the UK alone, there are over 14 million people who have access to the Internet, and an estimated 6.3 million of these use it to look for work. The massive growth of the web in the UK is well known, but few people realise that online recruitment is increasing four times faster than general web use. A staggering 30 million people change job in Europe every year and companies need to find faster, smarter ways to access the right candidates.

But what do these companies ñ our customers ñ think? We recently engaged Gallup to conduct a customer and jobseeker survey: 65% of customers were satisfied with online recruitment, and whilst the majority of customers use online recruiting to compliment, rather than replace, traditional methods, over a quarter believe online to be more effective. Cost benefits, speed of recruitment, and access to candidates were all flagged as major advantages.

Online recruitment can deliver these benefits because of the sheer flexibility of the medium in which we operate. Without the constraints of print deadlines we can react to opportunities and pass these on to our clients, in a way no other medium can. A distinct advantage when times are tough.

The key requirement during slowdown must be belt-tightening, and the importance of keeping operational expenses as low as possible. This is where online recruitment leaps ahead of its traditional competitors. A report by Forrester Research states that the average cost to hire an employee via the Internet is nearly ten times less than through newspaper and magazine advertisements. Replacing the 30% fee of the candidateís salary with the average 140 online fee, is a massive cost efficiency. Recruitment budgets are not necessarily less, but employers will certainly need to be more careful with their money; and have the ability to prove and quantify the added value that online recruitment can bring.

Goldman Sachs, the American Investment Bank, has concluded that online recruitment substantially reduces recruitment cycle time, on average from 90 to 30 days. Economic slumps bring urgent strategy changes, and sometimes an urgent need for staff.

In an economic downturn there will inevitably be a rise in redundancies and a subsequent rise in the number of candidates who choose to market themselves online. Employers face a greater choice of who they wish to hire; and it is in this situation that new sifting products will come into their own.

Of course business development works both ways. It is clear that HR professionals will need to refine and adapt their own working practices if they are to match those of online recruitment. In particular, it will be essential to speed up certain work processes ñ acting faster to secure the desired candidate, who now can not only be found faster, but lost faster unless the loop is closed quickly.

Cost savings, wider exposure, speed and effectiveness are unquestionably the key benefits of online recruitment. These factors are obviously important regardless of economic condition, but seem to me particularly vital during an economic downturn. Partnership with, and learning from customers is the way to make online recruitment work. I enjoy being a part of the roller-coaster ride that is the online recruitment industry, and look forward to seeing what will happen in the next episode.

www.stepstone.com