Agencies squeezed as organisations slash recruitment costs


Organisations are reducing their use of external recruitment agencies as an increasing number of them seek to reduce costs by bringing recruitment in-house.

According to the latest IRS Employment Review survey, 73 percent of companies have taken steps to reduce recruitment costs, leading to the reduction in the use of head-hunters and employment agencies.

But spending on Internet recruitment has barely fallen (dropping by only one percent) as firms view its costs as more acceptable to the organisation.

With more than 75 percent of the 125 HR managers surveyed stating that they now have specific recruitment budgets, it appears that increasingly sophisticated in-house selection and recruitment methods - coupled with the widespread use of the Internet - are replacing spending on external recruiters. For example, 27 percent said that that they provide self-selection material to sift applicants at the early stages of the recruitment process.

The survey also highlights a stark contrast in fortunes between the public and private sectors. Some 60 percent of respondents in the public sector have seen recruitment budget increases, a third of manufacturing and production employers have been handing out budget decreases as the sector recession continues to bite.

For recruitment agencies, advertisers and headhunters the message of the survey is clear. The onus is now very much on them to prove their worth and value to recruiters.