Real Business Issues: company survey report 2008
JPE are conducting a series of surveys to gain an insight into the real business needs of executives and the challenges they face. Creating a forum for companies themselves to share and create awareness of these important issues...
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‘08 was a year of economic change & uncertainty...
Our results have shown as expected the effects of the sudden downturn but some but some businesses have performed well considering the economic climate. The year also brought further technological innovation. Speed of information retrieval and the array of sources available have helped create a more efficient working environment, continually improving the way companies operate on a day-to-day basis.
A variety of companies took part in the survey. Enterprise software, IT Hardware and services, business information, telecommunications and marketing services were just some of the areas respondents worked in.
This survey will be the beginning of a quarterly probe into the market keeping you abreast of issues that affect your business community.
For more detailed information on the companies that took part, turn to pages 8 through to 12.
There was a mixture of Limited, PLC, Private and VC-backed companies, and annual turnover of respondents ranged from under ÂŁ10m to over ÂŁ500m.
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CONTENTS
We had a great response from our survey. The results you provided have brought to light some interesting trends. For instance there is some trepidation about using technology for certain recruitment purposes.
84% of you have video-conferencing facilities but only 34% of these
companies use video-conferencing to conduct interviews.
In other areas, you are more inclined to the use of technology and would consider using a more digital approach; for example, 55% of you were interested in the option of reviewing potential candidates and their details on a single web page.
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Retention and recruitment tools are also under-used, a surprising result given that some of these tools have proven to be very cost-effective. We hope you find the following results as illuminating as we have, and we hope you that you will help us continue researching your business needs by taking part in our next client survey, due to be sent out in April 2009. And now for the results‌
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InTRO
6
ECONOMIC CLIMATE
2
CONTENTS
7
TECHNOLOGY & RECRUITMENT
3
RESULT HIGHLIGHTS
8
THE INTERNET
4
COMPANY INFO
9
IMPORTANT Issues
5
TIME
10
JOB BOARDS & CONCLUSIONS
05
3
RESULT HIGHLIGHTS time Checking emails is the first task people do on a daily basis, and it’s also one of the most time-consuming tasks you do throughout the day. Taking business calls from recruitment consultants and reviewing CVs are as time consuming as writing contracts/ quotations and sales forecasting.
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INTERNET
News sites are the most popular sites viewed whilst at work, reflecting the need for companies to constantly be informed of current events.
Important issues Performance, churn, total recruitment spend and agencies that only conduct fact-to-face interviews were all considered more important than individual cost per hire.
KEY FACTS;
Technology and recruitment 55% of you would rather review potential candidates and their details on a single webpage. Churn rate was considered more important than recruitment spend, but a surprising 43% of you do not use employee retention programs.
The majority of you (36%) spend between £100–250K on recruitment per annum. Most companies fall into the £500M+ category of turnover.
Economic climate 2008 sales revenue showed an increase over 2007 figures. Also in 2008, most companies increased sales revenue quarter on quarter.
JOB Boards A massive 70% of you don’t use job boards. Of those that do, a staggering 59% spend less than £5k per annum on them, and the majority of companies are unaware of volume discounts available for using multiple job boards via a third party.
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Company information
The the majority of the companies surveYEd work within IT Hardware & Services, with Enterprise Software closely behind.
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cing
8 2
Market Sector
Telecommunications Payroll Services Outsourcing Market Services IT Security IT Hardware and services Enterprise Software Electronics Document Management Currency Exchange Brokers Business Information Audioconferencing Audio Visual 0%
6%
12%
18%
24%
30%
Market Sector
This section of the survey was designed to get background information on the types of companies that responded to the surveys.
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Limited VC Backend PLC Private Limited VC Backend PLC Private Limited VC Backend PLC
42.3 5.8 21.2 30.8 42.3 5.8 21.2 30.8 42.3 5.8 21.2
TYPE OF COMPANY The majority of companies surveyed are Limited, with Private, PLC and VC-backed companies also featuring.
Type of Company Under 50 50 - 100 101- 500 501 - 1000 1001 - 9999 10000+ Under 50 50 - 100 101- 500 501 - 1000 1001 - 9999
17.3 9.6 28.8 1.9 26.9 15.4 17.3 9.6 28.8 1.9 26.9
Limited
VC Backend
PLC
Private 0%
No. of Employ-
10%
20%
30%
40%
50%
Number of employees Businesses containing between 101 to 500 employes topped the tables.
Under 50 50 - 100 101- 500 501 - 1000 1001 - 9999 10000+ 0%
10
6%
12%
18%
24%
30%
Turnover
Under £10M £10 - 19M £20 - 49M £50 - 99M £100 - 499M £500M+ 0%
6%
12%
18%
24%
30%
Turnover Most companies fall into the £500M+ category of turnover.
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5
TIME
Most of you check your emails first thing in the morning.
TIME Time is the one commodity we all need more of. The average working day is crammed with writing reports, attending strategy meetings, responding to emails, taking phone calls, dealing with recruitment issues and meeting deadlines that were due yesterday; time is a constant issue. To help gain some insight into how this breaks down, we asked you some questions on how you spend your time in a typical working day.
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Chart 3
CV Review
Plan Day & Review To Do List 12
Check Emails
CV Other
15
CV Review
46
27
Plan Day & Review To Do List 12
15
12%
Morning Rituals 15% Most of you check your emails first thing in the morning.
27%
Chart 3
12%
ecruitment uitment consultants consultants or touting or touting for for business business
Writing Writing Contracts Contracts & Quoatations & Quoatations 15% 15 15
27%
Email Email 15 15
Reporting Reporting 13 13
17 17
46%
CV Review Plan Day & Review To Do List CV Review Check Emails Plan Day & Review To Do List Check Emails CV Other
46%
CV Other
wing or Sales Forecasting 36
Reviewing CV’s 18
Chart Chart 3 3 15
Answering phone to recruitment consultants or touting for business
Writing Contracts & Quoatations
TIME Consuming tasks Emailing takes up a large portion of the working day, and whilst a lot of business is done via email, although essential studies have proven this to effect productivity negatively. 15
19% 19% 18% 18%
15
Reporting 13
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Chart 3
19% 18%
16% 16% 14% 14% 16% 14%
16%
16% 16%
16%
16% 16% Reviewing or Sales Forecasting 36 Reviewing CV’s Answering phone to recruitment consultants or touting for business Writing Contracts & Quoatations Email Reporting
Reviewing Reviewing or Sales or Sales Forecasting Forecasting 36 36 Reviewing Reviewing CV’s CV’s Answering Answering phone phone to recruitment to recruitment consultants consultants or touting or touting forfor business business Writing Writing Contracts Contracts & Quoatations & Quoatations Email Email Reporting Reporting
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THE ECONOMIC CLIMATE
The economic climate This section in particular struck a chord with you, as this was one of the most responded sections of the survey. After sixteen years of uninterrupted economic growth, the UK officially went into recession in Q4 of 2008. For 2008 as a whole, the UK economy grew by 0.7%, down from 3% in 2007. We are already seeing the results, as white-collar jobs are being cut up and down and country and future prospects currently look poor.
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However, survey results show that over 48% of you had an increase in sales in the last three months to December 2008 compared to the previous three months, and over 64% of you showed an increase in sales revenue compared to the same three months of the previous year. The following was also identified: 56% showed an increase in sales revenue in Q1 and Q2 of 2008 compared to Q1 and Q2 of 2007.
Over 55% showed an increase in sales revenue in the first three quarters of 2008 compared to the same three quarters of 2007.
This was followed by over 58% showing an increase in sales in Q3 of 2008 over Q3 of 2007. In light of doom-and-gloom reports in the news, this data is a surprising and welcome revelation.
56% showed an increase in sales revenue in Q1 & Q2 of 2008 compared to Q1 and Q2 of 2007.
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Key Achievments Career Sumary Career Objectives Personal Goals Mission Statement References Testimonials Key Achievments Career Sumary Career Objectives Personal Goals
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32 30 17 9 8 3 1 32 30 17 9
TECHNOLOGY & RECRUITMENT
Candidate Evaluation
This part of the survey was designed to show how your company currently uses technology in the recruitment process, and to reveal your thoughts on including more digital methods into the process, as well as how effective your current recruitment strategies are. The results are surprising – read on.
Key Achievments Career Sumary Career Objectives Personal Goals Mission Statement References Testimonials 0%
8%
16%
24%
32%
CV’S We asked: what information would you like to see on the front page of a CV? You responded with: (1) key achievements (32%); (2) a career summary (30%); and (3) career objectives (17%).
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40%
55% of you would prefer to view potential candidate details on a single webpage rather than review CVs.
Candidate web pages 55% of you would prefer to view potential candidate details on a single web page rather than review CVs. The web page would have to include the following: • Verified career history • verified customer testimonials • verified employer • verified case studies • verified education • verified training • 30-second podcasts.
Video conferencing • 84% of you have video-conferencing facilities. However,only 34% of you conduct interviews via video conferencing. • 74% of those companies that don’t already use video conferencing would consider using video conferencing for interviews. • The general preference is that over two thirds of you (69%) would rather interview face to face while 31% would consider interviewing via video conferencing.
CANDIDATE EVALUATION Over 30% of you would consider assessing candidates via a podcast presentation made by a candidate.
Recruitment services The majority of you (57%) regularly use contingency recruitment services. 14% of you would consider pay-as-you-go fees (which are spread over twelve months). 18% were unaware of this fee structure.
Retention & recruitment tools Training and coaching: almost half of you (48%) regularly use training and coaching. Aptitude testing: 29% of you use aptitude testing occasionally, with only 18% of you using it regularly. 14% would consider using aptitude testing. Employee retention programmes: the majority of you (43%) don’t use employee retention programmes, while only 23% use them regularly. Gap analysis: 44% of you don’t use gap analysis to guide your recruitment process. Vacancy e-shots: over half of you (53%) don’t use vacancy e-shots to attract candidates. 23% use them occasionally and 11% of you would consider using vacancy e-shots.
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CV short-listing services
Cost of recruitment
The majority of you (37%) use short-listing services occasionally, followed by 25% using them regularly
Annual recruitment spend
Background checking Over a third of you (34%) regularly carry out background checking, followed by 25% of you who background check occasionally. 10% of you don’t carry out any form of background check.
CANDIDATE EVALUATION Over 30% of you would consider assessing candidates via a podcast presentation made by a candidate.
Candidate profiling An equal amount of you (30%) use candidate profiling regularly and occasionally, while at least 29% don’t use candidate profiling at all. Telephone screening The majority of you (44%) occasionally use telephone screening, closely followed by 37% who use it regularly.
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• The majority of companies (36%) spend between £100–250k a year on recruitment (approximately 0.25% of their annual sales revenue) and in some cases (the under £10M turnover companies) as much as 1% of their revenue. • 80% of companies spend their total recruitment budget on recruitment agencies in terms of recruitment budget spend. Recruitment agencies receive approximately 90% of the total recruitment budget. Recruitment agencies still lead the way over job boards, newspaper job listings and specialist media in terms of recruitment budget spend. The majority of companies (59%) spend less than £5k per annum on job boards; although this is a staggeringly high percentage, it is not surprising, as earlier research last year showed that 95% of adverts on job boards were placed by agencies (source: Innovantage).
Less than 50K £50k - 100K £100 - 250K £250 - 500K £1M £500M+ Under £10M £10 - 19M £20 - 49M £50 - 99M £100 - 499M
24 16 36 20 4 30 16 12 2 14 26
Over 55% of companies use reference checking services followed by 25% who use them occasionally.
Churn rate We are not sure at this stage whether this is due to the high numbers of recruitment agencies that exist or if the results show that recruitment consultants are more cost effective than job boards. In our next survey, we will be looking into this in more depth, and will publish the results soon after.
Cost of recruitment
Churn rate in 40% of the companies surveyed is less than 5%, which is encouraging, particularly in the current economic climate, as the costs incurred by having to replace staff can have a major impact on a company’s net profit. In most cases, the first three months’ salary of staff that leave in their first year is higher than the company’s annual recruitment spend for the same people. Employee referral spend was also very low, with the majority of companies spending less than £3k on employee referrals, although this is an area that is increasing rapidly.
Less than 50K £50k - 100K £100 - 250K £250 - 500K £1M 8%
16%
24%
32%
40%
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THE INTERNET
KEEPING UPTO DATE IS A KEY FACTOR IN THESE RESULTS.
WEBSites Bookmarked For this section we asked you: (1) to name the web site you view first when you get into work and (2) to name three websites you view on a regular basis in order to see what information you are retrieving and why. First websites you view The websites you view first when you get into work are (in order of popularity): 1. BBC News 2. company intranet 3. company home page. The most popular websites for this category are news websites; BBC News was the leader, with 33% of the overall total (87.5% of the news sites total). You said that bookmarking and viewing news site enables you to keep up to date with the latest news and economic reports, as well as monitor client activity.
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BBC NEWS IS THE MOST VISITED SITE BY BUSINESS EXECS, TAKING AN 87.5% SHARE OF ALL NEWS SITES VISITED.
Other websites listed in this category were: • CRM • job boards • business networking sites • Newsdesk • recruitment portals/HR systems • search engines Websites you view regularly Of websites you view regularly, news websites again top the list, with 24% of the websites given (with BBC News gaining 67% of the news websites total), with company intranets following with 16%. Next were search engines (Google being the only search engine given) and job boards with 10% of the total each (Monster and Totaljobs leading the field, both with 33% of the total job boards). For more information on job boards, see the job board survey results on page 28.
Other websites viewed regularly include: • personal email websites (8%) • recruitment portals (5%) • CRM (5%) • competitors’ websites (3%) • weather forecast websites (3%) • business networking websites (Linkedin being the only web site given) (3%) • sports news (2%) Overall Bookmarked Sites News sites again top the web (24%) BBC News leading the way again with 67% share of the news sites, with company’s intranet following with 16%. Next was search engines (Google owning 100%) and job Boards with 10% of the total each, Monster and Totaljobs leading the job boards each with 33% of the total.. A massive 70% of companies do not use job boards with Monster and Totaljobs holding joint first closely followed by Linkedin.
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IMPORTANT issues
These results also show that churn rate is considered more important than total recruitment spend.
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Important Characteristics For this section of the survey, we gave you a list of issues and asked you to choose which of these were important to you in terms of recruitment. The top six issues according to the results are (in order of popularity): (1) accurate employment history (2) increased performance (3) churn (4) total recruitment spend (5) accurate references (6) agencies that only conduct interviews face to face.
These issues suggest that reliability and delivering the goods promised are areas of concern when it comes to recruitment and dealing with recruitment agencies. These results also show that churn rate is considered more important than total recruitment spend. However, a surprising 43% of you do not use employee retention programmes (see the section of technology and recruitment on page 17 for more information).
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Expanding Team Replacing People Increasing Revenue
g market sector experience gaps Filling skills gaps Aquiring knowledge Adding or introducing attitude 0%
8%
16%
24%
Reasons for recruiting The two main reasons for companies recruiting are: • to expand the team (32%) • to replace people (30%).
MOST COMPANIES FEEL a greater investment of time at the outset WILL CREATE more closely MATCHED CANDIDATE
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32%
40%
RECRUITMENT agencies: The following are aspects of recruitments agencies that you felt negatively towards:
• A managed service that includes management of other agencies on behalf of companies.
• blanket-email CV introductions, indicating you would prefer a much more tailored and personalised service.
• a more flexible fee structure
• agencies not keeping vacancies confidential.
• more professionalism and knowledge of the client (instead of being so eager to sell candidates)
The following are changes that you would like to see take place within recruitment agencies:
• pre-qualification and time management
• on-site visits to the business.
• a greater investment of time at the outset so that referred CVs match more closely the profile of the position
Replacing people still proves to be extremely costly for companies.
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Q&A
Q: What motivates you more: finding the right job for a particular candidate or finding the right candidate for a client?
A: Finding the right job for a candidate has to be the highest priority – if this is achieved, their success in the role will be greater, therefore benefitting the client. If a candidate is not motivated to perform in a role, they will soon quit, which can be costly for a company in terms of lost revenue, recruitment fees, salary and time.
Q: Do you understand my business?
JPE A: There are two parts to this answer: (1) knowledge about a company (their competitors, their market, the product offerings within the market and the people/candidates within the market) is invaluable; and (2) some recruiters are exceptional at recruiting, their skill and knowledge being in recruiting and not necessarily the market they are recruiting for – any lack of knowledge of the market is outweighed by their ability to execute their recruiting campaign. I admit the first part builds more confidence and is easier to evaluate by the recruiting company, but don’t underestimate some of the recruiters out there that have the ability to deliver outstanding results because of their skill in recruiting rather than their awareness of a particular market.
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We asked you: if you could ask a recruiter a question, what would be your top question? Below are a few of the questions you submitted, and our responses to them:
Q: Why waste time sending us CVs that are not relevant? This only puts companies off using your services.
JPE A: Yes, the level of mud thrown at the wall is unacceptable in the recruitment industry; however, whilst the CV may not be relevant, the person may well be – an experienced, professional recruiter’s recommendation has to be worth more than a one-dimensional document, especially if the recruiter has spent time with the candidate interviewing, assessing and qualifying there experience, but more importantly their attitude and desire for the role they are being recommended for. The biggest problem companies face when judging which recruitment company to use is that the majority of recruiters tend to be at either end of the spectrum of quality – either very poor or exceptionally good. We would like to see a rating system introduced for recruiters, where candidates and clients both have the opportunity to rate the recruiters based on set levels of service. This rating would automatically be updated on the recruiter’s web site similar to the way eBay feedback works.
Q: What value do you add to my recruitment process? JPE A: We add value in many ways. The first is on delivery, we deliver to you the people you need within the time scales you need them by and the second by streamlining your existing recruitment process helping you to reduce costs and improve employee performance. We do this by creating individual solutions that solve the problem rather than costly ones that only treat the symptom. Our knowledge and presence within the market sectors we recruit for will save you time. We also take time to understand your role, company and the vacancy we are recruiting for. JPE has two objectives the first is for the process and the second is the outcome. Our objective for the process is to save you time and money when recruiting. We save you time by understanding your role, company and the vacancy we are recruiting for. We save you money by reducing your cost per hire and increasing your recruitment ROI by delivering people who last longer therefore spreading the recruitment fee over a number of years rather than a number of months. Our objective for the outcome is that we place people that perform in the top 10% of their sales teams. We are skilled at managing the process through to a successful conclusion. Bottom line, we add value where you need value added the most. 27
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JOB BOARDS CONCLUSIONS & RESULTS
Job boards
CONCLUSIONS & RESULTS
A massive 70% of you don’t use job boards. Of the 30% that do use job boards, Monster and Totaljobs are jointly the most used, closely followed by Linkedin.
Having reviewed the results, the following areas could be improved to increase business productivity and efficiency:
The majority of you (38%) don’t use volume job-board CV searches or daily candidate alert services (only 15% of you use them regularly). 40% of you do not take advantage of volume discounts available for job boards (only 18% use them regularly). These results indicate that job boards are either simply not adequately utilised or they are not seen as an effective method of a company’s recruitment strategy.
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Time: businesses spend too much time on recruitment, suggesting that this is an area where new services could be developed to reduce the time you spend on recruitment (e.g. candidate profiling services and job board bundles). The methods of selecting and evaluating candidates are also not as efficient as they could be, with CV reviewing and telephone screening taking up a lot of valuable work time. Again, this is an area that could be investigated further. Churn rate: the churn rate results were encouraging, but as churn can be costly to a business, it’s an area we should keep an eye on. Training and development of people combined with a better understanding of how
WITH THE CURRENT WORLD EVENTS DOMINATING MEDIA AND BUSINESS, THIS SECTION struck a chord with you, GENERATING THE BIGGEST RESPONSE
to manage and motivate them, or simply knowing how to hire the right person in the first place, could reduce churn dramatically. Annual recruitment spend: the best way to reduce recruitment spend is to lower the average recruitment cost per role (not necessarily your cost per hire) – this can be achieved by hiring people that stay in a position longer. Recruit ‘superstar’ and ‘rising star’ candidates (they are easier to manage, will stay in a position longer, will achieve better results and will inspire others, leaving a path of success for others to follow) and make the most of your people, your company’s most valuable asset. Train and develop your assets so that their value
increases – their increased skill will turn into revenue for your company. JPE are planning to launch a number of new initiatives that minimise the time you spend on recruitment. Take a look at JPE’s blog site Recruitment Review (www.recruitmentreview. net) for JPE’s personal analysis of the results and for details on these up and coming initiatives. In the mean time, we hope you have found these results useful. Thank you to all who took part in the survey. If you have any specific challenges or topics you would future surveys please email survey@johnpaul.co.uk with 2009 Survey Topics in the subject box.
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Real Business Issues: company survey report 2008
All rights Reserved JPE Recruitment 2009 The intellectual property rights to this data are owned by John Paul Executive Recruitment Limited (JPE). Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without JPE’s prior consent. The publication or release of any of these data prior to the general release time is an infringement of John Paul Executive Recruitment Limited intellectual property rights. JPE shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall JPE be liable for any special, incidental, or consequential damages, arising out of the use of the data.”
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