Internal Transfers Growing As Leading

Source of Hire
by
John Zappe
Feb 23, 2009, 12:32 am ET
(the chart in this story was updated February 23)
Once again referrals have turned out to be the leading source of external hires in the
annual CareerXroads source of hire survey. In 2008, 27.3 percent of the external hires
made by the 45 large employers who completed the survey came from referrals made
primarily by employees, but also by alumni, vendors, and others.
Corporate web sites a destination and not an actual source, insists the report was
second with 20.1 percent of the external hires coming from there. Rounding out the top
three were job boards, which accounted for 12.3 percent of the hires.

No big news in those results. For the last several

years the survey that CareerXroads principals Gerry Crispin and Mark Mehler conduct
every January has consistently found referrals accounting for about 3 of every 10
external hires made by the participating companies.
What is different this year is that 38.8 percent of all openings were filled by internal
transfers and promotions.
We found that very interesting, says Crispin. Thats the highest number since we
started this survey eight years ago.
His explanation is that despite hiring freezes, critical openings still have to be filled. But,
now thats being done internally and the jobs the transfers leave are simply being
absorbed by the remaining staff.

In the report, Crispin and Mehler put it this way:

the significant increase in the proportion of internal to external fills in 2008 versus
2007 (28%) is at least partially due to the deteriorating economic climate during 2008.
We think this conclusion is further supported by the survey respondents estimate that the
number of contingent workers employed by their respective firms decreased from 18% in
2007 to 10% in 2008. Clearly the data reflects a shift in emphasis to filling internally and
squeezing external hires.
The report also notes that some of the surveyed companies are filling almost half their
vacancies by internal promotions and transfers. Thats something those companies should
report on their career sites, Crispin and Mehler say, since it evidences their commitment
to career development.
The survey report also identifies a few new trends and strengthens trends first noticed in
previous years. Most notably:
1. Third party recruiters and agencies as a source of hires have been in decline since
their zenith in 2005 when the survey indicated 5.2 percent of hires came from
there. In 2008 that number had fallen to 2.7 percent, a decline exacerbated by the
overall drop in hiring.
Dont place your bet on this side of the market having much of an upside when
the economic climate reverses. It wont, the report says.
2. CareerBuilder has overtaken Monster among the job boards (28.9 percent vs. 23
percent of the total hires coming from job boards), but the report calls it a pyrrhic
victory. We believe this SOH has indeed peaked and predict it will diminish in
the future. However, the report suggests that all of the big, national boards are
losing share to the niche sites, which collectively accounted for 36.2 percent of
the hires coming from job boards.
3. Perhaps not surprisingly, not one of the surveyed companies said it planned to
increase hiring in 2009. Showing the depths of the downturn, the companies
collectively expect to hire 15.7 percent fewer employees this year than last.
Recruiters have come to regard the annual CareerXroads Source of Hire Study as a sort
of guide by which to measure their own companys sourcing. However, Crispin and
Mehler caution that, we seek to stimulate discussion about staffing issues rather than
encourage blind acceptance of data at face value.
The report is compiled from data reported by 45 firms (out of more than 200 invited to
participate) who collectively filled 309,600 openings last year.
Note: The chart accompanying this post has been updated to include two categories
omitted from the previous version.