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I need to find data about recruitment costs companies are spending to fill tech roles
Hello and thank you for your request for information about recruitment costs, particularly for technology jobs. I’ve looked at tech industry sites, recruiting sites, fiancé, media, and consumer goods sites, and other trusted media site, and the short answer is that although I was unable to find information on a specific cost trend of recruitment for technology jobs, recruitment for the average job cost approximately $4,129/candidate in 2016, while one older source put the 2011 cost for a tech hire at $4,339. The only recent source put the cost to hire a developer at $22, 562 for an in-house recruitment, and at $31, 970 for an external recruiter. Looking at trends in the use of technology in different industries could give some insight into the likely outlook for tech job recruitment costs in those industries. A deep dive of my findings is below.
RECRUITMENT COSTS
According to a 2016 report from the Society for Human Resource Management, the average cost per hire in 2016 was $4,129, up from under $4,000 in 2014. I could only find one recent source of the cost specifically for the cost to recruit a developer, and it put the cost at $22, 562 for an in-house recruitment, and at $31, 970 for an external recruiter. This seems high, and may be the result of the use of a different methodology than the other estimates. The only other tech-specific source I found was a bit old, but it gave a 2011 cost to recruit a tech employee at $4,339, more than the 2016 average recruitment cost, so it is likely that tech recruitment in 2017 costs more than the average job recruitment. Cost will vary depending on whether an external recruiter is used, with the average fee of an external recruiter at 22.1% of the new hire’s first year salary. Given that many tech jobs have a salary more than twice as high as the average salary, the amount paid to external recruiters for tech jobs could be higher than the all-jobs average, and this could boost the total tech job recruitment cost as well.
TRENDS IN RECRUITMENT
According to a report by Top Echelon, one of the biggest impacts on recruiters is the declining number of qualified candidates, with 45.8% of recruiters saying this is the biggest difficulty they face. This likely increases recruiting costs, as it probably leads to an increase in the time to hire, and PR Newswire gave the lack of qualified candidates as the reason for the 7% increase in cost to hire from 2014 to 2015. A 2017 survey showed that 65% of recruiters believe there is a shortage of qualified candidates.
A trend in a shift in recruitment metrics is expected to continue, according to Recruiting Trends. Newer metrics include calculating time to productivity over time to hire, quality of hire as measure by length of employment, and employee engagement. It is unclear how this will affect recruitment costs, however.
SPEND BY INDUSTRY
I was not able to find specific data on spending for technology job recruiting by individual industry. However, I was able to identify some general trends that may suggest an increase in recruitment costs in the finance, consumer goods, and media industries, and I've added some information on the health care industry as well.
FINANCE
The finance industry is rapidly expanding the use of technology, with global investment in financial technology up 67% in Q1 2016 over Q1 2015. According to data management company Liaison, “Smarter technologies such as artificial intelligence (AI), machine learning, blockchain, and augmented reality are set to change how the industry delivers services to customers and makes crucial decisions.” Tech security jobs will likely increase in the finance industry, with 69% of CEOs in the industry reporting that they are concerned about it, according to PWC’s 2016 global CEO survey. Data tech job numbers in the finance industry will also likely increase, and Forbes states that “… financial services organizations and investment banks are beginning to harness the power of big data to increase profitability of their businesses, which means recruiters are focused on hiring talent with the expertise to manage such a dramatic industry change.”
CONSUMER GOODS
According to Deloitte, “consumer products companies are actively exploring” VR/AR, which could lead to increased recruiting of programmers in the industry. Data tech jobs may also see increasing recruitment, since according to global research firm McKinsey & Company, “The volume of data emanating from point of sale, in-store engagement, mobile platforms, and social media is exploding and unleashing value from technology in ways that go beyond operational efficiency.”
MEDIA
Deloitte sees VR as an area within media that will see growth, so increased recruitment of developers could follow. WeForum predicts a growth in data technology, saying that “…real-time use of data analytics is particularly important as media organizations no longer just provide content but experiential services built around that content.”
HEALTH CARE
Although you did not specifically ask about health care tech jobs, I've included some information because, according to information from the BLS, the health care industry will be a major factor driving the increase in tech jobs. For example, information security analyst jobs are expected to increase by 18% from 2014-2024, which is far above the 7% for all-jobs average. Healthcare plays a significant role in this, as the use of digital patient record-keeping continues to increase. Correspondingly, over the next year, security analyst job salaries are predicted to increase by 5.7%, and external recruiters will thus likely increase in cost, since they're paid by percentage of a hire's salary. Growth in data tech jobs are also impacted by the healthcare industry. The BLS predicts that the number of database administrators in hospitals will grow by 7% due to increasing use of electronic records.
CONCLUSION
Although I could not find specific costs for technology job recruitment, across industries recruiters are finding a lack of qualified candidates to be a major obstacle, and since this would likely increase the time to hire, it likely increases the cost of recruitment. The healthcare, finance, consumer goods, and media industries are all helping to drive an increase in the number of tech jobs, which could also increase the cost of tech job recruitment.
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