The Impact of the Recession on Recruitment in South Africa

The SA Recruiters Network recently conducted a survey amongst South African Recruitment agencies as well as Human Resources and Hiring Managers of Corporate South Africa to review the impact that the recession is having on recruitment.

The SA Recruiters Network is an online networking community for South African Recruitment and HR professionals. It was formed in May this year by Gillian Meier, CEO of South African Job Portal, Says Meier, 'The network was created to provide a platform whereby recruiting professionals would be able to network, and share recruitment best practices and insights with other industry professionals. In only a month the membership has grown quickly and the activity amongst recruiters is encouraging and demonstrates a willingness amongst recruiters to want to work together towards a common goal under a trying time'.

Throughout the month of June the network ran two separate surveys - one focused on Recruitment agencies and another on HR and Hiring Managers from Corporate South Africa. The surveys were both geared around acquiring insight into the impact that the recession is having on hiring within companies as well as the effects that are felt as a result thereof by the recruitment industry. A second part of the survey focused on understanding how both the Companies and Recruitment agencies are adapting their recruitment strategies to meet their current hiring needs under the financial crunch.

Before the recession many Recruitment agencies were working on anywhere between 20-50 vacancies on average per month, with 15% handling more than 51-100 vacancies in a month. Since the recession this number has dropped significantly with less than 3% of Recruitment agencies handling between 51-100 vacancies in a month and over 70% now only working on no more than 20 job specs in a month. Where more than 70% of agencies were on average making more than 5 placements monthly, 72% are now placing less than 5 candidates monthly. The current economic situation has forced many Companies (22%) to put a freeze on hiring with 56% commenting that they are only replacing critical roles, with several large organisations now hiring less than 20 employees per annum.

Both Companies and Recruitment agencies have recognised a need to become smarter in their recruitment strategies. More Recruitment agencies are realising the value of having their own websites and now frequently make use of these to advertise opportunities that they are working on. Employers and their agencies both feel that having access to a central CV database will provide the most value with regards to filling critical roles quickly at minimal cost. 98% of Recruitment agencies surveyed felt that it is important that they access CV databases while 88% currently subscribe to an online CV database, and 73% of companies surveyed said that they were interested in accessing some form of external CV database. 41% of companies already make extensive use of their own CV databases to find suitable skills and 46% frequently advertise their vacancies on their own website's careers pages. 45% of Companies still make use of recruitment agencies to assist them in filling critical roles in addition to advertising the vacancies themselves on job boards (44%) and in newspapers (22%).

Other recruitment tools identified as key strategies this year include branded job advertising on job boards with the ability to automatically match candidates to job ads with alert notifications; as well as automatic applicant screening, filtering and rating tools. Integration of internal recruitment management systems with existing careers websites, with the ability to automate and streamline job advertising with major job portals, together with centralised application management tools was also considered an important requirement by many Companies.

The adoption of social networks as a recruiting tool is still slow with 24% of Recruitment agencies and only 12% of companies utilising the candidate targeting tools available through these online networks, while both companies (31%) and agencies (52%) are still relying heavily on word-of-mouth referrals to find the best quality talent with the lowest possible cost of hire.

Download Executive Summary:SA Recruitment Survey 2009

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