There was some serious conversation at the Talent UnConference (TalUnCon) hosted by Electronic Arts on January 25. Specifically, the Talent Planning sessions focused on understanding economic indicators as it applied to workforce planning. However, a very interesting though came up when we turned the conversation around and discussed recruiting as an economic indicator instead. This is an almost obvious indicator to both future workforce needs and the normal business cycle. ((From the Talent UnConference, January 25, 2007. Ideas expressed in this post may be directly attributed to the TalUnCon or might have been triggered by a discussion there.))
After a serious decline in 2000 and 2001, beginning in 2002 there was a marked increase in the recruiting of recruiters. Clearly, when the recruiting of recruiters increases, there is an expectation that organizations are starting to build their pipelines. Even when other economic indicators might be saying that the economy is still stagnating or is in negative growth (recession), the odd are that projected increases in staffing by organizations are a positive indicator. Since Dave Lefkow (of the Electronic Recruiting Exchange) was there, it was fairly easy to see the ties in increases in job ads on ERE’s recruiter job boards and the positive trending of the business cycle at that time.
Additionally, the types of recruiters being recruited also gives us some insight into the trends appearing in the industry. Learning what requisitions are out there (for recruiters) tells you what industries, regions, and businesses are prepping for expansion well before that expansion happens. For example, if the mortgage industry starts hiring lots of recruiters again in 2008, you can bet that they are projecting favorable housing rates and markets 6 months down the line. If technical recruiters are all sitting around with nothing to do, perhaps the tech sector is due for a rough patch.
Later in the event, David Manaster was kind enough to share some statistics from ERE’s job board volumes. While the numbers were stripped out, there seemed to be a significant decrease in the volume of recruiters being recruited in the last quarter of 2006. I didn’t mention this during the session while David had the graph up on the screen, but I’m not about to call a downward trend in the economy just because posting for recruiters on ERE were down last quarter. It appeared to me that there was a quarterly cycle – possibly where postings were generated early in a quarter for the entire quarter. In other words, there were 4 spikes per year. The graph also showed that the last trough of each year was the most substantial. This is mysterious to me since you would think that recruiters are most desired for the January hiring rush, but perhaps recruiters need more time to ramp up, and thus recruiters are needed in Q3 and not Q4. At any rate, serious trough or not, I didn’t see a downward trend from the quick glance.
Lastly, talking about recruiting recruiters, sorry about the redundant redundancy in this post.
9 responses to “Recruiting Recruiters as a Leading Economic Indicator”
Hiring of corporate recruiters tends to lag actual demand (ie most people hire when there is actually too much work not when they predict too much work). On the downward trend there is a lag, though it is often smaller – ie reduced when there is a headcount freeze. I therefore doubt that you will see additional recruiters as a significant lead indicator.
Another indicator that might be useful are recruiting firms shareprice which builds in expectation of future growth in the industry.
Many countries have recruiting ‘barometres’ where a researcher polls companies on an expectation of furure hiring. I believe the UK one is done by Henley.
[…] The following commentary posted on systematicHR.com this morning. Also take a look at the comment rebuttal by Andrew from Resourcing Strategies.There was some serious conversation at the Talent UnConference (TalUnCon) hosted by Electronic Arts on January 25. Specifically, the Talent Planning sessions focused on understanding economic indicators as it applied to workforce planning. However, a very interesting though came up when we turned the conversation around and discussed recruiting as an economic indicator instead. This is an almost obvious indicator to both future workforce needs and the normal business cycle. 1 […]
I’m glad that you found the data interesting. I also agree that there is insufficient data to call a downward trend in the economy – these were hard sales figures for a single, small job board, not a true index of activity. There are multiple explanations for the downward trend in the data (which has been falling for six months, not just the last quarter.) We also could very well be an outlier.
We are actually working on generating some additional data from other sources now for an article at ERE.
It was great to meet you in person – give me a call whenever you are in New York!
I think that probably the primary reason fewer recruiters are hired in the fourth quarter is because hiring budgets typically come out early in Q1, and companies wait to see what the needs will be before hiring a recruiter to get the work done.
I apologize for missing the conference. I still think we are thinking of recruitment in the context of a full employment economy that is based on employment. I don’t know if there are any indicators in terms of how many people, who are self-employed actually fulfill a talent need until company revenues stabilize.
The rules of the game are no sorting it self out right now. Within the self-employment and small business pool are economic indicators. Talent within these sectors build business through reputation and ability to deliver and a good company that fosters these kinds of relationships is typically not in struggle to find good people.
If you truly draw on the advantages of social network analysis, you will find a new form of employment because recruiters will now where to find the talent and people working within the sustainable economy.
John Naisbitt predicted in the 80’s that the new economy would be shaped by pockets of success and pockets or decline. The talent is always lined up in a form of social network within the economy of success ready to go to work.
This is going to shift ways in which we recruit and how companies that are working in a employment economy need to change to be able to reach and hire talent.
I have begun to pilot this thought leadership in a college curriculum and the young people get it!
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[…] following commentary posted on systematicHR.com this morning. Also take a look at the comment rebuttal by Andrew from Resourcing […]
Recruiting efficient people (HR) so that organisation is benefited in the end. In the recruitment process, the recruiter has top be very careful about whom he/she is hiring. Appropriate CV with relevant information plays a major for people seeking jobs.
“Clearly, when the recruiting of recruiters increases, there is an expectation that organizations are starting to build their pipelines.”
This would be a simple yet realistic scenario of a growing economy. Although being a recruiter is a love-and-hate profession by many, it is a profession which has a strong contribution to expanding the workforce in a country, and eventually the economy.