Agency Recruiting: The Unmanaged $8 Billion Spend: The Fordyce Letter

2012 was one of the biggest M&A years for recruiting technology: Kenexa bought by IBM, Taleo by Oracle, SuccessFactors by SAP, etc. With all the consolidation and innovation, however, it’s ironic that one major source of talent acquisition remains stubbornly resistant to change: the way companies find, communicate, and work with search firms.

The oversight certainly isn’t due to a decline in the relevance of third party recruiters. Despite the emergence of LinkedIn, recruiting agency usage is exploding. Staffing Industry Analysts’ most recent report predicts that agency spend will hit $8B in 2014 (not including retained search), more than double what was spent as recently as five years ago. CareerXroads, in its 2013 Sources of Hire report, found agencies were responsible for 3.1% of all hires in 2012. Since agencies account for some of the most critical hires any recruiting team will make, one would think of this as an area corporations have locked up and tightly managed.