unique insights in executive recruiting

Annual Employment Survey Results 2013

executive summary

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At milewalk, we are fully committed to bringing valuable insight to the workforce. Irrespective of your vocation, we believe all companies and individuals can support the growth of our economy. We can help achieve this by elevating awareness of key employment information that will help companies manage their employees more effectively as well as enable individuals to make smart career choices.

Following is the report from our third annual employment survey. The survey was initiated to help provide awareness of key factors that affect our work lives. We thank all participants who provided this information. We also welcome any questions and additional thoughts.

We distributed this survey to over 5,000 individuals with 702 responding. The respondent base included individuals who hold positions within management and information technology consulting firms, software companies, and other prominent organizations.

It was evident from the results that most, but not all, of the sentimental improvements from 2011 to 2012 have held for 2013. Even so, that didn’t prevent 60% of the respondents from interviewing for another job in 2012.

When polled in 2012, we noted that the employee base had been quite mobile in recent years. This most recent survey shows that more than half (54%) have been with their current employer for three years or less.

A noteworthy trend that is holding, however, is that their “happiness quotient” in how they feel about their companies and jobs is relatively steady. In addition, the number of employees that were happy and very happy with their company (61%) and role (64%) were triple the number of unhappy and very unhappy (20% in both cases).

One critical issue that was addressed between 2011 and 2012 that has been completed reversed this year is how dissatisfied employees were with their current level of compensation. Almost 1 out of 2 employees feel they are underpaid. Specifically, the 13% optimizing that occurred from 2011 to 2012 was exactly reversed.

Another positive shift from 2011-2012 that was met with a reversal for 2012-2013 was the employee’s attitude toward job changing. This year’s data shows an 11% increase from the previous year in those willing to change jobs. It also shows that the employees’ actions are consistent with their sentiment by an increase of 12.4% in those that have actually interviewed with a company other than their own in the last 12 months. For every 100 employees in your company, 60 interviewed somewhere else in 2012.

As we reviewed the employee’s attitude toward critical areas of their current positions and companies, career development opportunity once again nudged the management team as the most disappointing. Even so, when we evaluated which criteria would lead the charge as they turned to new opportunities, (once again) compensation, culture, and role (in that order) reigned as the top three. The most noteworthy change from last year is that the already number one criteria moving forward--compensation--eased a bit.

One additional perplexing item related to looking to the future is that employee’s seem to place little value on one of the most critical reasons why they leave their current job--their boss. milewalk captures historical insight related to why our candidates are open to changing jobs. 80% cite their boss as one of the top three reasons. Even so, this criteria falls to the bottom when evaluating their next employment option.

As the employees turn to evaluate the market, they will lean heavily on their personal networks (97.3% indicating so). That is a great sign for organizations that rely heavily on employee referrals to grow. Much like last year, 81.2% will also turn to executive recruiters. The most notable change is that while 70.5% will use the social sites, we consider the 8% decrease from 2012 a questionable decision considering the fact that employers leverage sites such as Linked In so heavily.

As we turned to the hiring officials and reviewed their assessment of upcoming needs, important criteria for the candidates, proficiency level of their recruiting functions, as well as additional avenues they deploy to fulfill their employment needs, we confirmed the continued upward trend for hiring. Over 86% of hiring authorities indicated they will be hiring this year. The biggest change from last year is that 53% of those indicated they will add more four or more resources, up from 41.4% for 2012.

With the hiring needs in place, these officials cited “time to fill” as the greatest disappointment. Candidly, we believe that “time to fill” is not the actual issue, but a symptom of a lack of quality candidates (the second most disappointing criteria). Employers simply move more quickly when they have a quality candidate in their recruiting pipeline. Over the last nine years, our historical milewalk statistics indicate a 38.2% greater level of efficiency in these cases.

Interestingly, while 83.7% of the companies are leveraging internal recruiting resources, a significant portion also rely on executive recruiters (46.5%) and independent contractors (27.9%) to supplement those internal functions. The very startling change from 2012 is that there was almost a 10 point drop in firms using their own internal recruiting and a more than 10 point increase in those deploying executive search firms.

As companies interview potential employees, they will favor cultural fit and capabilities and over track record of achievement and specific skill sets. While this has historically been the case, specific skills had become a greater focus in the last few years because the hiring needs have waned. What we are noting in practice is that this shift is becoming greater and organizations are now trying to recruit “best athletes” even if they don’t have the specific skill sets. It is our opinion that this precipitates from the difficulty employers are encountering in their recruiting efforts.

demographics of the survey

14%

2%

15%

3%8%24%

18%

16% CXOMarketingSalesHRRecruitingPractice/Engage/Project MgmtTechnologistsOther

resource types total respondents

195

507

Hiring AuthoritiesEmployees

We distributed the survey to over 5,000 recipients. These individuals hold various roles in information technology consulting, software, and other prominent companies. We have outlined the primary functions of the 702 actual respondents...

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means to secure your job

20%

25%

7%5%8%

16%

11%8% Employee Referral

Personal Network (Non-Employee Referral)Company WebsiteJob BoardCompany Recruiter ContactedExecutive Recruiter ContactedOwner/Entrepreneur/ContractorOther

We evaluated 15 potential ways an employee can find a job and aggregated them into a manageable list (8) to help when reviewing the probabilities of these mediums to secure your next position. Granted, these percentages change when factoring experience and compensation levels, but these numbers are good guidelines--and current.

The major leaders are your personal network (a combined 45% if you consider employee and non-employee referrals) and executive recruiters (16% which is twice as much as a corporate recruiter). Job boards seem to be waning at just under 5%, and social media sites such as Facebook and Twitter were so insignificant they didn’t even register (we tossed them into other). It is worth noting that the individuals likely to respond to our survey work for white-collar corporations, so the social sites might be more productive for other, non-corporate positions. Lastly, consider that 11% of the respondents is company owners and entrepreneurs including independent consultants.

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9.3%

25.5%

20.9%

44.1%

23.2%31.2%

14.2%

31.2%

Less Than One Year1-3 Years

4-5 Years

Over 5 YearsHiring AuthoritiesEmployees

tenure of the employees

We noted the overall tenure of the employees and hiring officials. Interestingly, over 54% of the employees that responded have been with their current organization for three years or less. That is virtually identical 2012 (56%). The overall percentage of employees who maintained an over-five-year tenure with their current organization held steady from 2012 (32.6%).

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attitude toward employment

Hiring authorities scored their “happiness quotient” approximately 11% higher than employees (this is typical). An interesting note is that the happiness quotient of both employees and hiring officials is virtually identical to 2012. While the chart below depicts an average score of happiness, the actual empirical data shows that the employees that were happy and very happy with their company (61%) and role (64%) were triple the number of unhappy and very unhappy (20% in both cases).

Hiring Authorities

Employees

1 2 3 4

3.6

4

happy with your company on a scale of 1-5 (5 most happy)?

Hiring Authorities

Employees

1 2 3 4

3.6

4.1

happy with your position on a scale of 1-5 (5 most happy)?

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attitude toward compensation

It is clear from the survey that almost 1 out of 2 employees feel they are underpaid. The optimizing that occurred from 2011 to 2012, in which there was a 13% decrease in those feeling underpaid, has been identically reversed from 2012 to 2013.

do you feel adequately compensated?

0%

15%

30%

45%

60%

4.6%

58.1%

37.2%

2.6%

53.5%

43.7%

Overpaid

Right Amount

Underpaid

Hiring AuthoritiesEmployees

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attitude toward changing jobs

This information showed a precipitous change from the previous year--with virtually a complete reversal of the attitude improvements made from 2011 to 2012. This data shows an 11% increase from the previous year in those willing to change jobs. It also shows that the employees’ actions are consistent with their sentiment by an increase of 12.4% in those that have actually interviewed with a company other than their own in the last 12 months. For every 100 employees in your company, 60 interviewed somewhere else in 2012. It was painful to write that last sentence.

would you change jobs for the right opportunity? interviewed with another company within the last 12 months?

Yes84.8%

No15.2%

Yes60.7%

No39.3%

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attitude toward critical areas of position and company

We asked employees to assess their happiness level of the many critical areas related to their position and company. They indicated they are most satisfied with their teammates, but are most disappointed with their career opportunities and management team. Interestingly, these numbers are virtually identical to how they felt in 2012...

Boss

Career Growth Opportunity

Current Position

Management Team

Team Members

Compensation & Benefits

1 1 2 3

2.6

2

2.7

2.4

2.8

2.2

happy with your position and company on a scale of 1-5 (1 most happy)?

Oddly, even though this is the area that employees are most disappointed, it is saddled as the 4th most important criteria they will evaluate when seeking a new position (behind compensation, culture, and role).

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attitude toward most important criteria in selecting next position

Of the top ten elements that most individuals review when changing jobs, we saw the same top three of Compensation, Culture, and Role as in 2012. The good news is that the Compensation component dropped 5.4 basis points for a 8% decrease while Culture added 8.3 points for a 20% upswing. Again, we point out that Career Growth Opportunities, cited as the most disappointing factor of the employees’ current situation falls to fourth in factors they consider when seeking their next position. One other glaring point that employees don’t seem to grasp when evaluating their next position--80% of the over 10,000 individuals we’ve interviewed in that last nine years have cited their boss as one of the top three reasons they are willing to leave (or have left) their current position yet it falls near the bottom of the pack when evaluating their future.

Company Type

Company Culture

Career Growth Opportunities

Boss

Role/Function

Type of People & Team Members

Compensation & Benefits

Office Enviroment

Work Location

Travel Requirements

18% 35% 53% 70%

15.1%

31.2%

7.1%

66.0%

31.2%46.4%

21.4%41.0%

49.1%16.9%

top three criteria in selecting your next position?

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attitude toward resources that facilitate changing companies

We asked employees which avenues they would deploy in finding their next opportunity. There was no surprise that an overwhelming majority of 97.3% would tap their personal network. Holding consistently from last year was the number that would turn to executive recruiters (81.2%). At a fast glance, the graph below makes sense, but what is questionable is why there would be an 8% decrease from 2012 (after a 13% increase from 2011) in those leveraging the social media sites--which have become the most popular tools employers are using to find and lure talent.

Personal Network

Job Boards (Monster, Hotjobs, Dice, etc.)

Social Media Sites (Linked In, Facebook, Twitter, etc.)

Corporate Sites (Apply Direct)

Executive Recruiters

25% 50% 75% 100%

81.2%

61.6%

70.5%

57.1%

97.3%

avenues you would consider to help find your next company?

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outlook for hiring

We reviewed the hiring needs for companies. It was apparent that we continue to experience an upward trend, with over 86% citing they will add resources to their teams. There also was an uptick in the resource numbers from 2012. Last year, 41.4% of the teams were adding four or more resources while this year’s target is over 53%.

None

1-3

4-5

More than 5

10% 20% 30% 40%

32.5%

20.9%

32.5%

13.9%

how many resources will you add to your team in the current year?

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attitude toward recruiting function

We asked hiring officials to evaluate their organization’s recruiting function. “Time to Fill” was for the third year in a row cited as the greatest disappointment, however, we view that more as a symptom of lack of quality candidates than the actual issue. We have captured historical statistics over the past nine years that indicate our clients move 38.2% faster when engaged with a higher quality candidate.

Number of Quality Candidates (ability to source)

Time to Fill Position

Communciation to Hiring Officials

Ability to Close/Sell to Quality Candidates

Overall Recruiting Function

1 2 3 4

3.2

3.5

3.3

2.8

3

rate your organization’s recruiting function on a scale of 1-5 (5 most satisfied).

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sources engaged to satisfy hiring needs

We reviewed the people and service-related avenues that organizations deploy to satisfy their hiring needs. We omitted job boards and other non-active means assuming that organizations are using them to some extent. While 83.7% of the companies are leveraging internal recruiting resources, a significant portion also rely on executive recruiters (46.5%) and independent contractors (27.9%) to supplement those internal functions. The very startling change from 2012 is that there was almost a 10 point drop in firms using their own internal recruiting and a more than 10 point increase in those deploying executive search firms.

Internal Corporate Recruiting Function

Executive Search Firms

Recruiting Process Outsourcing Firms

Independent Contract Recruiters

23% 45% 68% 90%

27.9%

23.2%

46.5%

83.8%

sources you deploy to satisfy recruiting needs?

Oddly, there was a 10 point or so exchange between the drop in deploying the corporate recruiting function and adding executive search firms. That;s technically more than a 30% uptick for search firms.

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attitude toward candidate criteria and requirementsmilewalk clients and candidates have been introduced to our predictive matching model that incorporates key criteria related to fit as well as emotional influences (omitted here for simplicity) that act upon an individual as she evaluates a career change. The nucleus of this methodology centers on the four greatest predictors of recruiting and retention success (below). Our analytics has proven that not only are these the four greatest predictors, but also that the relative priority of these criteria is Culture Fit, Capabilities, Achievement Record, and Specific Skills.

In recent years, companies have favored specific skills due to their lack of resource needs and desire for the “perfect fit”. In 2012, we saw a shift toward recruiting “best athletes” even if they don’t have the specific skills. It is our opinion that this precipitates from the difficulty employers are encountering in their recruiting efforts. Those changes that occurred from 2011 to 2012 have proven consistent with employers’ sentiment for 2013.

Cultural Fit with Company

Capabilities (Demonstrated Capacity to Perform Function)

Achievement Record (Long-Term Record of High Performance)

Specific Skills/Experience to Perform Function

1 2 2 3

2.7

3

2.2

2.1

rank the following criteria in order of importance when evaluating an employment candidate (1 most important).

A noteworthy point for 2013 is that we will be teaching these concepts starting in April at the Institute for Human Resources where participants will be able achieve iHR and SHRM accreditation in the Quality of Hire program by passing our test related to these concepts. If you’re interested in seeing the material live or on demand, please inquire.

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about milewalk

milewalk is an executive search and human capital consulting organization that specializes in matching top quality information technology and strategic professionals with high-caliber companies.

Our team is comprised of former information technology and strategic consulting professionals who held positions similar to those our clients and candidates seek to fill. This industry-specific knowledge helps us recognize those resources that become most valuable to organizations. Our vantage point coupled with a far-reaching network of candidates enables us to quickly match the right people to the right opportunities.

We emphasize our unique perspective in our name – milewalk – we have walked in your shoes before. This distinct point of view helps us more effectively navigate our clients and candidates through the search process to ensure everyone succeeds. Even more than our experience, our dedication and commitment to our clients and candidates set us apart. Our high quality, timely results help us build long-term relationships that benefit all of us.

milewalkwww.milewalk.com

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Park Ridge, IL 60068847-685-2040