DirectEmployers Association, a nonprofit consortium of over 200 leading U.S. employers and operator of the employment search engine, released the results of an in-depth industry study, conducted on its behalf by strategic management and technology consulting firm Booz Allen Hamilton, that shows the Internet is now the primary hiring source for employers.

The study of hiring practices at leading U.S. companies revealed that Internet sources produced 51 percent of all hires in 2005 with the largest source of hires being the employers' own corporate Web sites, while newspaper classified advertisements were the source of only 5 percent of the new hires.

According to the study, individual percentages of new hires for each Internet source are: Corporate Employment Web Sites: 21 percent; General Job Boards: 15 percent; Niche Job Boards: 6 percent; Social Network Web Sites: 5 percent; and Commercial Resume Databases: 4 percent.

Employers reported that they find the highest quality candidates and receive the highest return on their investment from their own corporate Web sites and from employee referrals. Financially, while general job boards represent the highest recruitment spending category for corporations, capturing 27 percent of the recruiting advertising budget, employers in this study reported that such boards generated only 15 percent of new hires in 2005.

In addition, as the economy heats up in 2006, employers report they will significantly increase employment-related spending in the following key areas: corporate employment Web sites: 74 percent; employee referrals: 68 percent; and social networking technology: 60 percent

According to Dr. Rich Cober, the Booz Allen Hamilton team lead, this research report "provides clear evidence that the Internet has transformed the way American employers attract and hire employees. As we look at 2006, employers are giving serious thought to how the Internet can be better used for driving applicant flow. In light of recent regulatory changes, including the new definition of an internet applicant, employer efforts to focus applicant flow and provide clear direction on how individuals should express interest in jobs is timely. Responses indicated that employers anticipate directing a greater proportion of applicants through their own corporate Web sites rather than any other online source in the year to come," said Dr. Cober.

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