Companies are directing more of their time and recruiting budgets toward social media, but are those investments paying off? Only 1 percent of open positions were filled by candidates sourced through social media, according to a study of U.S. companies with 100 or more employees conducted during June and July by Oakland, CA-based research firm Bersin & Associates. Job boards and internal candidates each accounted for 19 percent of new hires, followed by referrals at 16 percent, and company Web sites at 13 percent with professional networking sites producing 10 percent of successful candidates. The average cost per hire for all U.S. companies was $3,479, while large companies, defined as having 10,000 or more employees, averaged just $1,949. The research firm places total annual expenditures for U.S. talent acquisition at $124 billion, up 10 percent over 2010. Not surprisingly, agencies are the most expensive option, although companies spent less last year. Respondents said they spend more than a third of their recruiting budgets on agencies to fill just 8 percent of their positions with fees averaging 21 percent of first year salary. The survey also found that recruiters are overloaded with resumes, yet at the same time, companies are struggling to find quality candidates. Firms receive an average of 144 applications for every entry level/hourly opening and an average of 89 applications for each professional position. Finally, nearly half of U.S. firms are spending more on contract recruiters in 2011 compared with 2010. The recession prompted most companies to reduce their full-time recruiting staffs. However, as the pace of hiring picked up earlier this year, companies brought in contractors to fill the void.