Did you know…
Major global skill shortages are widely anticipated by industry experts. Prior to the global recession, some predicted America would face a resource shortfall for around 10 million jobs by 2010.
The time-frame may be altered but in the not too distant future, this will affect the New Zealand labour market too. We’re likely to see more recruitment drives from offshore multinationals luring our talent to ‘greener fields’, leading to a greater ’brain drain’ and an increase in migration.
New Zealand’s workforce is also changing rapidly as Generation Y enters the workforce, and employee expectations change.
To combat these challenges, it is essential companies take back some ownership and develop stronger recruitment skills in-house to ensure their sustainability and growth.
Unless you know how to define your job requirement, who your target market is and how to reach out and communicate with them, you’ll be looking at very expensive alternatives.
In New Zealand, recruitment agency fees are typically 15 – 22% of the candidate’s first year basic salary. In comparison, several years ago it was typically 12 – 17%. Get ready for this to climb over the next few years as the cost increases for agencies to source candidates in a skill short market. It’s supply and demand 101!
Research tells us overseas recruitment agency placement fees are typically 20 – 30% – capped at 40%! We are bound to follow suit.
For some, this may be money well spent. But what if the incumbent leaves within 12 months? This is not uncommon in today’s workforce where employee loyalty (especially Gen Ys) is based on “what’s in it for me?” Will you be able to afford to recruit several roles a year?
Why bring recruitment in-house?
Given the increasing challenges and costs, it seems prudent to invest in in-house recruitment systems. Until now – (see Chilli Factor Recruitment Software) the time to build in-house recruitment knowledge, systems and processes has been both time-consuming and expensive. This is a major factor why recruitment is outsourced to agencies. We’ve heard the argument “It’s easier to just write the cheque and get someone else to do it.” It might be quicker and easier but it doesn’t necessarily mean you get the best the result. Instead, consider the ROI bringing recruitment in-house can achieve, such as reduced time and cost to hire; improved ability to attract and retain top performers; and increased staff productivity and performance.
Recruitment campaigns are often reactively managed by Hiring Managers because of lack of recruitment skills, knowledge and time. Many do not treat recruitment as a business project as it should be – especially given the risk poor hires can be expensive and negatively impact their business.
Recruitment is not just about filling your job vacancy. It involves spending time understanding why your position exists, defining clear job expectations, understanding and connecting with your target market, maximizing your compelling offer, managing a best practice candidate selection process, making the right hire decision, skillfully transitioning new hires into the business workplace and always understanding your employee needs and expectations.
3 basic steps to get you started
- Create and implement a consistent company-wide recruitment process.
- Provide all Hiring Managers with basic recruitment training.
- Unbundle your recruitment process and engage third party assistance only where you need it. This will slash your third party recruitment expenditure.
3 recruitment practices you can use in-house right now
- Do your own work history reference checks or engage an impartial service to do so for you
- Implement an exit interview process to understand why all employees leave, especially performing staff so you can address and counteract this in the future
- Implement an Induction programme to help retain the talent you have worked so hard to employ!
We’ve made bringing recruitment in-house easy – there’s no need to start from scratch and reinvent the wheel. Subscribe to Chilli Factor Recruitment Software today and gain instant access to the all-in-one recruitment management software to help you attract, engage and hire the right person for your job; and reduce your time and cost to hire.