Date Published: 9th December 2024
New Zealand, like many advanced economies, is navigating challenging economic times. Yet, despite mounting financial pressures, many employers still need to fill critical roles. Both public and private sector organisations face a delicate balancing act: securing the right talent while controlling costs.
With employee turnover rates climbing back to 15% and showing signs of further increase, organisations face a growing demand to recruit efficiently. Many employers are handling recruitment in-house to save on costs. However, this DIY recruitment approach often backfires, as effective hiring demands considerable internal resources, which are already stretched to the limit in a tough market.
From my experience on the recruitment frontline, I’ve noticed that many organisations stumble into common pitfalls when managing recruitment in-house. Here, I’ll explore the root causes of costly hiring mistakes and share strategies to avoid them, helping you build successful teams with the right talent.
The Hidden Costs of DIY Recruitment
On the surface, recruitment is a straightforward process: Write a job ad, interview the best people who responded to the ad, and hire the best candidate. However, there are several reasons why hiring managers can sometimes struggle with DIY recruitment.
Pressure on Hiring Managers
With job applicant numbers hitting the hundreds for each role advertised, the administrative burden of recruiting can increase significantly. Hiring managers can find it challenging to juggle multiple job applications with their main job responsibilities.
Ineffective Hiring
The cost of a bad hire can be staggering. Our estimates suggest that hiring the wrong candidate can cost an organisation anywhere from 30% to 150% of that employee's annual salary, factoring in lost productivity, training costs, and potential turnover – plus the damage it can do to the team culture and placing stress on those involved. The time it takes to hire an employee averages 44 days – a long stretch of time that can strain a team while you’re searching for a replacement. The longer a position remains vacant, the more pressure builds on your existing employees, increasing the risk of burnout and further resignations.
Drain on HR
For HR teams that are already overextended or perhaps recently downsized, taking on recruitment can detract from their primary responsibilities and hinder their productivity. By outsourcing the recruitment process, your HR team can concentrate on strategic initiatives like employee development and retention, which are just as critical for business performance.
The Benefits of Partnering with an External Recruitment Agency
The upside is that engaging (the right) New Zealand recruitment agency can optimise your hiring process and keep your bottom line looking pretty at the same time.
Market Expertise and Access to Hidden Talent
Reputable recruitment agencies in New Zealand don’t pass on random resumes they’ve collected; they engage in meticulous research and outreach to build a network of pre-qualified candidates.
We can approach candidates with new opportunities as they arise, and because we've invested time in building strong relationships, they're more likely to say 'yes.' This includes passive job seekers – those who aren't actively job hunting but are open to considering the right opportunity.
Speedy Recruitment Process
The longer a recruitment process takes, the higher the cost for your organisation. Each day a position is unfilled can cost money in the form of reduced revenue or productivity gains. With talent networks at our fingertips, we can provide you with a candidate shortlist as quickly as a few days. This rapid turnaround can be crucial when you’re under pressure to fill positions quickly.
Manage Risks
While recruitment agencies charge fees, these are agreed upon upfront, offering predictable costs compared to the unpredictable expenses of internal hiring. Many agencies also provide flexible payment options, like contingency fees, where you only pay if they successfully place a candidate.
Agencies also have rigorous processes for vetting candidates, including credential verification and reference checks. Such important groundwork can get missed by hiring managers when they’re in a rush, so you can minimise the risks of unqualified hires by having an agency filter them out for you.
A Case in Point
A mid-sized tech company was facing rapid growth but had to freeze hiring due to budget constraints. The business required several software developers, key roles that would be essential for continued growth.
Instead of attempting to handle recruitment internally, they partnered with a specialised New Zealand recruitment agency – specifically, Beyond Recruitment!
We quickly identified suitable talent for these positions, and the company hired the candidates we had presented. The result was that the company fulfilled its project requirements, making its clients happy and, in turn, increasing its revenue. By outsourcing recruitment, the company made a significant return on investment, all while maintaining budgetary discipline.
Choosing the Right Recruiter
When selecting a New Zealand recruitment agency, consider the following:
Industry Experience
Look for agencies that have a proven track record in your industry or discipline. They’ll understand the operational reality of your business and what it takes to be successful in specific roles.
Reputation and Reviews
Research the agency’s reputation. Client testimonials, feedback and reviews offer clues about their effectiveness and client satisfaction levels.
Communication and Partnership
Choose an agency that values partnership. At the earliest stages of interaction, they should take the time to understand your company culture, values and specific needs. This will help ensure the best candidates are presented to you for the role.
The Takeaway
In times of financial constraint, you may be inclined to tighten the purse strings and cut back on external services. However, unless your organisation is exceptionally well-resourced for recruiting hard-to-find talent, the time and financial costs of internal recruitment can quickly add up at an alarming rate.
With a recruitment agency, you have a dedicated support system for hiring. When you work with Beyond Recruitment, you’ll gain access to strategic advisors who intimately understand the market for talent in your domain and will do the Mahi to help you find the right people for your team.
I would love to discuss how Beyond Recruitment’s client managers can partner with you to form a long-term, mutually beneficial relationship based on trust, understanding, and, of course – excellent results. Please feel free to contact me or the team to discover your options and find a solution for your hiring needs.
