Poor recruitment methods costing thousands

by Iain Hopkins14 May 2013

Job defections cost the average Australian company (with 100 employees) an estimated $337,000 per year, according to research.

A study by technology and software recruitment business Expr3ss! found that based on a typical model of 100 employees who are being paid $50,000 a year and, incurring an annual staff turnover of 10% – the costs associated with the 10 resignations and recruitment of replacements average $33,700 per employee.

This total includes the management, separation, training, productivity and morale costs in hiring the 10 new employees, which can cost up to $307,000, while recruitment agencies may add an additional $75,000 to the replacement spend (up to 15% per employee).

Australia’s recruitment industry is worth an estimated $3 billion each year and is quickly being transformed by the advent of new technologies. Managing Director of Expr3ss!, Dr Glyn Brokensha, said “Job losses and traditional recruitment methods are costing companies of all sizes billions of dollars per year, which is a tragic waste. Companies need to become more scientific in their recruitment practices by using online tools to cull the thousands of applications they attract through online job boards”, he said.  “Traditional methods of judging an applicant on their resume, presentation, skills and experience are becoming redundant as applicants are becoming sophisticated in developing resumes and expressing themselves to hide their weaknesses and inflate their strengths in job interviews”, he added.

How are you navigating recruitment in your company? Tell us in the comments below.

COMMENTS

  • by Steve Begg In-House Recruitment Group 15/05/2013 2:23:14 PM

    Recruitment is and will always be a person to person process (although there is apparently a robot that google are building which will be the best recruiter ever).

    Technology is extremely helpful in improving the efficiency of the recruitment process but it will not replace it.

    The main point here is that recruiters (people) need to keep honing their skills so that they, as the ultimate filter, are able to identify issues within a candidate. Sure, technology will assist, but it will not replace the person (unless googles robot works).

    Also I question the generalisation that the 10% turnover is caused by poor recruitment. It may of been the best recruitment process in the universe, but the person the new candidate reports to is awful, and he/she is the main driver of turnover.

  • by Nick Hines 16/05/2013 9:58:47 AM

    I have written a number of articles, published on our website www.hmcgroup.net.au, that describe poor recruitment methods, including "10 Common Recruitment Mistakes". http://www.hmcgroup.net.au/a3739048-53d7-4aee-8f14-d2c9b8fd1726.html

    Here's the thing - the best people are NOT looking. If you want to attract the best people to your organisation, you need to really think about how you are going to reach them. The best people are not thinking about new opportunities, and probably not receptive to non personal advertising campaigns. They probably haven't updated their resume in many years. They are busy, usually well remunerated, and enjoy what they do. They are almost certainly not "on the books" with recruitment agencies. Ok some may be but only a tiny percentage of them. If you are in the business of just giving your company's jobs to "candidates" who are looking, then don't read on.

    Simply advertising, particularly only online, will really only fish where the job seekers are. Its like fishing with a net. Cast it out, see what you get and pick the best. At the moment there's lots of fish swimming so you may think its a good market for employment. Most of your recruitment efforts will be wasted sorting through applications and resumes. Often there are not enough candidates and you may conclude that there is a "talent" shortage, so you try to fit the best applicant into the position. Sometimes you may get someone better than average or even good, but hardly ever will you recruit an exceptional candidate.

    What you probably don't realise is that there are big fish out there, you just won't catch them with a net. You need the right rod, use the right bait, pick the right spot at the right time, and use the right technique to catch them. Most often this is best done using a professional third party who is reputable, experienced, discreet and confidential, and who can ethically and effectively identify and attract the best people for the job.

    You may have an internal candidate, but unless it is a clearly defined succession plan which is ready for transition, the best thing to do is to benchmark them against the best available. This will result in the best selection and importantly, it will ensure that the successful candidate has been chosen from a competitive process. Simply tapping someone on the shoulder may create the wrong dynamic, and give them a sense of entitlement.

    Finally, consider recruitment as an investment, not as a cost. Recruitment is the one time in the HR lifecycle when you have an opportunity to find the best.

  • by Nick Hines 16/05/2013 10:02:52 AM

    I have written a number of articles, published on our website www.hmcgroup.net.au, that describe poor recruitment methods, including "10 Common Recruitment Mistakes". http://www.hmcgroup.net.au/a3739048-53d7-4aee-8f14-d2c9b8fd1726.html

    Here's the thing - the best people are NOT looking. If you want to attract the best people to your organisation, you need to really think about how you are going to reach them. The best people are not thinking about new opportunities, and probably not receptive to non personal advertising campaigns. They probably haven't updated their resume in many years. They are busy, usually well remunerated, and enjoy what they do. They are almost certainly not "on the books" with recruitment agencies. Ok some may be but only a tiny percentage of them. If you are in the business of just giving your company's jobs to "candidates" who are looking, then don't read on.

    Simply advertising, particularly only online, will really only fish where the job seekers are. Its like fishing with a net. Cast it out, see what you get and pick the best. At the moment there's lots of fish swimming so you may think its a good market for employment. Most of your recruitment efforts will be wasted sorting through applications and resumes. Often there are not enough candidates and you may conclude that there is a "talent" shortage, so you try to fit the best applicant into the position. Sometimes you may get someone better than average or even good, but hardly ever will you recruit an exceptional candidate.

    What you probably don't realise is that there are big fish out there, you just won't catch them with a net. You need the right rod, use the right bait, pick the right spot at the right time, and use the right technique to catch them. Most often this is best done using a professional third party who is reputable, experienced, discreet and confidential, and who can ethically and effectively identify and attract the best people for the job.

    You may have an internal candidate, but unless it is a clearly defined succession plan which is ready for transition, the best thing to do is to benchmark them against the best available. This will result in the best selection and importantly, it will ensure that the successful candidate has been chosen from a competitive process. Simply tapping someone on the shoulder may create the wrong dynamic, and give them a sense of entitlement.

    Finally, consider recruitment as an investment, not as a cost. Recruitment is the one time in the HR lifecycle when you have an opportunity to find the best.

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