Poor recruitment plans push up business costs

Most businesses say their people are their most valuable resource. Yet a new survey from recruitment company Chandler Macleod has revealed six out of 10 Australian businesses do not have a documented recruitment plan and 49% of organisations consider the recruitment function to be “strategic”.

The survey, which canvassed 166 organisations, found most companies spend little time thinking about recruitment. Of the firms that do have documented recruitment plans, only 28% of plans are linked in any way to organisational strategy. Just 29% of enterprises had an “employer value proposition” articulating their appeal to potential recruits, and 65% of survey respondents reported having no structure to measure critical recruitment and selection outcomes such as retention, quality of hire, and cost and time to hire. A third of respondents could not say how much their employer spent on recruitment.

General manager for talent management services at Chandler Macleod, Sue Healy, says there is a clear link between poor retention policies, poor staff morale and increased staff turnover. And given that the cost of hiring a new staff member is estimated at $15,185 by Chandler Macleod, increased staff turnover means increased costs. “It’s also the cost of the increased time to fill roles,” Healy says. “In essence, it’s taking 81 days to get an employee onboard. That’s a huge cost to the business in terms of the time not to have that role filled, and then the time to train the new hire.”

Healy says that while most businesses want to improve their recruitment processes, they become too focused on day-to-day operations. But boards and senior management teams must start incorporating a recruitment plan into their broader strategic plan or risk seeing staffing costs blow out. “Resourcing is tight in all orginsiations and the pressures of business today just don’t allow people to take that breather and say ‘how can we do this better’,” Healy says. “I think that they’ve got to understand that talent is a serious issue for their business. They must commit the resources and the budget to it.”

The survey also revealed that despite the rapidly slowing economy, 51% of respondents expected the number of hires to increase over the next 12 months, while almost a quarter expected recruitment numbers to decline over the same period. “I think it’s a really positive outlook. It’s identifying a certain amount of resilience that we experienced the last time the economy turned down,” Healy says.


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