NZ companies could save $600m annually on recruitment

Kiwi businesses could save at least $600 million a year on recruiting new staff, according to a leading recruitment expert. 

The claim is based on data from Statistics New Zealand which shows that in 2016, organisations in New Zealand spent $1.445 billion on recruitment, and have averaged a 1.13 billion annual spend over the last five years. 

That’s twice as much as they should be spending, conservatively estimated at $600m, according to Jonathan Rice, the director of Joyn – a new bespoke, on-demand recruitment service.

“If an organisation goes through a generalist recruitment agency, they’ll pay around 15 percent of a candidate’s salary if they fill the role,” explains Rice. 

“This contingent recruitment model has become tired and outdated. There’s also a lot of smoke and mirrors – companies often don’t know how much work they’re actually paying the recruitment agency for and can often feel in the dark during the process. Or if they try and recruit themselves they often spend far more time on it than they should and don’t have the networks to find the best candidates.”

Rice says that Kiwi businesses make five main recruitment mistakes every day that contribute to the overspend:

1. Doing the recruitment themselves.

2. Spending too much on generalist commission-based agencies.

3. Taking too long. 

4. Hiring mates.

5. Not doing background checks.

By continuing to use outdated recruitment methods, Rice says that Kiwi businesses are throwing away $600m every year. 

“At Joyn, we charge on an hourly basis with no fee per hire and no minimum spend. This ends up being at least 50% cheaper for our clients.”

“With margins getting tighter for a lot of businesses in 2018, savings on things like recruitment can’t be ignored.”

Rice has issued a challenge to businesses currently recruiting for staff to get a free estimate from the www.joyn.co.nz website to see how much they could be saving. 

“All you have to do is go to our website and type in the role you’re looking to fill and the area your business is based and you’ll instantly see how much it will cost to recruit for that position.”

Rice adds that having a specialist recruiter is particularly important in 2018 because a lot of organisations around New Zealand are really struggling to attract staff.  

“The biggest challenge in a lot of industries is undoubtedly finding the right people. The skills shortages in the construction and engineering sectors are well documented but businesses in the likes of the IT sector, amongst others, are also struggling to find top talent.” 

The Digital Skills Forum released a report late last year which claimed to be a ‘warning bell’ to the IT industry – highlighting that of the 14,000 IT jobs created in 2016, only 5090 graduates entered the job market and only 5050 visas were granted to immigrants with technology skills.  

That kind of skills gap highlights the need for new-age, specialist recruitment strategies, according to Rice. 

Since launching in November last year, some of New Zealand’s biggest and most innovative companies have started using Joyn, including the likes of My Food Bag.