Talent costs soaring, trans-Tasman survey reveals

Research from unicorn Employment Hero, an Australian cloud-based HR management tool, shows 72 percent of New Zealand SMEs are struggling to compete for talent against big businesses.

“This might be due to factors such as attractive remuneration packages, extensive benefits, and global brand recognition that large corporations can offer,” says Employment Hero founder and CEO Ben Thompson. 

Employment Hero, which recently raised A$263 million in a Series F round, is evolving from an HR and payroll software platform to one that helps employers recruit, pay and manage talent. 

Its State of Recruitment Report, also found that more than half of New Zealand companies reported that 5 percent of their new hires departed within the first six months, or during their probation period. 

This trend points to a need for improved onboarding processes and retention strategies, says Thompson. 

The report surveyed 506 business leaders, with 255 from New Zealand and the remainder from Australia. 

Further New Zealand findings show that:

• 12 percent of hiring leaders in New Zealand felt the pinch of increased advertising costs, which they say have more than doubled in the past year
• Two-thirds of Kiwi SMEs say they can’t afford higher-quality technology to assist in the hiring process
• Hiring leaders in New Zealand are spending an average 38 hours a week trying to attract new staff
• The two main reasons for increased hiring costs are higher salaries due to rising living costs and skills shortages. Compared to Australia, New Zealand hiring leaders were also more affected by increased jobs board posting costs (31 percent versus 5 percent), higher foreign worker levy and work visa costs (14 percent versus 8 percent), and increased time to hire (30 percent versus 24 percent).

So what can small businesses do? 

Understand your candidate‍

New Zealand recruitment agency HainesAttract says understanding what candidates are looking for is key to a successful hire.  

Smaller businesses offer experienced talent the chance to shape things and create opportunities for them and the employer, says head of international solutions Ben Tinker.

“We often hear that those joining SMEs can point to the impact they make; they are able to influence the outcome for that business.” 

‍

If the candidate is the kind of person to say ‘it’s not in my job description’, then it's not for them, he says. 

Bigger businesses provide training opportunities and experiences more suited to early-stage employees, says Tinker. 

HainesAttract has also found that for those coming from overseas, lifestyle decisions often feature heavily in the choices candidates make.

“Being able to work while taking advantage of what New Zealand has to offer – whether that's beaches or mountains, sand or snow – is increasingly important to people, particularly those with families,” says Tinker.

‍

Leverage your strengths

Employment Hero’s Thompson says it’s important for Kiwi founders to highlight the advantages of working for a small business over a multinational for job seekers and employees and that SMEs can compete in areas such as culture, flexibility and growth despite budget constraints.

He also says smaller companies can offer less competition when it comes to career progression and salary increases, and faster hiring processes than multinationals.

The key for SMEs is having an agile work environment that aligns with how people prefer to work. 

“It’s often smaller businesses that can offer these perks and have more breadth to understand their employees' strengths better to develop a working model that benefits both the satisfaction of staff and business output,” he says. ‍

‍

Develop your story‍

Telling a compelling and credible story about your business is crucial to help potential candidates find the right role and type of company, says Tinker.

Identifying what your business offers and telling that story consistently in every ad or interaction with the candidate will allow them to choose a role and company that suits them, he says. ‍

‍

Plan ahead‍

To get out of a ‘reactive state’, Tinker says businesses should spend time figuring out who their next two hires need to be.

He says smaller businesses need to view recruitment as an investment rather than a cost. ‍

‍

Be brave‍

“If that right hire comes along in a market like this, [...] look at how you can make it work,” says Tinker. 

Then, induct them well.