www.scirecruitment.co.nz

Want to keep your recruitment costs under control? Get it right the first time.

Most business owners and managers will agree that recruiting the right people is one of the most important factors affecting the overall performance and success of any organisation; especially in mid to senior management roles. Poor selection decisions can cost employers hundreds of thousands of dollars per year.

Typically a hiring mistake is estimated to cost an employer 40% to 60% of the roles total annual remuneration. While most organisations in New Zealand understand the importance of recruiting and retaining top talent, many underestimate the need to be flexible when it comes to negotiating remuneration packages with their preferred candidates.

As a recruiter I am often faced with situations where employers miss out on strong candidates simply because they are unwilling to increase their offer by $5K or $10K to meet the candidate’s expectations. Occasionally candidates are unreasonable and unrealistic (and I have a story or two to tell on this subject as well), but most of the time their salary expectations reflect the current market.

Just as in the case of poor selection, lack of flexibility in the final negotiating stages of the recruitment process can be expensive. Consider the costs associated with having to go back to the market, having gone through a long and arduous selection process involving advertising, interviewing, psychometric testing and reference checking. Not to mention the additional hidden costs arising from lost opportunities (internal disruption, incomplete projects, use of other resources while the position is still vacant etc).

More importantly, organisations may miss out on ‘the proverbial ideal candidate’ for their organisation. Such outcomes can have significant implications in the short to medium term, particularly in a candidate short market, which without a doubt is starting re-emerge in a number of functional areas and industries.

Last but not least the negative impact on the brand and overall perception in the market place are intangibles that are hard to quantify but certainly come at a cost in the long term. Candidates that go through the entire recruitment process and decline an offer made to them because it does not meet their expectations, are usually frustrated with the process. They share their ‘negative experience’ with friends and colleagues, and we all know what a powerful role word of mouth can play in the job market.

Accordingly, some organisations may subsequently find it difficult to recruit and retain staff due to the perception of potential candidates in the market, that they are an inflexible employer that tends to underpay employees.

Solutions for resolving these situations

The first questions to ask is whether the candidate is over qualified or too experienced for the role. Due to the limited number of opportunities in some professional areas, particularly at senior management level, we are seeing a lot of professionals hunting for roles at a lower level. If that is the case, then the answer is simple, the candidate is clearly not right for the role and you should not get drawn into further salary negotiations.

However, if you are convinced that your preferred candidate matches your requirements in terms of qualifications, skills, experience and cultural fit then you should consider reviewing your original salary range for the role. This could be done by restructuring the whole remuneration package – for example increasing the base salary by reducing benefits or performance pay. Or even offering a higher remuneration package but ‘delaying’ the first salary review (12 months after commencement instead of 6 months for example). Or alternatively you can look at options to increasing some component of the package.

In most cases adjusting your original remuneration by as little as $5,000 to $10,000 to meet the expectations of your preferred candidate will be a more cost efficient decision than going back to the market. Experienced recruitment professionals with knowledge of the current market can play an important role in bringing the parties closer during the final negotiations.

So next time you are ready to make an offer to your preferred candidate, consider the importance of making the right recruitment decision and the cost of having to go back to the market if your offer is declined.

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Have recruitment needs at mid to senior management level? Call our team in Auckland on 962 5687 or visit our website for further contact details. When you retain SCI you get the benefits of using a recruitment company and a search firm without having to pay the premium associated with search assignments. We look forward to working with you and your organisation.

www.scirecruitment.co.nz