Recruiting a new employee can be an exciting decision, though choosing the wrong person can be more costly than the recruitment in the first place. As one of the biggest hidden or ‘soft’ costs of recruiting, it is also one of the least considered with employers often blaming the candidate rather than their own processes.

On top of other hidden hiring costs like training, supervisory costs and a loss of productivity which can accumulate to over $5k per new staff member, employers must also be aware that making the wrong recruitment decision can double if not triple these already expensive figures.

Employment Office Sales Director Susanne Mather said that the costs of a bad hire can almost always be placed at the foot of the employer or recruiter, rather than the ‘bad hire’ themselves.

“Making the wrong decision usually comes from not recruiting comprehensively enough to begin with,” she said.

“When people aren’t using enough resources to find the right people, they’re making a decision that’s not the best choice possible from a candidate pool that isn’t ideal.”

The costs of hiring the wrong person stretches far beyond merely the cost of readvertising and in the long term can be have one of the biggest influences on organisation profitability.

“Employers need to remember that continual bad hires can result in a lowered morale throughout the entire business from revolving door situations, not to mention damaged relationships with clients and suppliers,” Mather said.

Mather said that she speaks not only from professional experience, but also personal experience when it comes trying to find the right people for her business.

“Sales candidates have been harder to find in the past than they are now, and back then we unfortunately made the mistake of under-resourcing the recruitment of these sales people,” she said.
“The result was hiring people that now days we would never have even considered, and in hindsight in many cases employers can save money by not making a hire at all.”

“On the occasion when there are zero hires from one of our Group Assessment Days, we don’t view it as a waste of time, but rather take the positive view that without this more stringent interviewing and assessment process we may have hired people who we may have regretted down the track,” Mather said.

Any new employee should also have a greater responsibility than their predecessor, with the need to ‘hire-up’ becoming essential for growing businesses, as not only should the new hire do what the old person did, but also be able to add long term value to an organisation.

“The best way to ensure this is have great recruitment systems, enough marketing deployed with expertise and a proven interviewing and shortlisting system that is preferably run by a designated third party to ensure it remains unbiased,” Mather said.

“Lost wages and no return in investment not to mention the additional time and training of a bad hire can really add up to a hefty cost,” she said, “it’s better to resource your recruitment properly in the first place as it will no doubt save you money in the long run.”

Pre-employment testing is being brought back into public discussion after it was announced that Australian resources and construction companies may soon extend drug testing to their office based staff as employers move towards more egalitarian style workplaces.

Employers often use behavioural testing and other selection procedures to screen applicants for hire, and the types of tests and selection procedures vary, and can include cognitive tests, personality tests, skills tests, medical examinations, credit checks, and background checks.

Depending on the type of test, employment testing can be conducted either online or in the employer’s office, with pre-employment screening services aimed at determining which applicants are legitimately qualified and fit for the advertised role from those who are not up to task.

Pre-employment checks are often used by employers as a means of objectively evaluating a job candidate’s qualifications, character, fitness, and to identify potential hiring risks for safety and security reasons. As such, risk minimisation is one of the most common reasons for organisations to begin drug and alcohol testing.

Different companies will have different requirements for their employee drug testing program. Options can include pre-employment drug testing, random drug testing, for cause drug testing, post-incident drug testing, target drug testing, annual physical drug testing, pre-promotion drug testing, treatment follow up drug testing and return to work drug testing. However, should it be conducted on office workers?

Managing Director of Employment Office, Tudor Marsden- Huggins, said there was a growing trend towards employers moving to a ‘one size fits all’ approach to ensure all staff were treated equally. “Many employers are questioning whether it’s fair to have one rule for some staff and a different one for others,” Mr Marsden-Huggins said.

“What this means is that everyone from miners and construction workers in high risk areas right through to secretaries and finance staff in generally safer roles at some organisations may have to undergo random drug testing,” he said.
Mr Marsden-Huggins said the issue was causing headaches for human resources staff as they balanced their employee’s right to privacy with the desire to create an equal workplace.

“Whilst drug testing in high risk roles is accepted as necessary for health and safety reasons, I expect some office workers may question if it is justified for their particular position such as those working behind a computer all day,” Mr Marsden-Huggins said.

“Unfortunately drug use is a problem in Australia and HR departments must tread carefully to balance the right to privacy with creating healthy, happy and productive workforces,” Mr Marsden- Huggins said.

Ultimately though, pre-employment testing such as drug testing will increase the likelihood of you securing supreme quality, skills-matched candidates that are going to be an idyllic culture fit and enduring assets – saving you time and money long term.

LinkedIn has become a phenomenon for professional networking, with over 100 million users worldwide and over 2 million users in Australia alone.  Used as a key business resource for not only strengthening relationships, but also for recruitment, it’s no surprise that staff are also attracted by the opportunity to build their career profile and open themselves up to  new opportunities.

Many business leaders are surprised to discover the vast majority of LinkedIn’s revenue is derived from recruitment agencies that pay for premium access to search for candidates – which could include your organisation’s key people.

So while LinkedIn gives you the opportunity to search for the perfect candidate for your vacancy, what about the flip side – when you lose a valued employee to a competitor as a result of headhunting on LinkedIn?

Head-hunters skilled in social media can now search by company, job title, university and a host of other criteria according the human resources requirements of their clients.

A recent Employment Office survey revealed that 83% of workers are open to receiving potential job offers via LinkedIn, however only 29% had actually been approached by rival companies.  This figure is on the rise though, as LinkedIn becomes a key element of an employer’s recruitment arsenal.

Employers need to be realistic about the risks that social media platforms like LinkedIn pose to their talent pool, however there are steps that can be taken to minimise the potential damage: 

• Accept that some employees will leave, and in fact some attrition is healthy.  If the attrition rate is starting to hurt the bottom line, you may need to analyse the reasons employees are moving on.
• Review your employer value proposition and retention strategies to ensure you are providing employment packages that are competitive.  Don’t limit the analysis to salary – more employees than ever are judging organisations on their work/life balance offering, corporate philanthropy programs and employee benefit schemes.
• Evaluate your company’s talent management system to ensure staff are engaged and the potential of future leaders is properly developed.
• Have a look at when employees leave as much as why.  If people are leaving within a few months of joining your company, there may be an underlying recruitment issue that’s attracting the wrong candidates.
• Communicate openly with employees if head-hunters are pursuing your team.  Let employees know you are aware of the situation, and that it’s likely because your company are industry leaders.  Create an environment where staff can raise any concerns they may have about their role, in order to maximise job satisfaction and quell any disharmony.
• Establish a company policy for employees using LinkedIn.  Our survey discovered that only 20% of companies do this.  Guidelines outlining the company information that can and cannot be disclosed through an online profile can help mitigate some of the risks associated with online headhunting, not to mention protecting the company’s online reputation and branding

With over 135 million users worldwide, and just over 2 million of those users based in Australia, it’s hard to deny that LinkedIn is making its mark in the social media landscape.  In fact, more than one professional per second signs up to LinkedIn.

But are companies using LinkedIn to its full advantage?  How can companies benefit from accessing the large numbers of potential employees contactable through the LinkedIn network?

Employment Office Managing Director Tudor Marsden-Huggins says LinkedIn is a powerful tool that, coupled with the right recruitment marketing solution, can save companies thousands on expensive head-hunting campaigns.

“Most businesses default to listing jobs on job seeker websites, however LinkedIn opens up a talent pool of professionals in the market who may not be looking for jobs, but are open to a discussion,” he said.

At present, the lion’s share of LinkedIn’s profit comes from recruiters who purchase access to user details as a means of recruitment and headhunting.

“Professional recruiters have recognised the potential and are already head-hunting through LinkedIn.  There’s no reason why management from hiring companies can’t do the same thing,” Marsden-Huggins said.

With an average of 54% of people having an active LinkedIn profile and 83% of these professionals open to potential job offers, using social media avenues like LinkedIn for recruitment is quickly becoming a must for all businesses.

Marsden Huggins says LinkedIn has changed the game for head-hunters, and they are being forced to adapt to a new environment where DIY head-hunting is not only an option for companies, it’s the future.

“LinkedIn is one of the best innovations since the rolodex, but just like a rolodex, it is only as good as the relationships with the contacts in it and the skill of the person driving those relationships,” he said.

Employment Office’s Top Tips for using LinkedIn for DIY Headhunting:

1. Searching for candidates always starts with the LinkedIn Advanced People Search – Cast the net widely and experiment using territory, industry, company names and keywords.
2. Contact your potential candidates – If you aren’t connected directly, you may choose to ask for a ‘warm introduction’ from a mutual connection.
3. Try increasing indirect connections to target candidates – Connect with people in the same industry or geographic location to help provide new introductions to top candidates.
4. Join LinkedIn Groups and get involved in online networking.

For more information on how Employment Office can help with LinkedIn head-hunting and recruitment, please fill out the form below or call 1300 366 573

Would you hire a mature age employee to work in your business? What if there was a $1,000 bonus on the line? In just a few months, employers will be offered just that.

The Federal Government has responded to a growing trend of discrimination against mature age job seekers with a new scheme aimed at rewarding businesses that employ older workers.

Under the Jobs Bonus scheme, which will begin in July, employers will be paid $1,000 if they take on a worker aged 50 or older for at least three months.

Employment Office Managing Director Tudor Marsden Huggins says that in the wake of the global financial crisis, it’s no wonder more baby boomers joining the ranks of job seekers.

“One of the major casualties of the GFC was superannuation funds.  Fuelled by unstable share markets, the super balances of many soon-to-be retirees were slashed by tens of thousands of dollars, making a return to work the only option for baby boomers wishing to self-fund their twilight years,” he said.

But an increasing number of mature age job seekers have found it near impossible to land a job.  Baby boomers are finding that, although experienced and often skilled, they are losing out when competing with younger candidates for a role, often experiencing widespread age discrimination.

According to a recent study conducted by the Diversity Council of Australia, age discrimination is the most common form of workplace discrimination, eclipsing gender and race discrimination.

Marsden-Huggins says considering Australia’s deepening skills shortage, now is a good time employers to break down any barriers to workforce participation, and utilise the skills of mature age workers.

“More than ever it is important for candidates to be assessed on their skills and experience, rather than age.  There are a lot of inaccurate stereotypes, and there seems to be a sentiment among some employers that mature-age employees can be inflexible, hard to train or lacking in computer skills.

“In reality, baby boomers often represent an experienced, hard-working and productive talent pool, with low absenteeism, strong loyalty and a good work ethic,” he said.

Older workers can be assets to companies in more ways than one, with many employers finding they often excel in mentoring and coaching roles.  Mature age workers are also highly valuable for employers operating in cross-generational markets.

“To ensure they are not discriminating against mature age workers, organisations need to evaluate their recruitment methods, as well as their retention strategies and development processes.  Offering flexible working arrangements, opportunities for training and education and fostering a culture that is inclusive and supportive of older workers is also important.

“More than anything, it’s about changing the way we think about older people, and the contribution they can make in the workplace,” Marsden-Huggins said.