Kia ora, this case-study about Time to Hire has been formulated to give in-depth and well-rounded opinions by various members of our team. As a result, it is considerably longer than our standard blogs. You can use the search function (CTRL + F on Windows, or CMD + F on Mac) to jump between the questions, which we’ve highlighted beneath for you!
- So why is the market so short on candidates at the moment?
- With the market being so short, does that mean candidates can be pickier with their choices?
- In this shortage in specific markets, or are you seeing it across the board?
- What impact does this wait time have on candidates?
- What’s your advice or number one message to employers around the time taking to hire?
- What services do you offer the help streamline the process for employers?
- What are your predictions for the market for the next 6 months?
In the current environment, with a candidate shortage sweeping the nation, we’re seeing a sharper incline in the volume of businesses who are taking their time to hire. These lengthy processes have, in recent years, gotten longer and longer, with more bureaucracy blocking the way to getting amazing candidates across the line and into your businesses. In some instances, candidates are waiting upwards of two to three weeks between interviews, for reference checks, and for contracts to be generated meaning that quicker businesses have time to sweep in and snatch them up. Fortunately, there are ways that you can remedy this. We’ve chatted to top recruiters Samantha Morris, Julian Greaves and Sureca Venter, from our Auckland and Wellington teams, to get their advice on how to navigate this.
Surprisingly, time to hire is not considered for the full scope of its effect. Often employers look at just the period in which they’re actively hiring, forgoing the acknowledgement that the person they’re likely to choose will have a notice period to abide by. Wellington Director Julian Greaves notes, “95% of employees in NZ have 4 week notice periods even at senior leadership level. This works as everyone (almost everyone) is on the same notice. However from resignation of an employee to running a recruitment process and allowing for 4 weeks’ notice averages 8 – 10 weeks. Therefore any employer needs to allow for a gap between the existing person leaving and the new person starting. This gap can of course be filled by a contractor and it is common for us to place a temporary person to bridge the time gap between hires.”
So why is the market so short on candidates at the moment?
SM: Immigration, plain and simple. With border closures there is no good talent coming into the country and with a lack of incentivisation for kiwis to move/retrain into the IT Industry, amongst others, we’re experiencing a significant shortage. In years past, the movement of candidates through New Zealand and across the borders meant that there was a rotating surplus of individuals qualified to work in the field.
SV: The technology market has always been tight on candidates. The reality is, we’re a small country whom punches well above their weight. We have entrepreneurs who create their own thing, gets investment funding and boom a 20-man strong company pops up literally overnight. We have Americans whom launch tech companies here, making use of our business acumen and their dollar being stronger than ours. There is our own buoyant economy – the likes of our banks, vendors, government departments etc. whom have always needed a solid supply of technical staff to keep their machines well-oiled and running. We’ve also had housing shortage issues for the best part of 10 years (more so in the past 3 years), making it difficult for technology immigrants to migrate and find suitable accommodation to house their families in. With the cost of rent rising vs salaries in NZ, it makes more sense for these professionals to try their hand at migrating to AUS, Canada or the UK first, before considering NZ.Of course, the most recent blow came as our borders closed when Covid hit. With the government not really considering technology a true ‘essential skills shortage’ at present, it could be years until we start seeing a decent migration of technology professionals to NZ again.
JG: A mix of reasons, we have had limited supply of experienced candidates since the early 2000’s, this was masked during the GFC in 2008 when the jobs dried up. The candidate market didn’t improve, there were just less roles. Now the economy is growing again the skills shortage is once again being shown up. This has been compounded by almost zero migrants entering the market. Resulting in a highly competitive market to find talent, and for employers to retain the talent they have right now.
With this market being so short, does that mean candidates can be pickier with their choices?
SM: 100% and this is something that we’re actively trying to remind employers as we work with them – candidates have multiple offers on the table – up to 4 or 5 at a time and it gives them the ability to demand more money. The company that works at the most reasonable pace and is most accommodating to the candidate will receive the best selection by being at the front of the pack.
SV: Definitely! This puts both employers and future employers under pressure to offer more. More money, more benefits, more flexibility – all adding to the company’s bottom line. Technology especially is a powerful but funny sector. As a business you won’t survive unless you keep innovating in your tech area but it’s a delicate balancing of the books to stay ahead of the game and out of the red.
JG: Candidates have more choice in this market, this is a dual edged sword for employers, in the pure sense a candidate with choice will make better decisions and pick a role for the right reasons and this is good for the employer who wins the fight for talent, but the frustration comes when say a candidate with three offers turns down two of these offers. The two employers who miss out have to go back to square one and re-enter the labour market. That is frustrating and stressful. A common situation.
Is this shortage in specific markets, or are you seeing it across the board?
SM: More technical roles such as software engineers, data engineers etc, are the roles that are hard to fill in a ‘normal’ market so in the current one, it’s much more difficult. In saying that, roles that are usually easier to fill such as Project Manager’s/Business Analysts’ etc, are becoming increasingly more difficult to source and fill as well.
SV: It seems to be across the board, but we won’t see the longevity of it until the government is able to communicate regarding their plans for re-opening the borders, and what sectors will be prioritised. The same answers will be sought for what will be done regarding the housing crisis which will have an effect on this also.
JG: The candidate shortage affects most markets. This is a long term issue not a new thing as per my initial comments above. We just don’t have enough skilled, work age people available compared to the market demand.
What’s your advice or number one message to employers around the time taking to hire?
SM: Interviews should be between 2-3 stages for perm and 1-2 for contract, depending on the role. Otherwise candidates will go elsewhere as they may have other offers on the table or won’t be able to wait. Once you have found the right person, get contracts out promptly. Have standardised templates ready to go so that you can turn these around quickly. Not only does it take a burden off your shoulders, but it makes sure the candidate doesn’t get a contract from another business who moves faster. Candidate’s situations can change in a day so CV’s need to be reviewed asap and interviews ideally set up within a few days.
SV: It comes down to being well- armed and READY before releasing a role. What is the current market paying for this particular position? Are we paying accordingly and if not, are we willing to? If not, what is the cost to our business having this role vacant vs biting the bullet and paying the higher salary/ hourly rate? If the position is important to your business, make the time to ensure you do everything you can to secure the right person. Before releasing the role, ensure you know whom needs to be involved in the recruitment process. Make sure there is at least 2 slots per week where all parties are free to be able to jump in on interviews. Have a structured plan in place for interviews. There is nothing worse than inviting a candidate for yet another interview because you were unprepared and did not ask all the relevant questions, that in fact should have been covered off in the previous interview.
JG: My number one message is to be focused on the quality and calibre of the person you are hiring. Understand the minimum experience level you could hire at and be as flexible as possible on length of experience. Years in the job and calibre are not always correlated. This is a highly candidate short market and flexibility helps. That said take time to find the right person, don’t cut corners, once you find the right person move very quickly – multiple offers are a common occurrence in this market and speed to the offer can make a difference.
What impact does this wait time have on candidates?
SM: They get disinterested and can get a negative first impression of your business. If they feel that the business isn’t as invested in the process, they’ll be less likely to seriously consider your role and they will have been contacted for another 3 roles in the meantime.
SV: In this fast-paced world we live in, everything is NOW, rather than later. Candidates have so many options, and too little time to wait on completing long, dragged out processes. They will go elsewhere to get their ‘instant gratification’.
JG: Candidates want to secure a role that meets their requirements (whatever those requirements are for that person). Once they meet their needs in a role and receive an offer they will accept immediately. Likewise if they interview somewhere and it’s not the right environment or role for them, time doesn’t matter – they won’t take the role. So time only matters if you have the role they want, you often only find this out at offer stage so it’s risky to wait to see if you are the candidates preferred option!
What services do you offer to help streamline the process for employers?
SM: Pre-screening, probity checks, reference checks and just setting everything up and negotiating with the candidate. We can set clear expectations between both candidate and client and arrange interview times. This takes a huge load off the employer as it lets you just focus on choosing the right person!
SV: Clear communication and expectations set with both candidates and clients. Recruiters time is in huge demand at present with literally EVERY company seeking staff. We cannot afford to ‘waste time’ working on roles that have long unnecessary processes, paying well below market averages or working with hiring managers who simply don’t understand that there just isn’t a bunch of good candidates to pick from. These days, it’s literally a blessing if you get a shortlist of 3 candidates from a recruitment consultant. At least you know the 2-3 candidates you get is the quality of the crop. That they were fully vetted, which makes the hiring managers job a lot easier to just get the technical match right, via the interview.
JG: The benefit of our position in the recruitment process is we track the candidates activity closely the whole way through. We can openly discuss salary requirements, reasons for moving, what they want in a new role, what kind of role and most important what other interviews they have, including the stage these have reached. That transparency is critical so we can measure the risks and timeframes on behalf of our clients. In other words we know when we can go slowly and when we have to move with urgency! This results in a huge improvement in the success to hire.
What are your predictions for the market for the next 6 months?
SM: Until the border restrictions ease, I think that it is going to be an ongoing battle to retain and employ new staff. This is why it is so important now more than ever to pay market rate, move quickly and really sell your company to candidates in the interview process. Interviews are a two way street and it’s important for employers to remember this!
SV: Our borders will still be closed, and these skills will still be in demand. Salary expectations and hourly rates will continue to remain high. The work will still be there, with urgency around getting it done.
JG: It is hard to predict what the market will look like in 6 months, but my prediction is it will be much the same as it is now, especially if unemployment remains at or around 4% (a critically low number). Covid-19 may disrupt things, or perhaps a major global event could change the direction of the unemployment curve, but all things being equal we will be working in a candidate short climate.
Want more advice? Check out our other blogs here!