Why it Costs so Much to Find the Right Person for the Job and All Your Other HR Questions Answered

Why it Costs so Much to Find the Right Person for the Job and All Your Other HR Answered

It’s not just about the costs, but also quality, cautions Anish Shivdasani, CEO of mobile recruitment startup, Giraffe, when asked about one of top HR challenges that SMEs face – recruitment.

Giraffe in 2014 launched a mobile recruitment app that enables businesses to recruit staff faster and cheaper. It was founded by Shivdasani together with Shafin Anwarsha, Bradley Cowie and Chetna Parbhoo.

The startup currently boasts the largest database of medium-skilled workers in South Africa. These are individuals earning between R3,000 and R15,000 per month. This includes blue collar roles like cashiers, drivers and factory workers, and also white collar roles like call centre agents, customer service agents, sales agents and junior admin staff.

Hiring needs vary greatly among the 250 000 formal SMEs that exist in the country depending on the industry and how big they are, says Shivdasani.

“But the common denominators that almost all SMEs will hire are receptionists, bookkeepers, customer support staff and sales staff.”

Recruitment does not come cheap, with traditional recruitment agencies charging 15%+ of annual salary on placement, not to mention the cost of hiring the wrong person.

To help SME owners navigate this minefield, Shivdasani shares why HR continues to be a thorn on the side for SMEs and ways to keep recruitment costs low.

The irony is that recruiting the right person is so critical for the business, yet the time, effort and energy spent on recruitment is often much less than is needed

What are some of the challenges that exist in the hiring process?

The biggest challenge is finding the right person for the job. Since SMEs don’t always have a dedicated recruitment manager, it’s often the owner or senior manager that is responsible for hiring – and that person usually doesn’t have a lot of time for recruitment.

The irony is that recruiting the right person is so critical for the business, yet the time, effort and energy spent on recruitment is often much less than is needed to get the right person on board.

The cost of hiring the wrong person is huge – wasted salary payments, performance management, disciplinary processes and CCMA disputes are things no manager wants to deal with, and amount to huge cost implications. So it’s worth taking the time and care to ensure you’re hiring the right person in the first place!

How has technology changed recruitment and training?

Previously recruitment was an entirely offline activity. Then job boards came along, followed by Linkedin. More recently, intelligent job matching platforms such as Giraffe have arrived, meaning that businesses have even more access to relevant, screened candidates that live within close proximity of their workplaces. Similarly, training was also largely offline.

But recently there has been a huge proliferation of online courses that teach almost everything, meaning that training is now more affordable and accessible for businesses than ever.

Why do you think South African businesses have been slow to adopt technology for hiring?

Many businesses have actually embraced recruitment technology. The ones that have been slow to adopt it have typically been in the manufacturing, logistics and retail sectors – which generally lag tech adoption relative to financial services and IT.

Since recruitment is very people-centric, it is one of the most counter intuitive processes to put online, hence the slowness of adoption in some sectors. However, as smartphone penetration rises, and the cellphone is becoming the primary tool for candidate engagement, businesses will have to start using technology for recruitment- whether for sourcing, screening or assessments.

What specific HR tech solutions exist for South African entrepreneurs?

Aside from job boards and Linkedin, one of the new and interesting tech recruitment solutions in our opinion (apart from Giraffe) is Offerzen – for hiring developers.

Shivdasani on the Top HR Costs for SMEs

  • Recruitment agencies – in our opinion are largely overpriced;
  • Senior manager interview time – the cost of interviewing is high, so should be kept to a minimum. Senior managers should only interview highly screened and relevant candidates;
  • Job Boards and the time used to screen through large volumes of applicants – can be time consuming and hence costly.

Shivdasani on Ways to reduce costs

  • Use employee referrals – so long as the job spec is clear, your current employees are a great source of candidates that have a good chance of fitting in with the company culture.
  • Use smarter sourcing and screening tools.
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Lebohang Thulo
Lebohang Thulo
Lebohang Thulo is the editor of SME South Africa. She enjoys keeping up with the country’s exciting and fast developing entrepreneurship ecosystem. You can find her at @lelele3