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Why we need to help SMEs see value in recruitment

There are many small- to medium-sized businesses, that take on the task of recruiting in-house because they believe they are too small to engage a professional recruitment agency and that they will save money by doing it themselves.

At the end of June 2017, there were 2,238,299 actively trading businesses in Australia with the vast majority (98 per cent) of them recording an annual turnover of less than $2 million, according to the Australian Bureau of Statistics.

Small budgets mean many have to find cost-savings at every possible turn. And for many small to medium businesses, an obvious place to start is by keeping recruiting in-house.

However, to call this a false economy in many cases would be a gross understatement.

Recruitment fees based on a percentage of gross remuneration can range anywhere from $5,000 to $15,000 and in some cases, can actually exceed this.

A chunk of revenue like that from a SME can be a body-blow, particularly if cash flow is scarce and cumbersome. It also seems completely counter-intuitive for many small- and medium-sized businesses to borrow money to fund recruiting; unless they understand its true value.


The job of recruiters is pretty simple: place a couple of job ads, run CVs through an algorithm, interview a few people and find a good fit for the client, right?

It’s easy to understand why this is the perception of what recruiters do, however the fact is when done well, the job is much more complex than that. Good recruiters take the time to get to know their clients and their business. They learn not just what technical and formal skills and qualifications a candidate has, but are also able to pick up on small cues that inform a recruiter of how well a candidate would fit with a client’s company.

Skilled recruiters can see past what is on the CV and will often give consideration to a candidate from another sector which others may overlook because of a lack of industry-specific experience. Talented recruiters also understand what skills their clients need in a candidate that they themselves may not understand.

And not least of all, the work recruiters do takes a lot of time. Job ads are not worded off-handedly but instead crafted to attract the right clients; professional recruiters have access to a range of software and testing tools, which a small to medium business outside of recruitment wouldn’t even know exists, and finding candidates is their only job.


Sure, there are many benefits to hiring a recruitment professional, but what about the cost? This is a question I hear regularly from small to medium businesses. It’s a fair question because the costs can indeed seem prohibitive.

Fortunately, with the advent of pay later options such as APay, businesses which would otherwise struggle to find the money to pay for a recruiter are now able to spread the cash flow commitment over a period of time.

This allows the client to receive the service and employee they need, the candidate to get the job and the recruitment agency to receive their fee in full without putting undue financial pressure on the client. Good recruiters pay for themselves, and often sooner rather than later. Think of the cost that goes into onboarding a new staff member and training them.

Any false starts with the wrong candidates sourced in-house are going to be costly both in terms of time and money and by the time businesses realise their cost saving has become a cash blowout, it is often too late to recoup losses.

This is when the investment in a recruitment agency proves to be a smart move.

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