The R24bn recruitment problem plaguing South African companies

19 Apr 2023

As employees increasingly drive the ‘Great Resignation’ trend in search of more money and better work-life balance, companies are paying through the nose for expensive recruitment processes.

Recruitment costs can include job posting fees, CV screening, job interviews, specialist recruitment firms, background checks, the onboarding process, training costs, IT costs, salary and employee benefits, new equipment and even employee referral fees.

According to data gathered by Remchannel from the human resources departments of 82 South African companies, high resignation rates result from employees searching for flexible work structures and personal development opportunities after the pandemic. Many are also leaving their jobs to escape toxic workplaces.

“Traditionally, South Africans resigned for better remuneration and opportunities. But the landscape has shifted. Today, people are looking for happier working environments, work-life balance, and opportunities to improve their skills and grow their careers,” says Michael Gullan, chief executive of G&G Advocacy, an eLearning consultancy.

Towards the end of last year, executive search firm HomecomingEX released a Virtual Brain Gain Trends Report which identified eight executive talent trends, including the fact that South African companies are facing a shortage of talent with hard and soft skills, with 46% of employers experiencing difficulties when it came to filling jobs.

The high cost of resignations

According to a survey by WorkJam, two out of three managers say that millennials, who are notorious for not putting up with work environments where they are unhappy, have the highest churn rate. The cost of losing critical staff is severe.

In South Africa, Remchannel’s data shows that almost 40,000 employees resigned from 82 companies in the past year, and the costs associated with filling vacant positions amount to almost R24-billion.

The remote, hybrid work effect

“It’s not surprising that remote and hybrid work has increased employees’ need for new skills, mentoring and career guidance,” adds Gullan.

“Our clients report that offering online learning that is flexible, personalised, relevant and engaging is one of the most effective ways to respond to shifting employee needs and values.”

According to online automation company, Zapier, 61% of professionals would quit their current job for a fully remote opportunity.

Increasingly, European countries such as Portugal, Finland, Croatia and Greece are now also offering digital nomad visas to foreigners to attract remote workers to stay and work for a period and bolster local economies.

Gullan adds that the rapid exodus of skilled professionals opting to work abroad is leaving large skills gaps.

“Training has never been more crucial,” he said, “and it has to be agile with clear outcomes so organisations can close those gaps quickly and effectively to survive and thrive.”

Gallup reports that 65% of employees want their training paid for by their employer and offered during work hours. And 59% of millennials say that opportunities to learn and grow are extremely important when applying for a job. BM/DM

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Business Maverick

The high cost of resignations

The remote, hybrid work effect