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This is how much it costs to hire one
employee
‘As we enter the next decade, it will be more important than
ever for HR professionals to quantify and qualify their work’
BY John Hilton / 19 Nov 2019 / Share
It costs organisations a staggering $18,982 on average to hire
one employee, according to new research by ELMO Software.
The survey of over 1,500 HR professionals across ANZ found
an organisation’s average cost of hiring a new executive is
$34,440, compared to $23,059 for senior-level managers,
$17,841 for mid-level and $9,772 for entry-level positions.
Australian companies typically ¦ll vacant roles within 39.2 days
— recruitment is over one-week slower in New Zealand, with
roles ¦lled within an average of 47.2 days.
High employee churn remains a central challenge for one in six
(16%) Australian and one in ¦ve (20%) New Zealand HR
professionals — more than half (52%) of whom are working to
grow their organisation within the next year.
2020 top challenges
Looking to the next 12 months, ANZ professionals identi¦ed
leadership development (37%), culture change (34%),
upgrading technology (30%) and change management (30%)
as key organisational challenges.
When it comes to recruitment, over two-thirds (67%) of HR
professionals in New Zealand and almost half (46%) in
Australia believe there is a skills shortage within their industry.
The competition for talent in New Zealand is ripe, challenging
64% of respondents, compared to 50% in Australia.
The research also found 41% of professionals only have basic
HR metrics, and as a result, almost half (47%) struggle to
identify quanti¦able links between HR and the overarching
business goals.
Monica Watt, Chief Human Resources O¨cer at ELMO
Software, said mitigating these challenges must be a priority
for professionals.
“As we enter the next decade, it will be more important than
ever for HR professionals to quantify and qualify their work in a
tangible way to increase their in§uence at C-suite and board
levels, and weigh in on organisational decision-making,” said
Watt.
Time draining tasks
Almost three in four (74%) HR professionals identi¦ed that
general administrative tasks took too much of their time
relative to the value delivered, while on average, one in three
(33%) felt the same of recruitment and executive search.
“With recruitment a pain-point for many HR practitioners, we
were surprised to ¦nd 40% did not use any tools to improve the
process — instead they manage manually, often across
multiple spreadsheets,” said Watt.
“Technology has an integral role to play in alleviating ine¨cient,
manual processes.
“Having one platform as a single point of truth has helped me,
and can effectively support HR professionals to grow their
business and retain top talent, as opposed to wasting time on
admin and non-¦nancial number-crunching.”
Employee management watchouts
When it comes to performance management, almost half
(48%) of respondents are challenged to provide timely or
meaningful feedback. Almost two in ¦ve (39%) organisations
set unclear goals or KPIs for employees and lack personal
development plans.
Two in ¦ve (41%) HR professionals are indifferent about the
effectiveness of their rewards and recognition program, with
one-third (33%) feeling their program is ineffective or extremely
ineffective.
Despite this, almost half (49%) of HR practitioners use
tenure/work anniversaries as an opportunity to reward
employees, and two in ¦ve (40%) seek peer nominators — a
ratio that rises to half (50%) for enterprise organisations.
“Setting targets and providing feedback ultimately enables your
employees to be successful and your business to thrive,” said
Watt.
“When these targets are hit, rewarding and recognising
employees can be transformative for company culture and
employee satisfaction.
“From acknowledging when someone’s done a great job and
sharing positive feedback to gami¦ed rewards programs, we’ve
found tech can play a pivotal role in increasing employee
engagement and decreasing turnover.”
Additional insights
Employee engagement: Over one-third of companies
(35%) do not have a formal process in place to measure
employee engagement. While one-quarter (26%) of HR
professionals are planning a process, the same number
(26%) do not have senior leadership team buy-in and
almost as many (25%) are too busy or do not have the
resources to implement
Remuneration and bene¦ts: More than two in ¦ve (42%)
respondents cited a misalignment between performance
and remuneration as a key challenge, while over one-third
(35%) worried their organisation couldn’t compete with
external market rates
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