Tips for managing Recruitment Agencies during skills shortages

Most South African organisations have only just started recruiting new staff after an employment freeze for the last 18 to 24 months. Purchasing Index (PI) tells SmartProcurement that many may have been lulled into a false sense of safety that the skills base in South Africa is relatively robust.

PI has analysed data available from the Department of Education which suggests that only 4% (approximately) of school starters end up with any sort of degree (excluding trade qualifications). On top of this, many students have opted for humanities degrees, leading to acute shortages of skills such as actuaries With an education system that is failing to send a sufficient number of suitably skilled people into the workplace, it is difficult to see how the country can achieve and maintain a 6 to 7% growth rate – required to substantially reduce poverty in South Africa.

For business with employment equity targets to meet and growth to maintain, the requirement for a pool of potential recruits with the requisite skills and experience will become acute.

In a world where employers will be competing for talent, PI believes that there are many opportunities to turn organisations into employers of choice:

• Agency Rates – Negotiate from an informed position with recruitment agencies. Recruitment companies that will stay the course (and many have disappeared in the last two years), need a fair remuneration for their efforts. Beating their rates down when there are plenty of skills in the market can have a negative effect when skills are in short supply, as candidates will probably be offered first to the better payers. One of PI’s clients admitted that being aggressive on agency rates had backfired when staff turnover increased; they only got to see the “B” candidates.

• Internal Processes – Many agencies bemoan the endless delays in the recruitment process within their clients’ organisations. Taking three to four months to go through the recruitment process often sends a very unfavourable message to the candidate(s), and substantially increases the agency’s administration and costs. The recruitment supply chain needs all parties – procurement, HR, operations, candidates and agencies – to work closely together.

• Decision Making – Many organisations wait until the employee has left before deciding to advertise the position. This leads to a loss of intellectual property as the employee leaves without passing on his/her knowledge to the successor. Interviewing many organisations reveals that new employees can often take four to six months before becoming truly productive.

• Profiling – In the rush to obtain new resources little consideration is given to the requirements of the position (skills, culture and attitude) and a potential growth path. Then there is the added communication channel of getting this message across to the recruiters. Poorly considered job specifications and communications add substantially to the cost of the recruitment process. What are your internal costs of recruitment?

Over the next few years organizations will be experimenting to get the right formulae for attracting and retaining staff and PI will be benchmarking their processes, costs and initiatives. For more information on this benchmarking process, contact PI’s Karen van Staden on

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