The Real Cost of Poor Recruitment and the outsourcing solution


Business owners have plenty of experience when it comes to the fallout from recruitment and employment of poor-quality staff. Conversely, when we get it right, the rewards obtained from employing top-quality staff are tremendous.

All things considered, poor recruitment is a huge cost to the business. Lost productivity, wages, revenue, and the cost of re-hiring are just the start. Not to mention the impact on team culture and the clean-up costs required to fix things.  

Recent indicators suggest a bad hire can cost an incredible 20 per cent more than the annual salary of that hire.

The effective outsourcing solution

A solution to this problem is to hire your staff through a third party who can recruit and manage the performance of staff for you.

It was not so long ago that companies were using outsourced staff solely for the cost benefits obtained. Other benefits were outside the management rationale to engage staff, especially from overseas. As the Australian labour market tightens, the reasons to engage outsourced staff are changing. Now offshore outsourcing is becoming increasingly mainstream as businesses struggle to keep up with their needs for good and capable personnel.

Benefits in outsourcing

The benefits of outsourcing are not just about cost savings. Our clients are regularly reporting their leaders’ and managers’ increased focus on the company’s core business ideology, as well as more efficient and better client service. However, whether you are recruiting onshore or offshore, one thing is certain. The cost of a mistake has an expensive impact on productivity, wages, revenue, as well as the cost of re-hiring and clean-up costs.

If you are going to look at outsourced staff, you must adopt the same mindset for offshore recruitment as you do for onshore recruitment. 

Too often I find myself in conversations with potential clients discussing how ‘cheaply’ they can find their next team member. I say “team member” deliberately because my belief is that all outsourced employees should be treated just like the other members of their team…not just a bottom on a seat.

Effective outsourcing saves staffing costs

Particularly if you are strategic in how you address your staffing needs and consider the long-term growth of the company.

From my experience, when businesses recruit locally, they are clear on what a successful candidate looks like. When that ideal local candidate is found, companies are often prepared to pay a considerable amount more than originally anticipated to secure that person. This is where the two strategies of in-house staffing and outsourced staffing become diametrically opposed.

At the moment, it is easier to source and secure highly skilled and experienced staff from the Philippines compared to sourcing in the current tight labour environment here in Australia. I know this because I have been active in the Philippines labour market for the past 8 years. Companies like ours are specialists in finding and engaging suitable candidates in the Philippines for vacant roles in Australia at significantly reduced rates compared to Australia. But this does not mean we compromise on quality.  

So, how does this reduce the cost of poor recruitment?

Understanding that there are substantial savings to be made by hiring through specialised offshore providers such as Profitmaster, your evaluation to engage offshore staff should be focused on; What value does this person bring? Where do I want to take my business? and, How will this person help me get there?

We are in the business of providing quality, seamless solutions for our clients. It’s not about getting the “cheapest option for now” solution. We proudly provide our staff with the highest quality working conditions and work experiences, as well as professional development and personal growth. We hire staff for our clients based on their personal traits such as loyalty, integrity, and attitude. When you combine these with capability and skill, the result is that we hire great people. There is no doubt about it. We even guarantee it. 

If you are thinking about your next hire, get in touch with us and discuss how we may be able to assist you to find the next member of your team.