How are HR professionals responding to current recruitment challenges?

Published on 18/10/2022 by Andrew Blair

Employees are rethinking the role work plays in their lives, and the Great Resignation could transform companies’ approach to recruitment and retention. We asked 1,500 HR professionals what this means for the profession.

An HR professional recruiting online

The pandemic has caused huge shifts in the relationship between people and work. Lockdowns forced many organisations to switch to remote or hybrid working models, and many employers have continued the practice. A new appreciation of work/life balance has led to the much-discussed ‘Great Resignation’. According to Gartner, 65% of employees say the pandemic has made them rethink the place that work should have in their lives, and 60% of executive leaders described themselves as significantly concerned about employee turnover.

To understand how small to midsized enterprises (SMEs) in Australia are addressing the situation and what role HR software is playing, we surveyed more than 300 HR professionals that are actively involved in recruitment at their company. This formed part of a wider global survey conducted with nearly 1,500 HR leaders across five countries. You can scroll down to the bottom of this article for a full methodology.

HR managers are acutely aware of labour shortages

Globally, an overwhelming majority (85%) of the HR professionals we spoke to agreed that the job market is experiencing a labour shortage. In Australia, this proportion is even higher at 91%. Most (66%) of those agreeing from Australian businesses said that this began with the onset of the COVID-19 pandemic, but nearly one in five (19%) said that the shortage was already there before 2020. Others believe it didn’t occur until later, although most agree that it was already in full swing by 2022.

Pie chart indicating the start of the labour shortage.

Small and midsize enterprises in Australia are feeling the impact of this shortage across the board. Those who notice a shortage said that four areas have been hit particularly hard: HR, sales, IT, and finance. The fact that so many HR professionals believe that their department has been affected (it was the most popular response) may be a reflection of their own experience. They see first hand the difficulties of handling high workloads with reduced headcount and may be more likely to report this in the survey.

Bar chart showing company labour shortage per department.

Employee shortages affect morale, workload, and revenue

An overload of work was also reported by HR managers as a major consequence of labour shortages. When asked about the implications for their company of missing out on recruiting top talent, ‘overload of work for some employees’ came third, reported by 44% of respondents who notice labour shortages. This was just behind a drop in employee morale (47%) and expected decline in company revenue (47%).

In broad terms, respondents who perceive there is a labour shortage also say that their company’s revenue is falling short of projections by around 5–20% as a direct consequence. Only 2% did not report any drop in revenue.

Bar chart showing estimated revenue loss due to labour shortage.

How are HR managers addressing challenges with recruitment?

As well as taking HR professionals’ word that there is a problem with recruitment, we can confirm this by looking at their actions. 99% of respondents who say there is a labour shortage also say their company has taken steps to address it, with the most common being increasing salaries (seen at 47%). 46% are offering more perks and benefits, and the same proportion are also changing some aspects of the workplace such as introducing hybrid working or working from home.

Given the widespread acceptance within the HR industry that there is a problem, it is no surprise that organisations are increasing their efforts to attract candidates. However, Australian SMEs appear to favour increased salaries more than other SMEs worldwide. Globally only 40% of HR employees say that their company has done this.

Multibar chart over laying Australian actions taken to address the labour shortage with the global average of those actions

One common solution to labour shortages, and one that has been in practice long before today’s crisis, is relying on candidate referrals from within the organisation. This can massively reduce recruitment costs by avoiding listing fees on recruitment platforms or costs for recruitment agencies. It can also increase the chance that recommended candidates will be a good fit for an organisation, as they have been personally recommended by insiders. 36% of the HR professionals we surveyed in Australia say they always encourage this, and a further 50% encourage it sometimes.

Did you know? Specific referral software exists to help SMEs reduce their cost per hire. While some tools in this category are designed for sales referrals, there are packages dedicated to employee referrals, which typically include features such as referral tracking, reward distribution, and testimonial management.

Tools to help in the recruitment process

Most HR teams have adopted software to help them meet today’s challenges. 9 in 10 agreed that new technologies like artificial intelligence (AI) and chatbots are changing the way recruitment is done. 45% said they are changing all parts of the recruitment process, and another 45% said they are changing some aspects. When it comes to actual adoption, three-quarters (75%) of HR professionals that had opinions about the effects of new HR technology said their company already uses it in the recruitment process, and another 20% said they were interested in deploying such tools in the future.

Those who say their company has deployed recruitment technology say they tend to use it earlier on in the process. 77% use it to identify suitable candidates, and 76% use it to help with knowledge or personality testing. More than one-third (38%) use it later on for tasks like giving feedback to job applicants.

Did you know? HR software allows organisations to streamline, coordinate, and track their HR documentation and processes. It automates many of the common tasks involved in recruiting, retaining, and managing people, making it especially attractive for small to midsize enterprises that may not have a dedicated HR function. Among the Australian SMEs we surveyed that use new technologies in the recruitment process, almost all found them helpful (54% said ‘very helpful’, 45% said ‘somewhat helpful’).

As well as providing a database to store and manage employee details, HR software allows managers to create reports using this data and make critical decisions. Many tools also integrate with other systems such as payroll software or workforce management software to simplify the flow of data around a business.

Recruitment software is a closely related part of the HR technology toolkit. It helps companies post jobs on a variety of platforms, compare candidates during the recruitment process, and manage the interview process to make it fairer, more data-driven, and more streamlined across the business.

These tools are developing fast. They make increasing use of artificial intelligence (AI) to evaluate candidates more fairly, for example. Cloud deployments are also common, meaning companies don’t have to worry about running their own servers to host their HR software. Employees can access the tools from their phone or browser to request time off, update their details, and complete other common tasks.

Anyone who’s looked for a job in the last 15 years or so will be aware that the search usually begins online. We conducted this survey in five countries, and the most popular recruitment platform used by the companies of HR professionals surveyed in Australia was also the most popular globally: LinkedIn. This came out on top everywhere except Germany, where it came second behind other social media platforms in general.

Bar chart showing primary online platforms usually used for recruitment. 

Among the surveyed SMEs in Australia, two other platforms stood out as being popular. Adzuna is the primary platform at around one-quarter of businesses (25%), while more than one in five (22%) favour JobSearch.

Flexible hours more important than salary when attracting candidates

Although HR professionals believe that a competitive salary package is important for candidates when applying for jobs, they believe that flexible working hours and the ability to develop new skills are a bigger draw.

Bar chart ranking important factors recruiters perceive for job candidates. 

When asked to pick the top three factors that they think candidates value, 34% chose competitive compensation, 34% chose skills development, and 35% chose flexible working hours. The fact that responses were fairly evenly spread across many options —including compensation, company culture, and work/life balance— suggests that what is important varies according to the role, the industry, and the business itself. In part two of this survey, we will explore whether candidates feel the same way when looking for a new job.

Most employees in our survey say their company includes salaries in job descriptions— at least some of the time. 47% say they always do, while 45% do so sometimes. This, they say, is for several reasons. The most common is so that candidates are well informed when applying (65%), while 58% say that including the information attracts candidates, and 58% again say they do it in order to make the recruitment process fair to candidates.

When asked why they do not include salary information, SMEs tend to cite internal privacy first. 52% of those who say their company does not share salary information in job descriptions say it is because they don’t want other employees knowing what new hires will be offered. However, only 12% say they want to protect salary information from other companies.

In summary

  • HR managers at Australian SMEs widely acknowledge current labour shortages and see its effects on morale, workload, and revenue.
  • Increasing salaries for open roles is the most common response to the shortage, and many other tactics are in place.
  • Specialist software is widely used and valued by HR professionals.
  • HR managers believe that flexible working hours are the most decisive factor in attracting talent, but compensation and the opportunity to build skills are also important.
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Methodology

To collect this data, we conducted an online survey in September 2022 in the following countries: Australia (312), Brazil (306), Germany (293), France (286), and the UK (286). The 1,483 candidates had to fulfil the following criteria:

  • Full or part-time HR employee (CHRO, vice president of HR, HR director, HR manager, HR manager, HR generalist, HR associate, or HR specialist) who are involved in tasks related to recruiting people for their companies
  • Work for a company with more than two employees and less than 250
  • Above the age of 18

NOTE: The applications mentioned in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources to be reliable at the time of publication.

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.

About the author

Andrew is a Content Analyst for Software Advice, giving SMEs insights into tech, software and business trends. Interest in entrepreneurship, furthering projects and startups.

Andrew is a Content Analyst for Software Advice, giving SMEs insights into tech, software and business trends. Interest in entrepreneurship, furthering projects and startups.