Get your hiring strategy right in 2017
As a growing real estate agency with five offices in Perth, Davey Real Estate brings on 10 to 15 new hires every year. General Manager Andrew Davey is first to admit they don’t always get it right.
“Like any service-based business, people are our biggest asset, and our biggest cost. It’s vital to get hiring right – but while we have wins there are the occasional misses.”
He says it’s more important to get the right attitude, rather than focus on ability.
“It’s difficult to interview for culture and mindset, but if we believe they’ll fit in and believe in what we stand for, then they’re in – we can work with them to get their skills up if we need to.”
With the cost of a poor hiring decision estimated at around one and a half to two times that person’s salary1, many business owners are taking their time to make the right decision. A recent report revealed that globally, the average time it takes to fill a position has increased by 50% since 20102.
But while it’s important not to rush such an important decision, having an open position for months on end can also have a negative impact on staff productivity and morale.
New channels to find your perfect match
While small business owners also believe hiring is expensive, according to a 2016 study by Michael Page3, there are many different ways to connect with your ideal candidates.
“We’ve tried just about everything,” says Davey. “We had an internal recruiter for a while. We find social channels are really effective, especially for finding a short-term hire or contractor. LinkedIn is good, but Facebook has also given us some great results.”
Davey also knows the value of getting a candidate referral from within his own team. “We give staff a recruitment bonus, based on the performance of the person they’ve brought in.”
The true value of the right hire
Davey says he’s experienced the cost of a poor hire more often than he’d like.
“It’s more likely to be in the property management side of our business, as the demanding KPIs we set for sales tend to filter out performance quite quickly. Unfortunately though, it can take longer to realise a Property Manager is damaging your reputation.”
He says that while they may have looked good on paper – the right skills and level of experience – they might cut corners, won’t carry out inspections properly or fail to follow up on complaints. “That can cause problems later for us, which can taint our reputation.”
The time it actually takes to find the right person is only one small part of the total cost of a poor hire. For small businesses in Australia, 35 hours of recruitment time is average – almost a full working week3. On top of that, there’s also the time spent onboarding and training them - it’s wasted salary if they are unproductive, and it impacts the rest of the team and our clients.
It’s not surprising then, that many companies – including Davey – are looking at alternative ways to fill gaps in the staffing.
The outsourcing option
“We’ve outsourced all our bookkeeping, trust accounting, HR and marketing to AdminHQ,” explains Davey. “When we open up a new office, the biggest challenge isn't sales. It's making sure all the back office admin is done correctly. Super is paid on time, trust accounting is compliant.”
“Outsourcing it to a professional team who understand the legal requirements means we get consistency across all our offices – and our sales people can just focus on what they do best.”
He says he’s certain it’s ‘saved his business’ many times. “It's a safety net for us. If someone makes a mistake with the trust accounts for example, they’ll pick it up straight away.”
And while the outsourced cost may not look that different to the cost of an in-house salary, he’s confident it also saves him on training, technology and a physical desk.
Outsourcing key tasks also helps Davey flex his workforce up and down to meet cyclical demand.
“If we add a lot of new properties to our rent roll, we may initially outsource some of the inspections and reporting to a trusted provider to spread the load. Then if we’re confident we have enough new properties to make it sustainable, we’ll bring another manager on board.”
His sales team also use their own Virtual Assistant to help with database management, call backs and property marketing.
“Offshore processing is also high on our agenda, to lower costs and improve efficiencies,” Davey says. He’s keeping an eye on emerging disruptions in the industry – such as online auctions – and knows keeping administration costs low will be a competitive advantage.
In Australia, 57% of medium business owners and 39% of small business owners plan to get new staff on board in 20174. Davey is one of those planning to recruit.
“We’re cautiously looking to grow again in the next 12 months. There are signs of recovery in WA. So we’ll need to grow our small sales team, and all these staffing channels will help to support that.”