Australian executives question hiring despite HR spend

Recent research by SmartRecruiters has revealed that almost a third of Australian executives are uncertain about the quality of their hiring decisions, despite significant investment in talent acquisition.

The survey conducted among 500 midsize companies across the UK, US, and Australia shows that 49% of business leaders believe their talent acquisition strategies are inadequate. Of these, a quarter acknowledged that poor recruitment practices are negatively affecting their company's brand reputation.

SmartRecruiters' findings indicate that recruiting efforts are a substantial financial commitment for businesses. Globally, 63% of companies allocate at least 40% of their HR budgets to recruitment, with this figure standing at 45% in Australia. Over half of the surveyed Australian companies spend between 20% and 40% of their HR budget on acquiring talent.

In addition to the financial strain, Australian business leaders report significant time investment in recruitment processes. A quarter of them dedicate between 40% and 50% of their time to talent acquisition, which is above the global average of 21%. Furthermore, 34% of Australian leaders spend up to a third of their time on hiring tasks, compared to 16% globally.

Rich Lewis-Jones, Vice President Asia Pacific at SmartRecruiters, commented on these findings. "With nearly half of Australian companies allocating substantial portions of their HR budgets to recruitment, it's concerning that so many leaders still question their hiring decisions," he said. "These inefficiencies not only deplete valuable resources but are also clearly linked to slower business growth and a heightened risk to brand reputation."

The survey unveiled that a significant 70% of Australian respondents believe their businesses would see increased profitability with a more effective talent acquisition strategy, pointing to lost opportunities for financial growth due to current inefficiencies.

Rebecca Carr, CEO of SmartRecruiters, emphasised the importance of evolving HR practices. "The findings underscore the need for HR teams to modernise their talent acquisition strategies to better support business growth and profitability. Advanced technologies like AI are revolutionising the talent acquisition process by streamlining inefficiencies and allowing businesses to make smarter, data-driven hiring decisions," she stated.

She further added, "Leveraging AI-driven hiring platforms, businesses can enhance decision-making, significantly reduce costs, improve the quality of their hires, and ultimately drive better outcomes. In today's complex hiring landscape, leveraging AI-driven platforms isn't just an advantage—our research shows it's a necessity for business to drive growth."

The survey also highlighted the broader consequences of ineffective hiring strategies including harm to business growth, reputation, and profitability. Respondents identified damaged brand reputation (25%), weaker sales performance (25%), poor hiring decisions (24%), and inefficient allocation of time (24%) as top negative impacts.

Compounding these challenges is the increasing complexity of the hiring landscape. Sixty-four percent of Australian business leaders report that talent acquisition has become more difficult over the past five years due to factors like the rise of a global workforce, hybrid working models, and intensified competition for talent. Nearly a quarter of Australian respondents view talent acquisition as the most complex aspect of their operations.