Business Maverick


The R24bn recruitment problem plaguing South African companies

The R24bn recruitment problem plaguing South African companies

As employees increasingly drive the ‘Great Resignation’ trend in search of more money and better work-life balance, companies are paying through the nose for expensive recruitment processes.

Recruitment costs can include job posting fees, CV screening, job interviews, specialist recruitment firms, background checks, the onboarding process, training costs, IT costs, salary and employee benefits, new equipment and even employee referral fees.  

According to data gathered by Remchannel from the human resources departments of 82 South African companies, high resignation rates result from employees searching for flexible work structures and personal development opportunities after the pandemic. Many are also leaving their jobs to escape toxic workplaces.

“Traditionally, South Africans resigned for better remuneration and opportunities. But the landscape has shifted. Today, people are looking for happier working environments, work-life balance, and opportunities to improve their skills and grow their careers,” says Michael Gullan, chief executive of G&G Advocacy, an eLearning consultancy.

Towards the end of last year, executive search firm HomecomingEX released a Virtual Brain Gain Trends Report which identified eight executive talent trends, including the fact that South African companies are facing a shortage of talent with hard and soft skills, with 46% of  employers experiencing difficulties when it came to filling jobs.

The high cost of resignations

According to a survey by WorkJam, two out of three managers say that millennials, who are notorious for not putting up with work environments where they are unhappy,  have the highest churn rate. The cost of losing critical staff is severe. 

In South Africa, Remchannel’s data shows that almost 40,000 employees resigned from 82 companies in the past year, and the costs associated with filling vacant positions amount to almost R24-billion.

The remote, hybrid work effect

“It’s not surprising that remote and hybrid work has increased employees’ need for new skills, mentoring and career guidance,” adds Gullan. 

“Our clients report that offering online learning that is flexible, personalised, relevant and engaging is one of the most effective ways to respond to shifting employee needs and values.” 

According to online automation company, Zapier, 61% of professionals would quit their current job for a fully remote opportunity. 

Increasingly, European countries such as Portugal, Finland, Croatia and Greece are now also offering digital nomad visas to foreigners to attract remote workers to stay and work for a period and bolster local economies.

Gullan adds that the rapid exodus of skilled professionals opting to work abroad is leaving large skills gaps. 

“Training has never been more crucial,” he said, “and it has to be agile with clear outcomes so organisations can close those gaps quickly and effectively to survive and thrive.” 

Gallup reports that 65% of employees want their training paid for by their employer and offered during work hours. And 59% of millennials say that opportunities to learn and grow are extremely important when applying for a job. BM/DM


Comments - Please in order to comment.

  • Kim van Zyl says:

    40000 resignations from 82 companies at a cost of R24 billion….. those figures are staggering when you work out the cost per employee

  • Kris Jarzebowski says:

    I’m struggling with these stated figures. This means that an average of 488 employees resign from his each company? They must be very large companies. The JSE large companies make just over 50% of the JSE which is approx 15 companies. And ….. Each new employee to be replaced would cost according to these figures R600,000. I am doubting the accuracy of these figures and suggest that the journalist has not done the homework to verify this claim.

  • Johan Buys says:

    Some of the best hires come from employers running inventive for existing staff to bring in candidates.

    – the staff receive an incentive if the candidate sticks. FAR less than an agency but VERY attractive little extra bonus for the staff.

    – staff are not stupid. They do not want to bring in a slacker that means they work harder and probably know best if the person will “fit” and how padded that CV really is. Works exceptionally well in software development and technical consulting roles plus I’d assume technical jobs like engineering, architecture, etc.

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