7 Jun 2022

Tight labour market leads to $10,000 finder's fees, large sign-on bonuses

7:21 pm on 7 June 2022

Companies grappling with labour shortages and discerning job seekers are turning to hefty cash incentives to recruit staff - offering several-thousand dollar sign on bonuses or finders fees.

Recruiters say employers facing the "perfect storm" of wage inflation, increased overheads and talent shortages are getting increasingly innovative to catch the attention of potential candidates.

At the law firm Simpson Grierson, staff now get a $10,000 reward if they find a new lawyer for the firm, who stays on for at least six months.

The finder's fee was doubled late last year to help the company scout out new talent.

People & Culture director Jo Stevenson acknowledged a "tight labour market" was a key driver, with the country's unemployment rate at a record low of 3.2 percent.

"My team in particular have had to look outside the box a little bit and be a bit more creative in how we can attract people into the business," she said.

She explained the pandemic had also made prospective employees more picky.

"People are becoming more discerning about their employment choices and they're wanting to move to a place because it's got the right culture, and the right level of flexibility," she said.

"While recruiters do a great job, people are putting a lot more stock and value in the word of somebody who has actually worked in the organisation itself and can speak to the culture."

The offer, which is part of a program the firm calls Star Search, seemed to be working.

Of the six legal hires the company made between January and May, four were referrals from existing employees.

Comparatively, Stevenson said just one of the 11 hires last year was through Star Search.

Recruiters said they were seeing increasingly large finder's fees on offer across all sorts of sectors.

Onestaff chief executive Jon Ives said in the construction industry, companies were looking for any way that they could get the skill and resource they desperately needed.

Finder's fees were a way to target what he called the passive market - "people that might be open to changing their workplace but aren't necessarily out in the market looking for work. So if an offer comes past, then they'll take a look at it".

Big lump sum sign-on bonuses are also increasingly being offered to those looking for a job.

A search of TradeMe Jobs shows nearly 200 active listings offering at least $500 to the successful applicant, including jobs for nurses, cleaners, hairdressers and tradies.

One of the ads is for experienced plumbers, drainlayers and service people at Laser Plumbing in Hamilton, with up to $5500 offered as a sign on bonus.

The company's managing director, Brad Kells, wanted to offer a better deal than the competition.

"There's been some other opposition, plumbers in our area, who had been offering up to 5K. I guess when you're trying to get ahead of the pack, get noticed, we thought we'd just mention five and a half and it might get people to give us a call," he said.

Dunedin's Platinum Recruitment director Dean Delaney said employers were facing the perfect storm of wage inflation, increased overheads and talent shortages.

He said companies were finding sign-on offers a better use of their money, than widespread job advertising.

His clients were reporting very little interest in their job ads.

"A lot of people are not looking in this current market because they're worried about job security, so companies are looking at more innovative ways to attract talent," he said.

There could be plenty more of these kinds of offers in coming weeks - the market is expected to stay tilted in favour of job seekers for the foreseeable future, with treasury forecasting unemployment to fall below 3 percent.

The market was the most competitive that Brad Gatehouse from Tribe Recruitment had seen in the past 22 years - "and by quite a long shot."

He told Checkpoint it was probably 10 times worse now than before the last Global Financial Crisis.

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