Author: Helen Horn
Unemployment in New Zealand is forecast to soar back to levels last seen in September 2020 and top those across the Asia-Pacific region in 2025, according to a new report by S&P Global.
The US ratings agency’s latest Asia-Pacific economic outlook has New Zealand’s unemployment rate forecast to rise from the 4.8 percent recorded in the quarter to September 2024 to 5.3 percent as a year average in 2025 – 0.1 percent higher than official forecasts by both Treasury and the Reserve Bank.
This places New Zealand’s forecast unemployment rate as the highest across the Asia-Pacific for 2025, equal with China and 0.9 points higher than Australia¹.
Given this context, prospective employers could rightfully feel they are ‘spoiled for choice’ when looking for new hires. It is risky however to conflate quantity and quality; a big pool does not mean the risk of a bad hire is mitigated.
Now is not the time to trust your gut or rely on pseudo-scientific tools. Role, team and organisational fit remains a complex assessment and prediction equation. The cost of a bad hire can silently drain your organisation's resources, potentially costing up to 150% of an employee's annual salary. Understanding the true impact of recruitment decisions isn't just smart—it's essential for sustainable growth and success, which is only an economic cycle away… A positive sign is that the final quarter of 2024 saw an increase in business confidence.
In 2021, the US Dept of Labor estimated a bad hire costs the organisation 30 – 150% of the employees annual salary.
Think about that… Aotearoa’s average advertised salary in the third quarter of 2024 was $72,815. If we add 30% of that salary, the potential cost of a bad hire is $21,845. If we add 150% that cost to the organisation lifts to $109,223. The higher the salary, the more eye watering that number gets.
My experience tells me that the real cost is often higher. Think about some of the less immediately quantifiable impacts (but incredibly important) as well as the readily quantifiable ones, e.g.:
When the future of your team, function, capability, or business is dependent on your hiring decision, who do you want leading your growth?
There is nothing more certain than change. After an economic period of restraint and cost cutting, there will be growth. Soon we’ll see more people moving between roles and organisations, and organisations will actively look to add people to deliver innovation and growth. Making the most such market shifts is reliant on having the right people. Hiring after a period of restraint is an investment in the future. Successful growth depends on the quality of your hiring decision.
What information are you using to inform your hiring decisions?
Increasing your ability to accurately select an exceptional hire
Far too often we see hiring managers rely on assessment tools with little predictive ability. People radically overestimate their ability to accurately predict performance from the most commonly used tool; unstructured interviews. There’s a strong body of evidence that the link between unstructured interviews and job performance is poor. ¹
So what works.. and is also cost effective? There’s broad consensus in research that Big Five Personality assessments are the most robust and valid personality measure for predicting behaviour in the workplace. They are linked for example, to higher levels of work performance, job satisfaction, and reduced turnover.
Leveraging Big Five Personality Assessments in selection provides objective data that reduces bias and improves prediction accuracy. They increase your ability to hire well, externally and identify your internal talent.
What latent talent do you have in your organisation? Who has real potential, that has not had the opportunity to demonstrate it yet? Personality tools are effective in diversifying your leadership, uncovering those who can effectively step up, if they are given the opportunity to do so.
Why wouldn’t you use big five personality tools to invest in your future growth?
If you’re interested in finding out more, elevate your hiring process with Winsborough's expert selection solutions. We offer:
- Full-service selection: Comprehensive support to ensure you make outstanding hiring decisions.
- Self-service access: High-quality personality assessments at your fingertips.
¹https://newsroom.co.nz/2024/12/02/unemployment-to-hit-pandemic-level-highs-in-2025/
²E.g., Schmidt, Oh, & Schaffer (2016); Sackett, Zhang, Berry & Lievens (2021)
Image credit: Anunay Mahajan (Unsplash.com)
Need more information? Contact the Winsborough Team:
winsborough.co.nz | 0800 222 061 | support@winsborough.co.nz