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The Government in New Zealand wants to cut the amount it spends on employment agencies, something which could lead to substantial saving of around AUS $69 million, the National Business Review writes.
Currently, the Government spends around AUS $230 million a year on recruitment agencies and the Ministry of Economic Development wants to axe 30% of these costs, the paper claims.
But recruitment firms in the country are already struggling to make ends meet as unemployment has crept up in recent years. “That has seen the local arms of agencies report successive losses since the global financial crisis in 2008 on dwindling revenues,” the paper reports. Hudson Global Resources NZ is amongst the firms that have seen no profits since 2007 while Rubicor Group, one of the largest temporary recruitment firms in Australia and New Zealand, has also been reporting losses.
The government has been on a mission to lower public sector costs and has already made savings by introducing a cross-agency procurement process for its external legal advice, international and domestic air travel, and office equipment and passenger vehicles.