by Optimum
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by Optimum
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Many businesses finalise their FY27 hiring plans somewhere between Easter and June, whilst others don’t plan recruitment activity ahead of time at all.
This isn’t an article about urgency. It’s about the cost of reactive hiring versus planned hiring, and what business owners, finance and HR leaders can do right now to make FY27 go better than FY26.
The planning gap most budgets don’t account for
When a senior role needs to be filled, most businesses think of recruitment as a task that starts when someone resigns or a need becomes urgent. In practice, by the time that happens, the budget is already under pressure from multiple directions at once.
First, the salary line. Most FY27 budgets are built off FY26 salary tables. The 1 July annual wage reset, driven by the Fair Work Commission’s Annual Wage Review, along with the mid-year launch of industry benchmarks such as that from Hays, typically moves professional salaries 2 to 4 percent. Tight-skill segments like cyber, data, healthcare leadership, and engineering have run higher, sometimes 4 to 6 percent. Every senior role budgeted at FY26 rates and hired in August is already slightly under-cooked before the first day.
On a $180,000 role, a 3 percent benchmark movement adds $5,400 to the annual cost base. Across a 3.2-year average tenure, and including superannuation, the cumulative difference is approximately $19,400 per role. Across a plan with six senior hires, that’s over $115,000 in unbudgeted cost.
The remedy is straightforward: before FY27 budgets close, run two salary scenarios, one at FY26 rates, one at FY26 rates plus 3-4 percent. Show the delta to the leadership team. It’s a 30-minute exercise that turns a budget assumption into a budget decision.
The internal talent question that often gets overlooked
The second planning gap is the one that costs the most and gets discussed the least: internal promotion.
When a senior role opens, most businesses instinctively look outward. A search begins, and three months later someone new joins at market rate. The person who was the obvious internal candidate for that role either wasn’t considered, wasn’t ready, or wasn’t developed with that role in mind.
Planned succession isn’t just an HR concept. It’s a cost-base lever. An internal promotion at a modest uplift almost always costs less than an external hire at full market, and the productivity curve – the time it takes a person to be genuinely effective in a role – is shorter by months, not weeks.
The businesses that manage this well don’t wait for a vacancy to have the conversation. They map the two or three roles most likely to turn over in the next 12 to 18 months, identify the internal candidates closest to ready, and build a deliberate development path. It doesn’t require a formal succession planning program. It requires a quarterly conversation between HR and the relevant business leader.
The question worth asking now
Which of your likely FY27 vacancies could be filled internally if you started the development work today?
Why reactive hiring is more expensive than it looks
When recruitment happens reactively (a resignation triggers a search, a search takes 6 to 10 weeks, a hire gets onboarded over another 4 to 8 weeks) the visible cost is the recruitment fee. The invisible costs are usually larger.
Lost productivity during the vacancy. The senior team member who covers the role informally and gets stretched. The onboarding drag that sits with a manager for months. The retention risk that rises when the team notices the vacancy went unfilled for too long. None of these show up on a recruitment invoice. All of them show up eventually, in performance, in attrition, or in the next budget cycle.
Planned recruitment compresses all of that. A business that identifies its likely FY27 vacancies in June, engages a recruiter with a proper brief, and has a talent pipeline partly built before the role is formally open will typically fill it in less time and at lower total cost than one starting from scratch in October.
What to do before 1 July
There are three practical things business owners, finance and HR leaders can do in the next four weeks to set FY27 up better.
Develop a hiring budget…
if already done, apply a salary-reset scenario to your FY27 hiring budget. Add a column at FY26 rates plus 3–4% for every planned new hire.
Map your likely FY27 vacancies.
Not the approved headcount, but the realistic picture. Which roles are likely to turn over? Which are likely to be created as the business grows? Which of those have internal candidates worth developing?
Have the internal promotion conversation now.
For any role that could be filled internally in the next 12 months, ask what the candidate needs to be ready. A structured conversation in June is worth six months of reactive scramble later.
The longer pattern
For organisations operating under an Australian financial year end timetable, 1 July is usually a trigger for increased remuneration, increasing your cost base. Planning your recruitment like you plan your capital spend will help you outperform those who are purely reactive.
Ben Walsh, National General Manager – Recruitment
If you’d like to talk through your FY27 hiring strategy (market rates for key roles, how to structure an internal talent conversation, or talent pipelining) contact us through www.ogroup.com.au or call 1300 288 400.
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