Hiring mistakes are costly in all companies, but in SMEs where teams tend to be more stretched the consequences can be further reaching.
Jay Z’s troubled Tidal Streaming service has been left in a state of chaos, as it recently fired its second CEO after just three months. Hiring mistakes are costly in all companies, but in SMEs where teams tend to be more stretched the consequences can be further reaching.
Employing the wrong person costs a typical small business nearly £14,000, and nationally SMEs waste around £62 million a year on poor recruitment decisions. With a persistent skills gap affecting SME growth, it’s clear that many struggle to hire the right talent.
So what’s preventing SMEs from recruiting the right people?
- SMEs are recruiting from a smaller talent pool. Their employer branding and salary and benefits packages are unlikely to match larger corporates. So SMEs can be overlooked by stronger candidates, despite offering clear opportunities for growth and development. While these are issues associated with branding and better communicating the career benefits, more could be done to ensure SMEs choose the best talent, albeit from a more limited pool.
- Many SMEs don’t have dedicated or outsourced HR staff, but interviewing is a key skill in itself which requires specialist knowledge. If SME owners don’t ask the right questions, they won’t identify the best candidates.
- When pressure to recruit for an overstretched team is high it’s easy to rush the interview process and 11% of SMEs admit to doing so. Investing in a robust interview process costs less in the long term than hiring the wrong person.
While some of these barriers are outside an SME owner’s control, by following these top tips they can make better hiring decisions:
1. Identify your culture
What makes your culture unique? Is it the commitment to personal development, the collaboration between staff and/or the work-life balance? Job descriptions and recruitment marketing materials (LinkedIn, company videos) should clearly demonstrate your culture. This will attract candidates who identify with and buy into your values, and these employees go the extra mile.
2. Recruit for attitude and behaviours
Too many SMEs recruit for skills first, but the right attitude and behaviours are difficult to teach. If these are wrong, it can be particularly harmful in SMEs which by their nature involve small teams working together. Identifying these attributes is not an exact science, and where SMEs lack the time or know-how in-house they should bring in external recruiters. By reducing the time spent sifting through potential candidates, SME owners can focus on candidate assessment.
3. Don’t just use interviews
Assessment centres aren’t just for big companies, and adopting a similar approach in SMEs can reduce costs. An assessment centre is a great way to get all candidates in the same room on one day, rather than carrying out multiple one-to-one interviews. It gives candidates the chance to demonstrate their skills in work-related scenarios, and how they work as part of a team – key to identifying attitudes and behaviours. They also add an air of professionalism to the process enhancing employer branding.