Small and Midsized Businesses Face Hiring Challenges

There has been a consistent trend of significant job growth coming from the expansion of small to mid-sized businesses. According to the ADP/Moody’s National Employment Report, over 77% of all new job growth in May 2017 came from small to medium-sized companies. Many of these companies struggle to get the hiring process right as they expand their workforce according to the results from a survey released in March 2017 by recruitment firm Robert Half. The survey asked 1,000 business owners and human resource managers at U.S. firms with between one and 499 employees about their views on a variety of hiring issues. Nearly half of the respondents believe that most hiring managers underestimate the complexity of the hiring process.

A surprising 81% admitted that their company had made a bad hire. Hiring the wrong person can have serious consequences for small businesses. It was estimated that owners and managers had wasted 45 hours on hiring and on-boarding people who ultimately didn’t work out. Over half of the respondents reported increased stress on team members who were working with the bad hire. The findings indicated that even though a bad hire may be identified quickly, it took an average of 8.8 weeks to let the person go. Another five weeks passed before a replacement started working, 68% acknowledging that the extra workload was placed on existing staff during this period.

Businesses can address these deficiencies with their hiring process and minimize the risks of making a bad hire by simply going beyond posting a job and hoping the right person will apply. More then half (58%) of the respondents said the best new hires come from referrals, including employees, search firms, and others in their network.  Among the companies using search firms, 76% stated that the firm could find a candidate that they would not have been able to find on their own. The survey showed that 45% of owners and managers find the most challenging step is evaluating candidates based on their skills and potential to fit, with 26% stating it takes too long to fill open roles. The findings indicate that by delegating these duties to an outside resource, hiring timelines can be shortened as the search firm does most of the work and 36% said that using a search firm saved them money by finding a candidate more quickly.

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