Partner Article

Cutting down on hiring time for SMEs

We often hear reports of SMEs struggling to secure funding, battling with extensive red tape and combatting fierce competition from larger businesses in their sector. Faced with the added uncertainty as to how Brexit will play out, it can very often feel like pushing water uphill for small business owners, with one obstacle cropping up after the next.

This is without the added pressure of recruitment. Whilst struggling to mitigate and manage these business curveballs, our recent research found that 86% of SMEs are spending up to ten extra hours a week on hiring, with 73% of business decision makers staying behind after hours to complete these recruitment tasks.

So where is it going wrong, and how can business owners ensure that hiring becomes helpful, rather than a hindrance?

Facing frustrations

As SME owners set their minds to planning for the New Year, it’s time to assess how they can improve processes and enhance efficiency – recruitment should be one of the first areas to address because the reality is, the current process is broken.

Typically, businesses have two main options for hiring. They could take the ‘post and hope’ approach and use a job board. However, our research found that 41% of business owners struggle to find a quality candidate amongst a high volume of average candidates - something that often occurs when using this method. The second option is to work with a recruitment agency directly, but this presents its own problems – one respondent summarised the overarching view that “the business is too rigid in which agencies we are allowed to use – some more creative roles require specialist agencies”, whilst other respondents highlighted the “age old problem of budget”.

In the face of such challenges, business decision makers find themselves heavily involved in the recruitment process, even though 34% didn’t expect to be involved in the recruitment process at all when they took the role. For half of respondents, spending at least 5 hours a week on hiring activities has sadly become the norm.

Breaking the trend

With over a quarter (28%) of SMEs reporting that the hiring set up in their business “definitely” results in the wrong hire being made, it’s time to look to a new process before the company’s bottom line is affected. This is where the marketplace model could revolutionise the sector. We’ve seen the poster children (Airbnb and eBay, to name a couple) of this model completely change the way consumer-facing sectors work, and recruitment now stands to benefit from the same economies of scale and efficiencies that this model delivers.

Employers make up the ‘demand’ side of the transaction, those that are looking for a fast and quality outcome, and the recruiters are the supplier – they provide the talent.

The model provides recruiters with a constant pipeline of qualified, inbound employer leads, meaning that they can utilise their time to deliver competitively priced candidate placements. This means that small businesses step back in charge – they are able to control their own fees, on their own terms, and have the ability to get multiple recruiters on the job. The recruiter is then incentivised to deliver because there is no guaranteed ‘exclusive’ on a job – if they want their fee, they need to provide quality candidates, something our respondents highlighted as a frustration in the current process.

An era of change

Some reports indicate that the cost of a wrong hire can cost 30%-150% of that person’s salary. Pair this cost with the extensive amount of time that business owners are spending on hiring, something’s got to give. The marketplace model gives the opportunity to streamline and optimise the relationship between employers and recruiters so that recruiters still retain their valuable place in the ecosystem, but SMEs are able to improve hiring in a cost-effective and time-efficient way.

By addressing this issue, business owners free up their time to focus on growing their business and dedicating time to making new investments, implementing new products and expanding the services that they offer. 82% of respondents said that they believe spending time on hiring activities takes time away from focusing on their actual job role – this can no longer be the case. By harnessing technology, SMEs can hire fast at a lower cost, without sacrificing quality.

This was posted in Bdaily's Members' News section by Ben Hutt .