Small businesses hire three unsuitable staff a year

Small businesses hire on average three unsuitable candidates a year with poor soft skills the biggest cause of mismatch, according to new research.

A new survey has found that the average number of small business mis-hires was in line with companies of all sizes. However, with more than four million businesses with up to 49 employees in the UK, accounting for nearly three quarters of all private sector employers, the impact of staff mismatches would be more keenly felt by smaller ones. One in ten said they made more than five poor hires annually.

While inadequate soft skills were identified by small businesses as a bigger cause of mismatch than role-specific hard ones, the survey also revealed the most common reasons why applications broke down. Salary expectations, expectations of role visa requirements and lack of hybrid working options were the most cited reasons.

The survey suggests small businesses identify mismatches a third quicker than larger companies. On average smaller businesses took the shortest time (12 days) to realise a new employee was unsuitable for the role compared to 18 days for companies with more than 250 employees.

Inefficient hiring causes mismatches

More than half of all employers said hiring is inefficient with the most common complaints about the traditional model being that employers received too many irrelevant candidates and the hiring process took too long.

Two thirds of companies said mismatched candidates got too far in the process, which on average meant that one third of applicants who progress to the interview stage are unsuitable for the role.

In fact, candidates rejected in the latter stages of the hiring process were more frequently turned down for technical reasons such as right-to-work issues (38%), which could have been identified earlier, than competency for the role.

Pay for results

To help overcome these challenges, a majority of UK businesses believe identifying higher quality candidates in the earlier stages of recruitment would improve hiring. In fact, 77% of those polled say they’d be happy to pay more for fewer, quality, candidates than many unsuitable ones.

With these challenges in mind, Indeed has introduced a new model where it will only be paid when a qualified applicant applies for a job or takes action to start an application.

SMBs can also take steps to refine their own candidate shortlists with a new feature that allows them to reject applications within 72 hours before being charged. In the US, where these changes have already been rolled out, SMBs using the new pay for results model have reported 35% fewer applications to review per hire.

Raj Mukherjee, EVP and General Manager at the global hiring platform Indeed, said:  “Every business knows the value of hiring the right person but it’s clear from our research that far too many experience mismatches and these can set companies, especially small ones, reeling backwards. The cost of making the wrong hire can be measured in hours lost and financial loss from open roles, neither of which any business can afford. Put simply, employers need help.

“The problem is that the hiring process is too complex, deeply inefficient and simply too slow and we know the frustration this causes employers and jobseekers. Finding quality workers should be as easy as pushing a button and that’s why we’re making it easier and faster for employees to shortlist quality candidates. Recruitment is fundamentally humancentric and by improving matching we can help fast forward to meaningful interactions between people, which is when the real magic happens.”

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Small businesses hire three unsuitable staff a year