Small businesses waste thousands of pounds on recruitment

Research has found that UK businesses employing up to 250 people are potentially wasting thousands of pounds and valuable management time each year on their recruitment process.

With more than two thirds of respondents (68%) planning to recruit in the next 12 months, optimism is there. The survey suggests, however, that 88% have regretted hiring a particular individual in the last year, due mainly to a combination of the individual being ‘not up to what was required’ (33%), a ‘lack of skills’ (47%) or ‘subsequent poor performance’ (35%).

Small businesses cannot afford to get these decisions wrong – 61% of those surveyed intend to use a recruitment consultant this year and nearly half (46%) think it is acceptable to pay a fee of up to 15% of the employee’s salary. With a UK average salary of £25,900 (Annual Survey of Hours & Earnings, December 2010), this could mean a bill of up to £4,000.

The CV and interview have always been mainstays of recruitment, but the research found that 95% of small businesses would like to speed up this process, and that more than half (52%) claimed interviewing unsuitable candidates wastes valuable business time. So what is the solution?

The use of objective assessment of individuals can help on both counts, by providing a valuable sifting of potential job candidates and assessment of their competencies through online assessment.

With 87% of respondents saying that cultural fit and attitude are equally as important (52%) or more important (35%) than qualifications when recruiting a new employee, objective assessment also offers a highly valuable means of measuring whether an individual will be an appropriate fit for a job and the organisation.

But there is an apparent perception issue when it comes to objective assessment. 87% of small businesses think it is too expensive, unnecessary or exclusively for use by large businesses.

Arguably the use of objective assessment when recruiting is even more important for a smaller organisation, where management has less time and is more concerned with controlling cost.

Assessment can provide any business, small or large, with invaluable insight as to whether an individual will thrive in that particular environment – this reduces the risk of a bad hire and ultimately saves the business money with increased productivity and reduced staff turnover.

The research also showed that more than a third of respondents do not have any process in place for staff retention. Given the cost and time it takes to bring in new staff, it is vital that even the smallest business takes time to consider how to keep their valuable individuals engaged and motivated.

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Julian Wenban joined SHL in 2006 to lead product marketing, and in 2008 created a new central marketing operation. He took on his current role in April 2010, a fresh initiative focused on providing direct online access to SHL solutions, in particular to the SME market. Prior to SHL, Julian held senior marketing roles in the Telecoms, Financial Services and Travel industries. He has a degree in Applied Mathematics from Reading University, a Postgraduate Diploma in Marketing from the Chartered Institute of Marketing, and is a fellow of the Institute of Direct & Digital Marketing.

  • I use saves a fortune!

  • Hire Slow.  That’s still one of the things I hear a lot in recruitment circles.  But recruiting will always be something that goes wrong a certain percentage of the time.

    Having good processes and a good team in place to deal with the people that drive the business pays dividends not only in avoiding costly hiring mistakes, but also as you say, avoiding losing good staff – which itself is arguable more costly in terms of the resources required both for that individual’s initial hiring, and then the subsequent resources expended on training etc.