Why SMBs are settling for “sub-par” talent

Small & medium businesses (SMBs) are the backbone of the Australian and New Zealand economies, but new research has found that instead of shooting for stars, too many SMBs are settling for “average” new hires – and a big part of the problem lies with recruitment processes.

While it’s generally accepted that SMBs have greater restrictions on time, budget and resources compared with their larger counterparts, the SME Hiring Challenges Survey run by Cameron Research Group for recruitment firm Michael Page, has shed light on just how wide this gap is: 80% of respondents are not satisfied with their recruitment approach. Nearly half of respondents struggle to find suitable staff in the first place, and when they do, 50% have to settle for someone they deem “okay” rather than “fantastic”.

Why is this happening? Michael Page suggested a number of factors were at play:

1. Limited pulling power. It’s a generalisation, but as employers most SMBs are generally not mentioned in the same breath as blue-chip corporations like Apple or KPMG; it’s difficult to get your brand out there even if the roles being advertised come with all the perks and benefits a candidate could ask for. While some candidates will purposely hunt out smaller organisations to work for, that’s the exception rather than the rule. People might only hear about you through word of mouth. And of course, a limited talent net will yield a smaller batch of candidates.
2. Time, money and expertise. This is something all SMB owners can relate to: there simply aren’t enough hours in a day. Often HR is a one-person team, or recruitment tasks are shared amongst business leaders. The opportunity cost is high: the survey indicates that on average it takes 35 hours to hire one new recruit – all of which usually comes out of an already-busy staff member’s time. Some 43% of SMBs consider hiring costs to be “excessive”. Is it any wonder that corners might be cut?
3. Constant turnover. Once a new hire is made, the challenges don’t stop – in fact, they are just starting. More than one third of SMBs say the new person will often leave the company within six months, putting investments in training and client relationships in jeopardy. Given that turnover, it’s hardly surprising that many SMBs settle for sub-par talent: it’s a case of “get anyone we can – and fast”.

Here’s how to improve the situation:

Play to strengths
The LinkedIn Talent Migration Trends ANZ report outlines what employees value most in smaller organisations. Top of the list is corporate culture and good relationships with colleagues. They also value closer personal and work relationships with executives, being able to identify with the vision of the company, and having a direct impact on the future direction and success of the company. With that list in mind, walk in the shoes of your employees.

The employee experience (EX) is the lens through which to view everything an organisation does for its people, at every touchpoint an employee will have with them. The key to this is data. Survey the sentiment and engagement levels of existing employees across a range of areas. By understanding the EX, you can identify areas to improve, and emphasise the things you do particularly well. Ask employees: What advantage do we have over large corporates? What benefits or perks can we offer that you’d most appreciate? Use these insights in your employer value proposition (EVP) to create an employer brand that will not only attract the best talent to your door but retain that talent for longer.

Broaden the talent net
Recruiting temporary highly skilled workers can bring specific skills into teams, which may only be required for one or two projects. The ability to scale up and down, based on demand, is what the contingent workforce is perhaps most useful for. With “gig economy” workers comprising almost one million self-employed Australians, who work on a freelance or project basis (and over 300,000 New Zealand workers doing the same), there’s no shortage of talent to choose from – and this high calibre talent is accustomed to coming up to speed quickly, so you won’t need to worry about lengthy briefing or handover sessions.

Review your recruitment process
If you’re bringing sub-par candidates into your organisation, is there a fault with your recruitment process? Perhaps it’s too long or complicated. Perhaps you’re not reaching the right people, or your screening processes are ineffective. Or perhaps it’s time to look behind the scenes and overhaul manual processes. ELMO Recruitment can automate recruitment steps such as requisitions, interview scheduling, and the creation of talent pools – freeing up valuable time and smoothing the candidate experience.

ELMO Recruitment can also help you deal with “administrative overwhelm”. Just like larger employers, SMBs can be inundated with job applicants. Keeping track of all the moving parts and various stakeholders involved in recruitment and keeping communication flowing is only possible with digital assistance.

Aim high

Hiring the best talent means increased productivity, business growth and profits, not to mention higher retention and improved morale and culture. Why settle for less? You’ve worked long and hard to make your business a success. Don’t jeopardise that success by bringing onboard talent that is not up to scratch or falls short of expectations.

ELMO Cloud HR & Payroll offers SMB clients an integrated suite of HR and payroll solutions from one vendor, in one dashboard, with one user-experience. ELMO’s cloud-based platform provides organisations with a centralised approach to managing an employee’s lifecycle, covering the 5 key touchpoints that your employees will have with you as an employer: Pay; Engage; Hire; Retain and Develop – that is, from “hire to retire”. For further information, contact us.