Small Businesses are Better at Spotting Unsuitable Hires

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Photo Credits - Dane Deaner via Unsplash

Global job and hiring platform Indeed conducted a survey involving 1,000 employers that suggested small businesses are better at spotting unsuitable hires compared to larger companies. The survey found that in terms of time, small businesses can spot unsuitable hires in 12 days – less than that of companies with over 250 employees which took 18 days to do the same.

However, the quickness in spotting bad hires does not align with the losses they endure due to unsuitable candidates. The Indeed survey also found that the average small business hires three unsuitable candidates – which has impacted these companies.

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Small Businesses in the UK

Based on 2022 data provided by the UK Government, there are 5.47 million small businesses in the country. This number makes up 99.2% of the total business population. In the larger context of small and medium-sized enterprises (SMEs), these businesses account for 99.9% of the total business population. Further, small businesses have been cited to have contributed 34.1% of turnover and 47.8% of employment of the total business population.

With rising concerns about skills and labour shortages in the UK, many have warned that small businesses will be the most impacted by the situation. The talent shortages that continue to affect businesses have caused many businesses to make poor hiring decisions.

Indeed Survey Findings

A major takeaway from the Indeed survey is that 74% of small businesses have said to have hired three unsuitable hires per year. These unsuitable candidates usually are not equipped with adequate soft skills for the role, causing a mismatch between the individual and the job. Other than that, 45% said that the unsuitable hires did not have the specific skills required for the role. They noted that around one-third of interviewed candidates are unsuitable.

Although small businesses spot unsuitable hires quicker than larger companies, they are still facing the issue of unsuitable hires. Furthermore, apart from the reasons mentioned above, businesses have also admitted to salary expectations (37%), right-to-work or visa requirements (36%) and unavailability of hybrid working (35%) as major factors for unsuitable candidates.

Continued practice of hiring unsuitable candidates can heavily impact businesses, particularly small businesses. Many have endured financial losses amidst an economic downturn and rising costs.

Impact of Unsuitable Hires

Hiring unsuitable candidates can be costly for businesses, not just financially. Below are some of the effects of unsuitable hiring that may be experienced by businesses.

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  • Loss of Salary

Unsuitable hires usually leave the company in less than a year. Businesses should consider this fact as they will have to pay salaries to candidates who will not be with the company long-term.

  • Wasted Training and Management Efforts

Time and finances spent for new hires should be factored in when recruiting. As it goes, unsuitable hires will still cost businesses these expenses and time.

  • Decreased Team Productivity

High employee turnover causes constant instability in the team. Many roles must constantly be delegated and reorganised to compromise with the changing team members who come and go. This can further cause a decrease in morale, leading to even more productivity losses and possibly more people resigning.

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