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What is the time cost of hiring great candidates for SMEs?
When we conducted a survey earlier this year to find out about the state of hiring within SME businesses, we thought we might uncover some interesting facts about methods of recruitment, internal structures and responsibilities, and the quality of candidates they attract. But we ended up unearthing issues such as the length of time it takes for some SMEs to find their ideal employees, the difficulty in sifting through applications and evaluating resumes as well a general misconception of what’s involved in the recruitment cycle.
In light of these findings, we decided to create a webinar series for SMEs – the first of which has been developed to share our expertise on creating compelling job ads and screening candidate CVs. You can watch the recording here, by the way. We will also be sharing some of the insights in a series of articles and a report to summarise all the findings. Stay tuned for those!
How much time do SMEs spend on each aspect of the recruitment process?
Altogether, between spending time placing the job advertisement, developing the job description, evaluating resumes and conducting interviews, it seems many SMEs are spending upwards of 35 hours every time they hire someone new. Given many SMEs don’t have an internal recruitment resource or HR department, it’s no surprise that SMEs are increasingly finding it a challenge to source talent, as reported in the KPMG Australia Growth Intentions Snapshot. The old adage ‘time is money’ comes to mind – who can afford to drop all their duties for the equivalent of an entire week?
Unsurprisingly, evaluating resumes and conducting rounds of interviews are seen as the lengthiest parts of the process. In both cases, 20% of our SME respondents indicated that they spend over 10 hours on each of these aspects of the recruitment process. No mean feat when you have a full time job to do in a small business that needs all hands on deck.
What’s taking SMEs so long to make a hire?
Many of the SMEs we surveyed had hired managers and directors in the past 12 months, which would obviously require a more thorough screening process than hiring a junior member of staff. According to the LinkedIn Talent Migration Trends ANZ, almost half (44%) of job switchers moving from large corporates to SMEs had 10 or more years’ experience. The more expensive your new hire is, the more care you will take in hiring them – you want to ensure they’re the right person for the role and that can mean several rounds of interviews to get it just right.
And that’s not the end; once an offer has been made and accepted, there is a further waiting period. Half of our survey respondents said that it takes more than four weeks for the new employee to start work – sometimes more than three months.
What can SMEs do to cut down recruitment time?
SMEs who opt not to use a recruitment agency for their hiring needs must carefully weigh up the pros and cons of using an internal resource to source new talent. Consider the following:
· Who will conduct the recruitment process? It should be someone more senior than the position you are hiring, likely meaning that a senior member of staff will need to take time out of their schedule. It might also be that multiple members of staff need to be involved – what do their ‘man hours’ add up to?
· Do you have quick access to a pool of candidates? Sometimes, just searching for the right talent can take up time. You might be advertising your role on LinkedIn or job boards but it’s sometimes the passive candidates who make the best ones.
· Do you know what to look for in resumes and interviews? Some people might not look like your dream candidate on paper but when you meet them in an interview they could blow you away, always keep an open mind when shortlisting for an interview.
The Australian Bureau of Statistics say that nearly all (97%) of Australia’s SMEs employ fewer than 19 employees. With such small headcount, can SMEs really afford the cost of time it takes to hire great people for their business?