Skills Shortage Blamed For SME Hiring Errors

SMEs Identify Underskilling As Key Problem

23.10.2014

Fergal Dowling, Partner | +44 (0)121 214 5476

SME owners have said a lack of skills is leading to a high rate of bad hires, with many posts being filled by people with questionable credentials.

A survey of 1,000 small business owners by business development consultancy Sandler Training (UK) found that around 40 per cent of firms have had to let three or more employees go in the past five years because they were not up to the job, while 14 per cent had to move out six or more.

The poll found that 51 per cent of employers regard a poor standard of applicants as a key issue, although many others accepted they were at fault, with 27 per cent admitting to making errors of judgement and 11 per cent rushing the process.

All this comes at a high cost, averaging at £13,799 when recruitment, wasted time and wages are taken into account. The figure rises to £17,900 in London.

The situation may get worse as unemployment plummets, with more vacancies to fill and fewer good candidates to fill them.

Noting this, chief executive of Sandler Shaun Thompson said: "With unemployment at a 25-year low, it's not surprising that the labour market is tightening and small businesses are feeling the effect with a reduction in applications.

"However this doesn't have to result in poor hires."

He added that "building a recruitment strategy that incorporates assessments, which will give information into candidates' attitudes and how they should be questioned in interviews" will help employers get the process right.

Achieving this aim is a key issue, as the survey also found that 74 per cent of SMEs regard their employees as critical to the success of their business.

According to the latest official UK employment figures, the unemployment rate fell to six per cent in the three months to August, with the number in work rising by 46,000 since the previous quarter. This jobless rate was the lowest since 2008.

Expert Opinion
Businesses of all sizes are of course reliant on the performance and skills of their workers, but this is arguably even more critical for small and medium-sized enterprises which need to ensure that all members of their team are fulfilling their roles to be necessary standard.

"Hiring and recruitment are an absolutely key part of growing a business, which is why it is so important that SMEs take every possible step to ensure they have robust systems and processes in place so that the best possible candidates can be identified. It is also vital they have policies implemented that mean workers are left in no doubt as to what their responsibilities are and what action could be taken if they fail to meet those requirements.

"Small firms need to speak to employment law experts to get more guidance on this important issue."
Fergal Dowling, Partner