As small and midsize companies seek to expand their workforce, many are struggling to get the hiring process right, and are suffering the consequences of having made poor hiring decisions, the results of a survey by recruitment firm Robert Half show.

The survey asked more than 1,000 business owners and human resources managers at U.S. firms with between one and 499 employees about their views on a variety of hiring issues. The findings, released on March 21, indicated that nearly half (49%) of respondents believe that most hiring managers underestimate the complexity of the hiring process. Moreover, 65% of respondents said they had experienced problems with their company’s hiring process, and 81% admitted that their company has made a bad hire.

The results also suggested that hiring the wrong person can have serious consequences for small businesses. The owners and managers surveyed estimated that they had wasted an average of 45 hours on hiring and onboarding people who ultimately did not work out. In addition, 53% of respondents reported increased stress on the team members who were working with the bad hire, and 20% said the experience of dealing with a bad hire had decreased their confidence in the responsible manager’s ability to make good hiring decisions.

The findings further indicated that while a bad hire could be identified rather quickly, correcting the mistake took longer: 58% of respondents said it took less than a month to realize they made a bad hiring decision, but that it took more than twice that time on average (8.8 weeks) to let the person go. Moreover, the respondents reported that an average of nearly five more weeks passed before a replacement started working, with 68% acknowledging that the extra workload was placed on existing staff during this period. By contrast, just 18% of respondents said their firm brought in temporary professionals to assist with heavy workloads while in the process of replacing a bad hire.

However, the survey results also suggest that there are several ways businesses can address deficiencies with their hiring process and minimize risks of making a bad hire. More than half (58%) of respondents said the best new hires come from referrals, including employees, friends, recruiters, and others in their network.

Researchers also observed that companies tend to be more successful in hiring the right person when they go beyond simply posting a job opening and hoping the right person will apply: among the respondents who reported using recruiters, 76% said a recruiter was able to find a candidate they would not have found on their own.

In addition, the survey showed that 45% of owners and managers believe that the most challenging hiring step is evaluating candidates based on their skills and potential fit, with 26% admitting that it takes them too long to fill open roles. The findings indicate, however, that delegating these duties to an outside resource can cut hiring timelines and save money: 43% of respondents reported that working with a recruiter saved the firm time because the recruiter did most of the work, while 36% said that using a recruiter saved them money by finding the right candidate more quickly.

Paul McDonald, senior executive director at Robert Half, noted that several factors can complicate hiring in smaller organizations. “Some firms lack dedicated recruiting staff or a human resources function altogether,” he said. “Multiple demands on a business owner’s time also can pull attention away from recruiting and cause it to fall to the last priority.”

From Benefit Trends Newsletter, Volume 60, Issue 5

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