When it comes to the list of challenges faced by businesses big or small, old or new; recruiting new staff is always up there at the top of that list.
In order to best advise our customers, we wanted to know if the challenges in recruiting are the same as they always have been, and if they differ for large enterprises compared to SMEs.
We conducted a survey simply asking 100 CEOs and Managers “Do you find it difficult to recruit staff?” and then asked them to identify why in order to gain insight into modern recruitment challenges.
Overall, 69% of respondents said they found it difficult to recruit staff, but why…
What are the biggest challenges when recruiting?
The most prominent challenge that businesses face when recruiting is that applicants were not skilled or experienced enough to fill the position (44%). The next three reasons included lack of applicants (23%), challenging salary expectations (16%) and competition over quality applicants (13%).
What helps most when recruiting?
Meanwhile, those who didn’t struggle to recruit (31% of the survey respondents), stated that their recruitment successes came from offering large salaries (27%), followed by recruiting for a big or well-known brand. Company benefits and development opportunities both scored highly (17% respectively). 15% of respondents also cited “office location” as an advantage when recruiting.
So, the secret to hiring success?
The broad spread of responses given would indicate that there is in fact, no secret behind recruitment successes. Clearly, different strategies work for different companies. That means that the best strategy for recruitment is to identify what will work best for your particular business situation.
Does business size matter?
Contrary to what you might expect, larger businesses actually find it equally difficult to hire new staff as SMEs.
In fact, a marginally higher portion of those in a larger enterprise said that they faced difficulties in hiring new staff - 73% compared to 66% of SMEs. However, the reasons behind these challenges differ between large and small enterprises and these differences offer key insights.
Recruitment challenges for large businesses
There’s clearly no shortage of CVs being submitted for the roles with only 16% coining “Lack of applicants”. The main reasons why larger businesses felt they struggled to recruit included candidates lacking the required skills/experience (35%) and competition over candidates (28%). Therefore, where the applicants didn’t lack in skill, there was increased competition to acquire them.
When you consider that there’s no shortage of applications, but a lack of skilled applicants, it’s fair to surmise that larger businesses feel inundated with lower quality applicants who don’t meet basic role requirements.
Recruitment challenges for small businesses
Looking at the top reasons why SMEs felt they struggled to recruit tells a similar story but with some key differences. “Lack of skills and experience” is even more an issue than it is for larger businesses (50%). However, other prominent challenges were in the lack of applicants (27%) and keeping up with salary expectations (19%).
Learning from successfully recruiting companies
Whist the majority feel they struggle with recruitment, not all do. Building a great team is difficult, takes time and resources. To help guide a recruitment strategy and see that efforts yield the desired results, we also explored what worked well for both small and large businesses.
Recruitment strategies that work for large businesses
Large businesses who feel they were enjoying relative success when it came to recruitment have highlighted some stand-out contributing factors. These include, being a big/known brand (33%), offering company benefits (27%) followed by good office locations (20%).
Recruitment strategies that work for small businesses
SMEs who reported successful recruitment strategies cited their winning factors as offering large salaries (33%) and placing an emphasis on training and development (25%).
Key takeaways for businesses
Comparing these tables demonstrates that larger businesses are far more able to leverage their brand equity to maintain a skilled workforce. They feel they can rely on the strength of their brand combined with wider company benefits for staff.
Unfortunately, many SMEs are not in such a privileged position, and so this provides little comfort. Those in the SME space may feel they are forced to compete with salaries to lure new staff to their fledgling business brands. This is obviously not ideal and places additional financial pressures.
However, many SMEs are choosing to invest more in training and development for their teams - things that ultimately benefit their employees. Offering benefits such as training helps to make smaller businesses hugely attractive as employers when pitted against larger rivals in the recruitment marketplace.
Too many applications? Improve recruitment processes
There is a clear mismatch between the job description listed and the experience level of applications received.
This results in a more time-consuming recruitment process that includes additional shortlisting. Businesses need a better process for quickly vetting candidates and shortlisting applications if almost half of those received will end up unsuitable for the role.
To combat receiving too many applications, businesses should consider an improved online application process with the ability to create screening options. Posing qualifying questions, requesting samples of work, or requesting a cover letter which touches on relevant experience areas, are all ways to narrow down the applicant pool.
These will enable you to quickly rule out those not suited to the role, without having to review all the CVs sent. Meanwhile, that extra step will be enough to put off those who blanket-apply for every job going.
Not skilled enough? Manage expectations
The survey clearly reveals a skills gap in the market, or at least the perception that there is one. There are a large number of businesses who feel that applicants aren’t fitting their exact requirements.
Those businesses struggling to find those with the right skills or experience may either want to review their criteria and expectations – the archetypal candidate rarely exists - or look into services like SkilledPeople.com who specialise in candidate with 20+ years experience.
Either way, businesses must be prepared to look beyond a black and white list of qualifications when it comes to hiring new staff. It’s rare to find the perfect candidate who ticks all the criteria boxes and also comes with all the knowledge they need to do your new job.
Remember that, those who do meet your criteria will be as highly sought after by your industry competitors as they are by you. Such candidates will be able to command larger salaries, forcing your staffing costs to rise.
Going above and beyond salaries
Most companies offer training of sorts but this isn’t always integrated into the recruitment process – it’s maybe an afterthought or possibly even just taken for granted. However, prospective new hires take great interest in the wider package.
Those promoting more than just salaries when recruiting will reap the rewards so don’t overlook the value placed on these by potential new employees. Include these in your employment pitch, especially if you will struggle to be as combative as your competitors when it comes to salaries.
Furthermore, your business can only benefit from a heavily skilled workplace.
Some employers may be tentative about investing in training as it’s can be expensive, time consuming and, should employee leave, that expensive training leaves with them. However, consider this advice given by Richard Branson:
“Train people well enough so they can leave,
treat them well enough so they don't want to.”
Hire for attitude, train for skill
Instead of focusing on skills when interviewing, look to invest in training and nurture a culture of professional development. That way, you can affordably and literally “out-smart” your competitors.
Remember this golden rule – Hire for attitude, train for skill.
Focus on graduate job hunters
It’s well documented that many companies like hiring graduates (who by default will not be overly skilled or experienced). Some of the key benefits to doing so include they can be moulded, and are keen to learn.
The market conditions described by the survey results mean that a greater number of SMEs are investing in training in order to stay competitive. It's a win-win that offers SME's the opportunity to hire experience hungry staff, and offers graduates the opportunity to get ahead in a chosen field.
The results of this survey should be welcomed by those struggling to get a foot in the door, particularly for those graduates who may want to pursue a career in a field that differs from what they originally studied (graduates don’t always follow in the career path of their respective field of study).
Possible need to relocate
Businesses on the outskirts may be losing out to inner city businesses with better transport links. If you’re struggling to recruit primarily because of your location, then this could provide a strong enough business case to relocate. Expansion and recruitment should be an early consideration for any new business. You need to ask yourself whether you have access to the local talent pool which you will need in order to grow.
Increase salary offers (as a last resort)
Whilst a business shouldn't rely solely on offering large salaries to recruit, ultimately, if you want the best candidate then you must be prepared to pay for them in a competitive marketplace.
For businesses who struggle to get good candidates over the line, if there’s limited alternative options available, nor scope to offer training or wider benefits, there may be a need to be more competitive with salaries.