Small Businesses Recruiting Challenges and How to Overcome Them


In the US, small and medium-sized businesses are the principal source of employment. SMBs employ more than 50% of workforce and generate more than half of the nation’s GDP. When it comes to recruitment, finding skilled employees is a barrier for small businesses. In this article, we will discuss some of the recruiting challenges faced by small businesses.

  • Finding a skilled candidate: According to the survey conducted by Robert Half, 60% of SMBs are facing difficulty in finding skilled candidates. This is because skilled candidates are demanding high pay and for SMBs, it is difficult to afford. If small businesses are unable to hire skilled candidates the other alternative is to hire unskilled candidates and train them. But, some of these unskilled candidates get trained properly in your company and after a period of time they switch to a bigger organization.
    • – How to overcome this situation?
      SMBs should create better career opportunities for employees working in their organization. They should clearly define the benefits to the candidates for working with their organization. This will help them to hire skilled ones.
  • Maintaining employee morale and productivity: Employee morale is important, as it directly affects the organization’s productivity. The reason may be because of complex HR policies, not accepting responsibility for mistakes, setting impossible goals, threatening their jobs, improper performance of management systems, poor economic conditions, etc.
    • – How to overcome this situation?
      Maintain an open-door policy for the employees. This enables them to share their concerns and questions with the management. Conduct regular staff meetings to ask them questions like how they are finding the workplace, whether they are facing any issue. If you think their concerns are reasonable and valid, take necessary actions to solve them as quickly as possible.
  • One or two people managing everything: In SMBs, one or two people take care of all employee related activities, which is not a good idea. In fact the need for people in HR department is more because they are the ones that search for suitable candidates, they do all the administration related work, manages and maintains employee wage and benefit programs, etc. With all this work load, they fail to manage the gap between the employer and the employees.
    • – How to overcome this situation?
      As a small business owner, you should identify the job requirements for specific HR position, then describe roles and responsibilities accordingly. If the job description is not adequately conveying the position’s requirement or if it is too broad, the candidate will be confused and will not be able to carry out the work properly. You can also contact a recruiting agency to find an ideal candidate for the job opening.
  • Improper infrastructure for recruitment: HR department is responsible for attracting, retaining and developing high skilled employees in the organization. But without a proper recruitment infrastructure, it would be difficult for the organization to do this. The reasons may be lack of skilled or experienced HR team, not maintaining proper applicant tracking system or the lack of sources to attract targeted candidates.
    • – How to overcome this situation?
      Maintain a skilled HR team. Have a proper applicant tracking system and proper sources to do the recruitment process efficiently and effectively will help in hiring the right candidate.
  • Top officials not involving in recruiting process: With SMB owners and its top officials having the charge of focusing on core business activities, they have little time to spend with the HR team to discuss issues relating hiring of candidates. They just inform the concerned HR about the requirement and sometimes the HR team is not able to choose the right candidate.
    • – How to overcome this situation?
      If you want skilled employees in your organization, then you need to allocate some time with the HR department to discuss the issues on how to choose a candidate. This will improve the quality of the recruitment.
  • Poor cultural fit: Employers should look into two aspects while recruiting a candidate. First, whether the candidate is having the capabilities of building the organization. Second, whether the candidate will fit into the organizations culture. Most SMBs do not consider this quality of the the candidates. It will negatively impact on the organization.
    • – How to overcome this situation?
      To overcome this situation, you need to hire a candidate on a temporary contract. In the first few weeks of joining your organization, monitor the candidates performance such as how he/she is behaving, work ethics, attitude, etc. After the completion of contract period, based on the employees performance you can reduce the probation period or make him/her a permanent employee.

It is not that there is lack of qualified candidates or shortage of talent. The challenge here is to come up with some new ideas that will attract talent and retain candidates. Small businesses should get rid of old processes that are ineffective in hiring candidates and should change the way they search for skilled candidates.