Big business poaching the best talent, leaving SMEs struggling

Larger organisations reportedly have their pick of the best talent, leaving many smaller companies struggling to attract and retain skilled workers. Candidates should understand the benefits of working for a smaller business.

According to research from Employment Hero, three-quarters of hiring leaders agree that SMEs struggle to compete for talent against large organisations.

Ben Thompson, Employment Hero founder and chief executive, said: “Given the dire need to find talent is a critical issue for SMEs right now, we must address how SMEs can put their best foot forward to compete against MNCs (multinational corporations).”

Reasons for this varied, but a major contributor was advertisement budgets, as 64 per cent of hiring leaders claimed that SMEs are at a clear disadvantage due to the costs of accessing job boards.

Employment Hero noted that advertising costs have increased by 81 per cent in the past year, making the average role cost $5,380 to post. Meanwhile, hiring leaders at SMEs spend an average of 39 hours per week on hiring activities, taking time away from other business functions.

These hiring activities include:

• Interviewing (seven hours per week)
• Candidate screening (six hours per week)
• Candidate testing (five hours per week)

Turnover is another issue for these organisations, with 17 per cent of candidates not passing probation or remaining in the role for more than six months.

These themes are alarming for Australia’s SMEs, especially considering they make up 99.8 per cent of all businesses across the country.

Candidates should understand that there is merit to working for a smaller company: “It’s important to highlight the advantages of working for an SME over a multinational for jobseekers and employees, especially during busy seasons such as Christmas when business owners rely on casual workers,” said Mr Thompson.

“While small businesses may face budget constraints against MNCs, strategic showcasing of strengths in areas like culture, flexibility, and growth allows them to compete effectively. SMEs also boast a faster hiring process, with 48 per cent completing it in under 10 days, compared to the industry average of 30 days.”

SMEs need to leverage these strengths if they’re to stand out and reel in top talent.

“To tackle the unequal playing field, SMEs must leverage their recruitment advantages. These include offering tailored employee packages, greater flexibility in working arrangements, and a more hands-on working culture. Candidates can be a ‘big fish in a small pond’ whose achievements directly impact the business. SMEs also offer less competition for progression and salary increments,” Mr Thompson said.

“The key for SMEs going forward will be to maintain a dynamic and agile work environment that is appealing to jobseekers and aligns with how employees prefer to work. It’s often smaller businesses that can offer these perks and have more breadth to understand their employees’ strengths better to develop a working model that benefits both the satisfaction of staff and business output.”