New research from HR, payroll, and employee engagement platform Employment Hero reveals that 75 per cent of SMEs are struggling to compete for talent against multinational corporations (MNCs), with 64 per cent also disadvantaged by prohibitive job ad costs.
Employment Hero’s The State of Recruitment Report found that advertising rates for SMEs have surged by 81 per cent over the past year, with the average cost to advertise a role reaching $5380 in Australia.
However, the research also noted that advertising costs equal almost one month of an average wage, which is a sore point for the majority of SMEs.
Adding to the time and cost pressures, hiring leaders for SMEs are dedicating 39 hours per week to hiring activities that include interviews (seven hours per week), screening (six hours per week), and testing (five hours per week). New hire turnover also poses a considerable challenge, with 17 per cent of candidates not passing probation or remaining in their roles after the first six months, which has led to a dramatic increase in recruitment costs for SMEs.
“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,” Ben Thompson, founder and CEO of Emplyment Hero, said. “It’s important to highlight the advantages of working for an SME over a multinational for job seekers and employees, especially during busy seasons such as Christmas when business owners rely on casual workers.
“To tackle the unequal playing field, SMEs must leverage their recruitment advantages,” Thompson added. “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.”
Thompson pointed out that 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. He also highlighted SMEs’ faster hiring process, with 48 per cent completing it in under ten days, compared to the industry average of 30 days.
“With the Australian and New Zealand economies and the global cost-of-living crisis continuing to sting employers and employees alike, SMEs face the full brunt,” he said. “However, there are still many ways SMEs can leverage the nature of their business and entice new talent against the competition.
“What our report has made very clear is the significant gap in the playing field between SMEs and MNCs,and while this has been an issue for a long time, with the ANZ economies the way that they currently are, we can’t afford to be letting our small business community lose its livelihood for the sake of adding more billions of dollars to corporate revenues,” Thompson concluded.
