Small businesses taking risks when hiring staff, research shows

Small businesses in the UK are taking risks when hiring and managing staff, according to research from job marketplace Jobandtalent.

The research, which surveyed 500 small and medium-sized enterprise (SME) owners found that businesses are at risk as a result of a lack of HR expertise, with only 37% having a good understanding of employee rights and regulations.

Regulations

A quarter of respondents said that they understand current regulations but are struggling to keep up with changes, while 12% said that they have no understanding of current employee regulations.

The research looked at the hiring process within small businesses and found that 67% do not have anyone in their company who is dedicated to locating talent and hiring or HR, while 77% believe that hiring is the responsibility of the business owner.

Over 20% of SMEs take between two and five days to hire and get new candidates on board, with hiring tasks, such as reference checks and pension enrolments, taking business owners away from their main responsibilities.

SMEs are also using outdated methods to hire new talent, with 30% posting job adverts in newspapers and over 50% relying on word of mouth.

Risks

Commenting on the research, UK managing director of Jobandtalent, James Peck, said that it shows that businesses are taking enormous risks when hiring new talent.

He stated that complying with regulations on auto-enrolment and the apprenticeship levy requires “an almost constant stream of admin around hiring, payroll and benefits,” which is “very time consuming” and keeps business owners away from core tasks.