6 Ways Recruiters Can Solve Small Business Hiring Problems

Businesses of any size need people to drive them towards success. We're not talking about bums on seats, but the real talent that supports an organisation in accomplishing its goals.

Yet, many small business owners can find it difficult to attract workers. The best candidates tend to head for bigger companies with deeper pockets. And the ones who do apply might lack the right skills or don't stick around long enough to make an impact.

Lindsay Mastrogiovanni, CEO of Conscious HR, insists that small business owners must stay invested in their hiring processes:

“Hiring isn’t just about filling seats; it’s about building your future. You'll very often hear me say, ‘Don’t be a victim of the warm body syndrome.’ Most small businesses are hiring reactively, only looking at immediate needs. But without a plan, you risk skill gaps, burnout, and most often, turnover that stifles growth.”

This article explores some of the top hiring pain points for small businesses and how to overcome them. Whether you're dealing with budget constraints, slow hiring processes, or a lack of employer brand recognition, we'll introduce practical steps to attract and retain people who want to take your business to the next level. 

Why do small businesses struggle with hiring? 

Small businesses have an array of recruitment challenges to overcome. Here are some common issues they’re up against every time they have a vacancy to fill: 

Limited hiring budgets 

Money is understandably tighter in small businesses than in larger organisations, making it difficult to compete for top talent. While big companies can afford higher salaries, generous benefits, and attractive perks, smaller employers frequently struggle to match these offerings. 

According to Robert Half, 50% of UK small to medium-sized businesses find it difficult to meet their candidates’ salary expectations. This wage gap puts small businesses at a disadvantage, particularly when competing for skilled professionals who may have multiple job offers on the table. 

Lack of employer brand recognition 

Large organisations have established reputations and substantial budgets to invest in their employer branding. They appear on "best places to work" lists, pay for expensive pitches at career fairs, and benefit from an extensive word-of-mouth network. 

As unknown entities, small businesses can struggle to attract any attention. As a result, the Recruitment and Employment Confederation (REC) reports that 81.5% of UK employers with fewer than 50 employees experience a shortage of candidates for their roles. 

Many candidates naturally gravitate towards companies they recognise, assuming they offer better salaries, benefits, and career growth. Job applicants also want to list a big brand name on their LinkedIn profile and CV.  

Slow hiring processes 

For small business owners, recruitment is just one of many responsibilities on an already full plate. With fewer hands on deck, hiring is a slow-moving process, with delays at every stage. 

This inertia can have serious consequences. Nearly half of SMB hiring managers report higher turnover rates due to prolonged hiring processes, according to Robert Half’s research.  

Narrow skill sets 

Skill shortages are also a widespread issue. More than 9 in 10 businesses struggle to fill skill gaps, particularly in entry-level roles. Similarly, Robert Half reports that over 40% of hiring managers say finding candidates with the right skills is one of their biggest challenges for the coming year. 

The impact goes beyond just hiring delays. When businesses can’t bring in the right talent, existing employees end up stretched too thin and productivity slows. Some companies resort to hiring underqualified candidates, hoping to train them up, while others put off hiring entirely, leaving critical gaps unfilled. Neither option is sustainable in the long run.

Disappearing candidates

Candidates dropping out mid-process is a common frustration for small businesses. When hiring isn't running smoothly, people start to lose interest. Slow responses, unclear timelines, or too many interview stages can make a job opportunity more hassle than it’s worth.

Many candidates assume silence means the recruiter has ghosted them, so they move on. Others accept offers elsewhere before a small business has even finished making a decision. This can be especially frustrating when the company has already invested time in screening and interviews, only to find themselves back at square one.

Constant turnover 

Small businesses often struggle to hold onto employees, especially when they can’t offer the same career development opportunities as larger employers. When workers feel there’s little room to grow, they start looking elsewhere, leading to a revolving door of hires and departures.

This is a major challenge across the UK. In 2024, the average employee turnover rate was 35%, meaning more than a third of employees left their jobs within a year. 

Of course, some turnover is normal, as employees naturally move on to new opportunities throughout their careers. But when turnover is too high, it disrupts operations, increases hiring costs, and puts pressure on the remaining staff. Equally, when employees see colleagues leaving frequently, team-wide morale takes a hit, and retention becomes even harder. 

6 ways small businesses can overcome these hiring roadblocks

Small businesses are the underdog of the hiring market. But the following practical strategies can help businesses with limited budgets and resources to attract, hire, and retain top talent. 

1. Enhancing your compensation packages to stay competitive 

While small businesses can’t match the salaries offered by larger companies, they can bolster their total compensation package to attract talent. Rather than focusing solely on salary, small businesses should consider adding perks and benefits that make roles more appealing, such as:

• Flexible working arrangements: Remote or hybrid work options can be a major draw
• Extra paid time off (PTO): Offering additional leave beyond the statutory holiday entitlement can boost retention
• Equity options or profit-sharing: Giving employees a stake in the business increases commitment 
• Performance-based bonuses: Incentives tied to business success can balance budget constraints
• Wellbeing initiatives: Mental health support, team-building activities, or wellness stipends can improve job satisfaction 

Recruiters can support this step by conducting salary benchmarking to help businesses understand where their pay and benefits stand against industry standards. 

2. Promoting an attractive company culture 

A strong company culture can turn an organisation into a sought-after workplace. Smaller businesses have something unique to offer—a close-knit team, meaningful work, and a direct impact on business success. 

One effective way to showcase company culture is by highlighting your employees and their contributions. Furza, a graduate recruitment and training business based in Manchester, does this well by regularly spotlighting team members on social media. These shoutouts, whether from the company page or individual managers, demonstrate a culture of recognition and support. As example, Ashleigh Cocker, Head of Business Development, recently shared that sales experience isn’t essential for success at Furza. Emphasising a “hire for attitude, train for skill” approach, she celebrated the achievements of her SDR team. This not only highlights team success but also reinforces Furza’s inclusive hiring philosophy, welcoming diverse backgrounds and valuing potential over a perfect CV.

Recruiters can also support small businesses by helping them tell their story, for example, by incorporating important details in job descriptions and careers pages. Showcasing what makes their workplace special sends a clear signal to candidates who can see they align with their values. This publicity encourages them to apply for a role. 

3. Developing a structured recruitment process 

Many small business owners juggle recruitment alongside their day-to-day operations, making it difficult to manage multiple recruiter relationships or dedicate time to a well-planned hiring process.

But a lack of structure can result in poor job adverts, unclear role expectations, and disorganised interviews, all of which can delay hiring and contribute to high turnover. Speaking on the Small Business Evolution podcast, host Ashley Beck explains the importance of thorough prep work for every open vacancy: 

“If you haven’t given proper consideration to the requirements of the job you’re looking to fill, creating a standout job advert, and thoroughly planning your interview, hiring, and onboarding processes, then all you’re going to do is waste a whole lot of time and money promoting the job in the wrong way. You’ll get the wrong type of applicants for the role, which will delay hiring, meaning delaying relief for yourself and your staff who are currently covering the work that you need the new hire to do.”

Bringing in specialist recruiters can streamline the process for small businesses, ensuring better organisation and faster decision-making without compromising on quality. A structured approach also keeps candidates engaged and informed so you lose fewer to speedier competitors.

4. Prioritising skills-based hiring 

If your past recruitment strategy has been to fixate on finding candidates with the right level of experience, you may have waited months for the perfect candidate to appear. Instead, skills-based hiring prioritises a candidate’s abilities over traditional qualifications or years in a similar role. This makes it easier to find capable people, even if their background isn’t a perfect match on paper. 

This skills-first approach is gaining traction. TestGorilla reports that 84% of UK companies have adopted skills-based hiring to improve retention and job performance. The shift away from degree requirements and rigid experience thresholds has allowed businesses to widen their talent pool while ensuring new hires can actually do the job. 

For small businesses, the first step is to identify the essential skills missing in their team. Instead of relying on job titles as a hiring filter, recruiters should:

• Define the practical skills needed for success rather than focusing on previous job titles; for example, problem-solving, customer service, or leadership skills 
• Evaluate the candidate’s ability rather than looking at their CV; for example, use skills assessments, work samples, or trial tasks to gain a flavour of their potential 
• Look for transferable skills; for example, a candidate with the right problem-solving or technical abilities may be a great fit, even if they come from a different industry 

A skills-first mindset reduces mis-hires and improves retention. Employees selected for their competencies tend to be more engaged and productive, leading to a stronger, more adaptable workforce.

5. Providing engaging candidate experiences 

A poor candidate experience can cause businesses to lose great talent before the hiring process is even complete. Candidates want clarity, responsiveness, and a smooth process. When they don’t get it, they often drop out in favour of companies that communicate better.

Recruiters for small businesses can improve candidate engagement by focusing on:

• Writing clear, compelling job descriptions: Use language that reflects your company culture and outlines expectations without jargon.
• Responding to applicants promptly: A delayed response can make candidates feel ignored and push them toward other opportunities.
• Providing a transparent hiring timeline: Let candidates know what to expect at each stage, from interviews to final decisions.
• Giving personalised feedback: Even if a candidate isn’t in the mix, a thoughtful response leaves a positive impression for future opportunities.
• Streamlining the process: Too many interview rounds or long wait times between stages increase candidate drop-off rates.

6. Offering long-term career progression opportunities

Career development is one of the biggest factors influencing employee retention. While small businesses may not have the rigid career ladders of larger organisations, they can create growth opportunities through skill-building and internal progression. Employees who see a future within a company are far more likely to stay. In fact, LinkedIn's Workplace Learning report suggests that offering development opportunities is the top strategy for 88% of organisations concerned about employee retention. 

However, many other businesses are cutting back on development. A 2025 survey by the British Chambers of Commerce found that nearly one in five businesses has reduced investment in staff training due to economic pressures. 

Small businesses can boost retention by focusing on the following professional development incentives which recruiters can promote during hiring processes:

• Mentorship programmes: Pairing junior employees with experienced team members provides guidance and professional development
• Training courses and certifications: Investing in employee skills makes them more valuable to the business while increasing job satisfaction
• Defined growth opportunities: Outlining potential career paths, even in a small business, helps employees see a future; for example, you might map out how an employee can move from a specialist role to a managerial position
• Project-based skill development: Allowing employees to take on new responsibilities or cross-functional projects can provide organic career growth

Why small businesses should use a recruitment management platform 

Hiring challenges shouldn’t hold small businesses back. With a structured, efficient recruitment process, employers have a better chance of securing the right talent, without the endless cycle of turnover and delays.

A recruitment management platform like Hiring Hub connects businesses with multiple specialist recruiters. Employers can fill roles faster, improve candidate engagement, and expand their reach without the burden of extra admin. 

At Hiring Hub, we make recruitment structured, transparent, and hassle-free. Our platform streamlines hiring from start to finish, giving you faster access to top candidates and smoother communication with recruiters.

Take a free employer trial today and see how Hiring Hub can transform your recruitment process.