SMEs are losing nearly a full work week every time they hire, according to new insights from Job Crystal. That’s around 33 hours pulled away from winning new business, expanding the client base, and driving revenue, often by owners who can least afford the distraction.
At the same time, a single bad hire can cost SMEs as much as R150,000, making hiring inefficiencies a significant financial risk. This is further compounded by the cost of traditional recruitment fees which average around R35,000 per hire.
In an effort to contain these costs, many SMEs choose to manage the hiring process themselves, but in a market like South Africa’s, this approach brings its own challenges.
According to Sasha Knott, CEO at Job Crystal, South Africa’s higher-than-normal unemployment rate means business owners are often inundated with job applications, with one job advert bringing in approximately 350 applications.
“Reviewing applications for one job alone can take up to 10 hours, with only about 2% of applicants typically meeting the role requirements. Our research shows that SMEs are spending close to 33 hours per hire, and based on the average salary of a senior employee, that equates to roughly R10,000 in internal time costs. That’s valuable time and money taken away from growing a business,” she explains.
Hiring under pressure: Why SMEs keep getting it wrong
For small business owners already wearing multiple hats, hiring has become a direct trade-off against revenue-generating activity, and even a so-called ‘quick hire’ can involve a long list of steps.
Knott explains that for many SMEs, hiring is often reactive rather than strategic with owners only starting the hiring process after identifying a problem like slipping service delivery, deadlines being missed, or teams becoming overstretched.
“In other words, they have already started to drop the ball, and this urgency can lead to rushed decisions, where the focus is placed on filling the role quickly rather than finding the right long-term fit, and this can increase the risk of a costly mismatch,” she adds.
Aside from disrupting team morale, straining client relationships, and weakening brand reputation in ways that are difficult to recover from, a wrong hire can also substantially increase recruitment costs.
“Once recruitment and rehiring expenses, salary paid during the mismatch period, training and management time, and HR and termination processes are all taken into account, a bad hire can cost SMEs around R150,000, which is a big unnecessary and avoidable cost,” adds Knott.
Many SMEs are now starting to rethink how they approach hiring, looking for ways to simplify and streamline the process, with some incorporating Artificial Intelligence (AI) tools into parts of the process, with positive results in specific areas.
Seven ways SMEs can cut recruitment time and costs
Despite these successes, Knott warns that AI is not a one-size-fits-all solution and is most effective when used in a hybrid model that combines the efficiency of technology with human judgement.
She adds that these seven simple, practical steps can also make a meaningful difference in improving hiring efficiency.
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Start where you want to finish: Don’t copy and paste a previous job description but write it for the role you need to fill. This way, you’re more likely to attract the right candidate the first time around.
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Streamline screening: Introducing structured questions or pre-screening steps to filter candidates earlier in the process. If you need a candidate with a certain qualification, filtering out candidates who don’t possess it can save you time.
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Reduce bottlenecks: Long, drawn-out processes can lose strong candidates to faster-moving competitors. Limit unnecessary interview rounds and shorten the time-to-hire without compromising quality.
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Build talent pipelines: Maintaining a pool of pre-vetted candidates so you can respond quickly to growth opportunities without having to start from scratch every time.
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Tap into low-cost recruitment platforms: If an agency is too expensive, consider cheaper platforms like Indeed, Gumtree, and LinkedIn.
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References matter: Speak to previous employers can give valuable insight into a candidate’s work ethic, reliability, and overall fit that may not be evident from a CV or interview.
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Harness tech where you can: Incorporating AI tools can help assist with high-volume screening and faster shortlisting, reducing hiring time by up to 85%.
