Recruitment in small firms

TLDR

Small firms often rely on informal recruitment methods, which can offer advantages but also lead to various problems. The study investigates whether small firms adopt prescribed recruitment procedures and whether formal methods could lower staff turnover and costs. Case studies reveal that small firms rarely adopt systematic recruitment procedures, instead favoring word‑of‑mouth and known‑quantity hires, and most employers view formal methods as less cost‑effective in the short term.

Abstract

The article summarises findings from recent case study research into recruitment in small firms. The research aims to ascertain whether small firms follow the procedures outlined in the prescriptive literature on recruitment, and to what extent they rely on informal recruitment methods. It finds little evidence of the adoption of the recommended systematic procedures and a high use of “tried and trusted” methods including word‐of‐mouth recruitment and the hiring of “known quantities”. The implications of this are examined. While these methods have certain advantages, they may also give rise to a number of problems. The study argues that the adoption of more formal procedures and methods could reduce staff turnover in small firms and its associated costs. However, it concludes that many small employers would remain unconvinced by the case for opening up recruitment channels, and may find their existing approaches more cost effective in the short term.