Small firms fail to check references
Almost three-fifths of small businesses use 'word of mouth' to fill vacancies and over half of small business bosses fail to check candidates' references, according to a survey by Bank of Scotland Business Banking.
The Bank's survey of small businesses across the UK found that while almost three-fifths (57 per cent) rely on word of mouth and personal recommendations to fill a vacancy, almost as many (53 per cent) would fail to check references before they hired someone.
Older bosses are evidently most guilty of failing to carry out reference checks with just 46 per cent of owner-managers aged over 55 doing so, compared to 60 per cent of bosses aged under 35. While word of mouth is the key method of selecting candidates to fill a vacancy, local press advertising (52 per cent) closely follows it.
One in ten small businesses use recruitment consultants or 'head-hunters' rising to one in five for those employing over ten people.
Passing a basic interview is invariably all that remains between a candidate and the job they apply for according to 62 per cent of small businesses. 'Trial periods' are used by half of businesses. Just over half (52 per cent) of small business bosses who have hired someone in the past five years have 'regrets' over someone they've recruited. Whilst almost two-fifths of bosses (39 per cent) regret hiring one or two people in every ten they recruit, an unlucky seven per cent of bosses regret hiring over half the people they employ. For almost a quarter of small businesses, this regret has culminated in the firing of a recruit in the last five years.
'Incompetence' is the top reason (46 per cent) given by respondents for dismissing a new recruit followed by 'gross misconduct' (17 per cent) and theft (16 per cent).
Kevin Gillett, Head of Bank of Scotland Business Banking, said: "Word of mouth and personal recommendations appear to carry a great deal of weight in today's tight labour market. However, with more than half of small businesses with over ten staff having had to dismiss a new recruit, largely because of that person's incompetence, reference checks should be the last part of the hiring process left to chance."