New SEEK research: Hiring the wrong person is costing Australian small businesses approximately $7.3 billion per year
New research from employment marketplace SEEK has revealed that hiring the wrong person could be costing Australian small and medium-sized enterprises (SMEs) an estimated $7.3 billion per year.
Small businesses are the engine room of the Australian economy, making up 97% of all businesses and employing more than half of the private sector workforce***. But with the cost of doing business continuing to rise, and job applications sitting near record highs, many small businesses are being stretched for time and resources to find the right people to fill their open roles. In fact, nearly a third of SMEs (32%) report that it’s now harder to find the right person for their business**.
Surveying more than 950 small businesses across Australia and New Zealand the research reveals that one wrong hire – someone who was hired and didn’t match the expectations of the role – could cost an individual business around $16,000*.
The biggest contributor stems from staff turnover, accounting for more than half (55%) of the total cost. This includes additional recruitment costs, time spent rehiring, and the time spent onboarding a replacement.
Additional training and performance management costs make up a further 34%, reflecting the extra time invested beyond standard onboarding requirements. The remaining 11% comes from direct financial losses reported linked to a wrong hire's actions. Together, these findings show that hiring the wrong person for a role can carry significant costs across multiple areas for small businesses.
Helping employers cut through the noise and find the right person faster has become a critical priority for SEEK who are working to make hiring simpler, smarter and more efficient for small businesses across Australia.
Kylie Pascoe, SEEK’s Customer Insights & Research Lead, comments: “Finding the right people is vital to the success of any business and this impact is often felt more acutely in businesses with smaller teams. We also know that small business recruitment is often juggled alongside day-to-day business operations, which makes it even more important for these businesses to feel confident in their hiring decisions.
“The right fit is going to look different for every role and organisation - which is why SEEK continues to invest in tools that help make hiring easier for SMEs. We’ve harnessed 25 years of industry-leading expertise, insights and innovative AI-powered tech to make it as easy as possible to match the right people with the right businesses. We know that it’s the ideal outcome for everyone – from the individual worker, the business, and the economy.”
In response to the challenges facing small and medium businesses, SEEK has introduced a suite of product innovations, leveraging world-class technology and unrivalled knowledge of the Australian employment landscape to help employers find the right candidates, faster.
A stronger job ad means a more relevant applicant pool and a significantly better shot at finding the right person for the role. SEEK's AI job ad writing tool takes the guesswork out of attracting the right candidates, using AI and deep local insights to create more effective job ads in seconds.
For businesses that want to go one step further, SEEK’s Talent Search puts the power firmly in the hands of the hirer. Rather than waiting for applications to roll in, SMEs can proactively search SEEK's candidate database by simply describing their ideal candidate in their own words and connect with the right talent directly.
To take the guesswork out of reviewing applications, SEEK’s AI-powered candidate management tool can help SMEs shortlist candidates faster and with confidence using filters, screening questions, relevance sorting, and verified applicant information.
In a hiring landscape where the wrong decision can cost a small business thousands, having the right tools isn't just helpful. It's essential.
Pascoe comments: “We understand the crucial role that SEEK plays in supporting small and medium businesses. We are constantly investing in tools like SEEK’s AI job writing, Talent Search and AI-powered candidate management to make the hiring process easier, and we are proud that businesses are more than four times more likely to find the right person for their business on SEEK.”
For more information on navigating SME hiring challenges, visit SEEK Hiring Advice.
