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Are small businesses’ recruiting processes hindering diversity?


Are small businesses’ recruiting processes hindering diversity?

Did you know the first recorded use of “birds of a feather flock together” was in 1545? Nearly 500 years later and this proverbial wisdom is arguably left unchallenged by small and medium businesses when it comes to their recruitment.

In the recruitment industry, diversity is quite often near the top of the agenda, but smaller businesses (and even some larger ones) who perhaps lack or have little in the way of recruitment resource quite often overlook diversity in favour of a quicker and easier recruitment process. Instead, they advertise jobs through limited means. This might be finding talent through their network, or advertising the role on their existing platforms. I’m talking, of course, about the the hidden job market and the effect it has on diversity.

The problem with small businesses

So, what drives the hidden job market and why do these businesses play into it? Firstly, there are many logical reasons to keep the search for talent as small as possible.

Recommendations from trusted contacts should, in theory, lead to a shortlist of the highest quality candidates. When a business of a certain size has an opening, quite often word of mouth forms the biggest part of their recruitment strategy.

The other driver of the hidden job market is the creation of roles when a suitable candidate appears.

These things in themselves aren’t wrong – they’re just bad practice. By default, the people you encounter using this way of hiring are already in your ecosystem or network in one way or another. In simple terms, you’re fishing in your own pond. And this can create serious repercussions not just for the diversity cause but for businesses too. That’s why those responsible for recruitment in smaller businesses need to have diversity at the forefront of their minds at all times during the recruitment process.

The problem for small businesses

Smaller businesses, as mentioned, lack specific resource for recruitment. The ‘hidden’ job market, therefore, offers them an easy, quick, and cost-effective way of finding the right person to fill a vacancy. While some may think of diversity during this process, the process in itself means that some potential candidates are already halfway up the ladder before others have even stepped onto the first rung.

There are many serious problems that this can cause for businesses beyond what your teams look like and believe. The diversity problem goes beyond these issues to cause serious shortcomings in business, culture, and economics. But how so?

A lack of diversity can affect a business’s operations and ability to produce good work that’s reflective of the consumer and the wider world. No matter how hard you try to be inclusive, a ‘closed’ method of hiring, such as reaching out to existing contacts, leads to a working environment devoid of diverse ideas and perspectives. In widening your search, you automatically welcome ideas and approaches into your office from further afield, which is essential in creating a thriving, modern business that challenges established practice.

Another issue that a lack of diversity can make businesses encounter is hiring a ‘lemon’. For those of you who have ever purchased a car, you’ll know that a ‘lemon’ is a car that is cheap to purchase, but needs a lot of work – and this only comes to light once the transaction has been made and the car hits the road.

Similarly, new recruits can be ‘lemons’. If an employer doesn’t search beyond candidates existing in their networks because they lack resource, they could be missing out on a higher calibre of candidates. Instead, they’re left to pick the best possible from a small pool, none of which may be a perfect fit. And as any recruiter, manager, or business owners know, employees who aren’t a right fit can drain time, money, and resources, especially if they decide the job is not for them. This way, using diversity as a driving force, your recruitment strategy can not only help you to achieve better representation, but to achieve better results for your business.

Overstating the issue?

‘Hidden’ ways of hiring aren’t black and white, especially when we consider how difficult recruitment can be from a small business’s perspective. Principally, it’s a way of cutting out potentially unnecessary bureaucracy and reducing costs whilst still arriving at the objective of hiring a new employee. Moreover, it mustn’t be forgotten that at the heart of ‘hidden recruitment’ is the fact that this is simply the process of networking and meeting new contacts.

One of the problems with denouncing this way of hiring people is that it is simply too difficult to quantify exactly how many jobs could be classified as ‘hidden’. In some cases, there may not have been a conscious decision to hire internally or through existing contacts, but quite simply the right candidate presented themselves through these means.

That said, even if its existence is exaggerated, the hidden job market certainly exists and efforts need to be made in addressing its effects on diversity in our small businesses. As industry leaders, it’s our role to influence the way we approach recruitment. The solution is not a ban or prescribed third-party advertising, but open dialogue around how we can help those who lack resource to achieve more inclusive teams and the benefits a diverse team will give them.

Safaraz Ali is the founder of Pathway Group, an established education, recruitment, training and welfare to work provider. His upcoming book, Canny Bites: 52 bites of business wisdom for leaders and entrepreneurs, will be available from


I am the founder of Startup Today. I am the main writer and have put in many hours of work into creating this blog. If you want to find out more about me then lets get in contact.

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