growth and turnover impacts SMBs

The SMB Hiring Trap: The 2-Month Crisis (Part 1)

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Keith Dragon

A 3 Part Series

There are two situations when hiring creates panic for a small business owner.

The first is the one we all dread. The email lands in your inbox, “My Last Day…” A key employee has just given their two weeks’ notice.

The second is the one we all dream of. You land a new contract. The business has suddenly grown to a point where the need for a new role is immediate—in fact, it was required yesterday.

For a large organization, both scenarios can be a routine administrative event. For a Small or Midsized Business (SMB), it is watching the start of the dam leaking without enough people to stop it from growing.

As an SMB owner, I always felt uniquely vulnerable during the hiring process. It wasn’t just the stress; it was the leak or “gap.” The gap between the moment I needed someone and the moment a capable person was finally in that role. Whether I was reacting to a resignation or trying to get ahead of growth, it typically took me several weeks to two months to fill a role.

It turns out, this feeling isn’t just an anecdote; it’s a documented, structural vulnerability.

The 44-Day Opportunity Gap

My “weeks to two months” feeling wasn’t paranoia. Recent data from the Society for Human Resource Management (SHRM) shows the global average time-to-hire is 44 days.

Now, let’s look at the 44-day gap:

  1. The Turnover Gap: Your employee gives 10 business days of notice. The day you post is when the clock to fill the role starts. At that point, you are facing that minimum of 44 days with an empty role. During that time the organization is losing productivity, team burn out increases, and customer service begins to take a hit.
  2. The Growth Gap: You land a new contract that needs attention now. The 44-day clock starts. For over a month, the entire organization is unable to execute with the same quality. You risk tainting the new relationship, destroying team morale, and stagnating success before it can even start.

This is the SMB’s core fragility: The 44-day gap means you are too slow to stop the dam leak and too slow to capitalize on an opportunity.

The Leadership “Time Suck”

Here’s the hidden cost that makes the 44-day gap an even more painful leak. In a large company, a dedicated HR department handles sourcing. In an SMB, the hiring manager is the owner, founder, or a high-performing employee.

This creates a cruel irony:

  • When reacting to turnover, the best people equipped to fix the problems are pulled away from their duties to do more administrative work.
  • When trying to grow, the people who drive and create growth are forced to limit high-value work (sales, strategy) to sift through resumes.

The very act of managing this problem forces the business into chaos, which increases as time goes by.

The “System” Trap and the 89% Opportunity

In this moment of panic, we do what we’re told: we outsource to “systems” (or tools) for help. We hire recruiters or buy AI-powered sourcing tools, hoping for a magic bullet.

But this is where many SMB leaders feel more of the “gap“. These systems are brilliant at matching keywords and resumes. They’re built to solve for specific tasks, but they fall short on what is truly needed.

A landmark study by Leadership IQ that tracked 20,000 new hires found that technical skills are only a small part of the equation. It revealed that 89% of hiring failures were due to attitudinal problems (like coachability or alignment with values and vision), while only 11% failed due to a lack of technical skills.

This isn’t a failure of the systems; it’s a misunderstanding of their function. The systems are built to find people who have the skills, but they can often miss finding the right fit. Instead of falling into that gap, a powerful opportunity for SMB leaders is to personally own the critical “fit” problem.

The Vicious Cycle That Leads to Burnout

Without a plan and without a partner, the SMB is stuck in a vicious, reactive loop.

  • The Turnover Cycle: An employee leaves. The team is overworked. The boss is distracted. The hiring process is slow. The top candidates are lost. The team sees the chaos, and the A-Players start to refresh their own resumes. The worst scenario would be one resignation starts to trigger a chain reaction.
  • The Growth Cycle: A new client contract is signed. The team is instantly overworked. Leadership is distracted. The hiring process is slow. The top candidates are lost. A-players, who were excited about the new contract, are now drowning. The result of growth has the potential to create burnout and turnover.

This is the SMB hiring trap: too slow to react to a need and too slow to capitalize on opportunity. The game becomes reacting instead of creating strategies for growth.

A Potential Solution: The Partner vs. The System

Here’s the reality (problem) that is generally glossed over: an outsourced individual or generic system can’t understand the uniqueness of your organization.

However., a true partner—whether internal or external—can help you plan to find the right person to fill a role, define the real needs of the job, and build a hiring plan before the dam starts to break apart.

This planning cannot be outsourced to a system, and it’s opportunity to “do it right” before outsourcing. This can be done in two simple steps:

  1. Defining the Requirements In-house: By combining the organization’s core values (vision & mission) and integrating those into a job description for the role – leaders can create their own roadmap for success.
  2. Finding a True Partner: By elevating a recruiter from just using a “system” – to being a valued “partner” is the start. This means you don’t just send them a job description; you teach them what the values, vision & mission, and the attitudes are that define success in your organization before you even send them the job to post.

Conclusion – Implementing Change

The only way to get through this is to change the rules and find waypoints to implement the 1° changes to achieve the goal. Leaders must find a way to stop reacting and start planning. Part of that planning is defining what inevitably needs to be done in-house.

In this case, for the job itself it is: revisiting the vision & mission while creating the job description to be inline with the organizations current needs. Equally important is planning and adapting the day-to-day operational responsibilities across key employees, acknowledging and dealing with the stress, chaos, and burnout that rears their ugly heads.

It comes down to recognizing where you are in the moment and the filling this gap through small changes.

In Part 2, we explore how to stop the cycle with a shift from a reactive mindset to a proactive culture by focusing on valuing human capital.

References & More Reading:

Time-to-Hire and Losing Top Candidates

“Fit vs. Skills” (The 89% Statistic)

HBR/McKinsey Concepts (Culture, Bias, Diversity)

Overall SMB Hiring Challenges

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