Why do small businesses really struggle to hire?
Some could say it’s about costs. Some could even say it’s about competition. But most times, people don’t understand that it’s about access, access to the right people and the right hiring approach. Many small businesses have the work, the ambition, and the growth potential, but when it comes to building a team, they often find themselves failing woefully on that front.
In June 2025, a National Federation of Independent Business (NFIB) report found that 36% of small business owners had unfilled job openings, a slight increase from May. Nearly half of those surveyed also said there were few or no qualified applicants for the roles they were trying to fill. That means even when opportunities exist, the right talent isn’t always showing up, or when they do, they’re quickly taken by larger companies offering higher pay, flexible work setups, or more attractive benefits.
The hiring space has changed drastically over the last few years. Job seekers now have more options, remote work has expanded the competition, and the expectations of top talent have evolved faster than most small businesses can keep up with. What used to be a simple process, posting a role, conducting interviews, giving an assessment, and making a hire has now become longer, and far more complex.
In today’s article, we’re going to explain in simple, practical terms why small businesses struggle to hire, how to uncover the issues behind those challenges, and share real ways to fix them, so you can grow your business smarter, without exhausting your hiring budget.
The Hiring Reality for Small Businesses
Hiring has become one of the biggest challenges small businesses face today, and not for lack of trying. Most founders and HR leads are doing everything they can such as posting roles across multiple platforms, offering flexible hours, even adjusting salaries. But despite all that effort, finding the right talent feels harder than ever.
Part of the issue lies in how much the job market has shifted. The rise of remote work means small businesses aren’t just competing with companies in their city anymore, they’re competing with global employers who can pay more and offer better benefits. Candidates now have more control than ever, and they know it.
Another problem is speed. The best candidates are off the market in days, but small businesses often take weeks to review CVs, schedule interviews, conduct assessments and make decisions. By the time they’re ready to move forward, the candidate has already signed elsewhere.
Then there’s the skills gap. Roles in marketing, tech, and design are evolving so quickly that even experienced teams struggle to identify what’s current and what’s outdated.
Combine all these factors, and it’s easy to see why so many small business owners say hiring has become a losing game, it’s more competitive, and more time-consuming than it’s ever been.
The reality isn’t that small businesses can’t find good people, it’s that the hiring system isn’t built for them anymore. But with the right approach, that can change, and that’s where we’ll start next.
Why Small Businesses Struggle to Hire
When it comes down to it, most small businesses don’t struggle because they lack effort, they struggle because the hiring space is stacked against them. The problem isn’t one single thing; it’s a combination of factors that make it hard to attract, evaluate, and retain good people.
Let’s break it down.
Limited Budgets and Benefits
Small businesses rarely have the financial capacity to match what larger companies offer. Competitive salaries, health benefits, training programmes, and flexible work packages all come at a cost. When candidates compare offers, it’s hard for a smaller company to compete, even if the role itself is more interesting or impactful.
Great talent will often choose security and higher pay elsewhere, leaving small businesses to settle for whoever’s available instead of who’s best suited.
Narrow Talent Pool
Many small businesses limit their search to local candidates, which instantly reduces their chances of finding the right person, and even when they do widen their reach, their job posts often get lost in a sea of listings from bigger brands & competitors with stronger employer reputations.
This creates a cycle where small businesses think there’s “no good talent out there” when, in reality, they’re just not fishing in the right pond.
Slow or Inconsistent Hiring Processes
Small business hiring often lacks structure. Without a dedicated recruiter or streamlined system, hiring becomes a side task for already-busy founders or managers. Job descriptions are poorly written, and interviews are poorly conducted.
The problem with this is that top candidates move fast. In this market, the best applicants are usually off the table within a month. A drawn-out hiring process signals unseriousness and can cause great candidates to lose interest.
Lack of Employer Branding
Candidates judge companies before they apply. They look at your website, LinkedIn, Glassdoor and online reviews. If what they see feels uninviting, they’ll assume the experience will be the same.
Large companies invest heavily in employer branding, showcasing their culture and success stories. Small businesses, meanwhile, often underestimate how powerful a good reputation can be. A lack of visibility makes it harder to attract skilled professionals who want to work somewhere credible and inspiring.
The Skills Mismatch
Technology, marketing, and design roles evolve rapidly. What was a top skill last year might be outdated today. Many small businesses either hire for the wrong skills or don’t know exactly what’s needed to achieve their goals.
This mismatch costs both time and money, and makes business owners more hesitant to hire again.
The Cost of a Bad Hire
For small businesses, one wrong hire can set back progress for months. Unlike large corporations with the budget to absorb mistakes, a single hiring error can affect productivity, and team morale. That fear often makes business owners overly cautious, stretching the process out even further.
Competing Priorities
For small business owners, hiring isn’t the only task on the table. They’re managing clients, operations, finances, and everything in between. With so much to handle, recruitment isn’t a priority until it becomes a priority, and by then, it’s usually rushed.
The Solution
So how do you fix a traditional hiring system?
The answer is to hire smarter.
Small businesses don’t need to mirror how big companies hire. They need to find models that work for their size, and budgets. That means rethinking where and how you source talent, how you manage hiring processes, and what kind of teams you build.
Here’s how to start.
Rethink How You Source Talent
Most small businesses limit their search to who’s nearby, but talent today isn’t defined by geography. By expanding your reach beyond your local country, you open up access to skilled professionals around the world, often at a fraction of the local cost.
Offshore hiring, for example, allows you to build a reliable team without the overheads that come with full-time, in-office staff. You can find qualified marketers, designers, or administrators who work remotely but function as an extension of your local team.
When you stop thinking “local” and start thinking “global,” the talent gap suddenly becomes an opportunity.
Focus on Skills, Not Location
The future of hiring isn’t about where someone lives, it’s about what they can deliver.
Many small businesses waste months looking for local candidates when there are equally qualified professionals overseas ready to work full-time, or part-time. By focusing on skills, experience, and fit rather than locality, small businesses gain access to a much larger and more diverse talent pool.
This approach also saves money. Offshore staffing agencies such as Arwana can reduce staffing costs by up to 60%, allowing small businesses to reinvest those savings into growth.
Streamline Your Hiring Process
A good candidate experience can be the difference between hiring quickly and losing talent to competitors. Keep your process clear and efficient, write detailed job descriptions, and communicate timelines.
If you don’t have the bandwidth to manage that internally, consider working with an offshore staffing partner like Arwana. They can handle sourcing, vetting, and initial interviews so you only meet qualified, ready-to-hire candidates.
Use Flexible Hiring Models
Not every role requires a full-time hire. Sometimes you need part-time help or a specialist for a few projects each month. Flexible hiring models allow you to scale your team based on workload.
For example, many growing businesses start with part-time offshore employees like a marketing assistant or designer, and expand to full-time once revenue supports it. This approach keeps costs predictable while allowing your business to move faster.
How Offshore Staffing Helps Small Businesses Win
For many small businesses, the problem isn’t that there’s no talent, it’s that the right talent is out of reach. Offshore hiring changes that.
Offshore hiring allows businesses to access a global pool of skilled professionals in marketing, tech, admin, and design often at a fraction of the cost of hiring locally. You get the same quality of work, the same professionalism, and often a higher level of commitment, without the overhead cost.
At its core, offshore hiring helps small businesses overcome three key challenges:
- Cost: You can hire full-time or part-time staff without paying high local salaries.
- Speed: Offshore partners work at an insane rate, meaning you can fill roles in days instead of months.
- Flexibility: You can scale your team up or down depending on your workload or budget.
That’s exactly what we do at Arwana. We help UK-based small businesses build skilled offshore teams across marketing, tech, design, and admin, saving them up to £20,000 a year in salary costs. Whether you’re hiring part-time or full-time, our process guarantees you get reliable, vetted professionals who work as an extension of your local team.
Conclusion
Hiring has become one of the biggest pain points for small businesses, but it doesn’t have to stay that way. The problem was never a lack of effort; it was a lack of access. Access to the right people, and the right approach.
Small businesses don’t need to compete with big brands on salary or scale. They just need to think smarter with flexibility, and the willingness to look beyond their country. Offshore hiring makes that possible.
By working with Arwana, you can tap into a global network of skilled professionals across marketing, tech, admin, and design. We handle the vetting, onboarding, and management support, so you don’t have to.
You don’t have to spend months searching or pay thousands in recruitment fees. You just need the right team, built the right way.
If you’re ready to grow your business without breaking your budget, book a discovery call with Arwana today, and find your first offshore hire.
Because the right people aren’t out of reach. You just haven’t met them yet.
