In the scramble for growth, small and mid-sized companies are obsessed with speed to hire. They hire recruiters, launch job ads, and rush through interviews, but the needle on business outcomes barely moves. What’s going on?
The root of the problem isn’t talent scarcity. It isn’t volume of applicants. It’s a flawed talent operating model, and a culture that confuses activity with impact and administrative HR with strategic people operations.
Data shows that most small businesses struggle just to fill open positions, let alone align hiring with strategic goals. Nearly two-thirds of small business owners report hiring challenges due to limited qualified applicants, competition on compensation, and lack of resources.
Meanwhile, foundational HR teams in these businesses often spend 36% of their time on back-office tasks and compliance - not strategic workforce planning.
This structure creates a paradox: companies care about growth and talent in principle but lack the operational framework to tie talent decisions directly to business outcomes, and they don’t think about succession plans until catastrophe strikes.
The center of the disconnect as I see it.
Too often, companies equate HR with people/talent strategy, when in reality:
- HR historically focuses on compliance, payroll, benefits administration, and employee relations.
- Recruiting focuses on sourcing and filling roles.
- People Operations focuses on integrating workforce strategy with business outcomes, from hiring all the way through retention.
In many SMBs, HR teams are still buried in administrative tasks, leaving little time to drive strategic workforce planning. This explains why less than 1% of annual revenue is often
allocated to HR technology, even though talent acquisition and retention are
top strategic priorities for most CEOs.
This structural confusion creates a mismatch: leaders expect talent to drive growth, yet their organizational design commoditizes the people function.
When Hiring Isn’t Tied to Outcomes, Everything Else Suffers.
A recruiter can find resumes. HR can manage compliance. But if neither function is connected to:
- company strategy
- performance outcomes
- structured assessment of skills and impact
- competency frameworks rooted in business goals
Hiring becomes transactional rather than transformational.
The real cost is measured not just in dollars spent, but in lost momentum, culture erosion, and strategic paralysis.
This is consistent with research showing growth stage companies repeatedly struggle with hiring qualified talent and retaining them - yet often lack the tools and frameworks to track key
performance indicators that connect talent decisions to business success. I have seen these companies buy or build tools to try and solve it, but systems without process is just automated chaos.
The Hard Truth (And the Opportunity for Growth)
The belief that hiring is simply a function of volume or speed is holding companies back. Talent scarcity isn’t the problem - operational clarity is.
Leaders must acknowledge that:
- HR compliance and recruiting are necessary but insufficient.
- Strategic hiring requires integrated people operations.
- Without connecting talent decisions to business outcomes, companies will continue to struggle - even when they “fill the role.”
The question isn’t how many recruiters you have - it’s whether your talent systems are designed to drive business results.
A Better Operating Model Starts with a Shift in Mindset
If you want hiring to truly fuel growth, stop treating talent functions as support activities and start treating them as strategic drivers.
That means:
- Defining the impact expected from every role (not just executive roles)
- Developing competency and performance criteria tied to business goals.
- Measuring hiring success not by time-to-fill but by quality-of-hire and outcome alignment.
That’s what separates HR compliance from strategic people operations - and that’s why some companies scale while others plateau. Because the future won’t belong to companies with better recruiters - it will belong to those that build better talent operations enablement.
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Sources:
https://www.nfib.com/surveys/small-business-economic-trends/
https://www.uschamber.com/small-business
https://www.gartner.com/en/human-resources
https://www2.deloitte.com/global/en/pages/human-capital
https://business.linkedin.com/talent-solutions/resources/talent-strategy