In the heart of the Philippine economy, micro, small, and medium enterprises (MSMEs) are often described as the backbone of the nation. For the entrepreneurs running these shops, bakeries, and service firms, that title carries a heavy burden.

Every person they hire is a crucial decision because, in a small team, there is simply no room for a passenger. When a company operates with only a handful of employees, one bad hire is not just a human resources headache; it is a financial disaster.

Recent industry data reveals that a single hiring mistake can cost a business an average of ₱740,000. For an MSME relying on strictly limited resources, that is an amount that can break a company’s future.

Despite how much is at stake, many local business owners still treat hiring as casual, almost accidental process. A joint study by the Department of Trade and Industry (DTI) and Boston Consulting Group (BCG) recently revealed the persistent trend where recruitment among MSMEs remains largely informal.

Most owners rely on what is cheap and familiar, such as walk-in applicants, social media posts, or word-of-mouth referrals from friends and family. While these methods feel easy and cost-effective on the surface, they rarely lead to the best long-term results.

Formal channels like online job portals, university partnerships, or local agencies are used much less often, which leaves many small businesses vulnerable to poor fits and operational gaps.

The biggest risk of this informal approach is not just finding someone who lacks the right skills. It is the growing threat of outright deception. More applicants are using fake degrees, exaggerated experience, or fabricated credentials to get through the door.

Experts project that by 2028, one out of every four job applications could contain some form of fraud. This is a problem for small businesses that lack the time or specialized staff to verify every claim on a resume.

When a business owner realizes six months into a contract that their new manager lied about their background, the cost of fixing that mistake can be paralyzing.

Dannah Majarocon, managing director of Jobstreet by SEEK, has seen how these “fraudulent hires” hit small businesses the hardest.

“Fraudulent hires have always been a challenge to many companies ever since, and it hurts businesses, especially MSMEs that operate on limited resources,” she explains.

Majarocon is pushing for a shift in how these entrepreneurs approach their workforce. “We encourage hirers to leverage professional employment channels, free and easy-to-use job platforms with wider talent pools to minimize the risks of hiring mismatched candidates, or worse, fraudulent applicants,” she adds.

The goal is to move away from guesswork and toward a system that actually protects the employer.

To help bridge this gap, Jobstreet by SEEK launched a campaign called “SMEasy sa Jobstreet.” It focuses on giving small business owners actionable insights and practical strategies they can actually use without needing a massive HR department.

The initiative shows real stories from entrepreneurs who have successfully scaled their businesses by changing how they hire. Owners like Jas Marfil of Crusted Pizza and the teams behind Bona Vita Philippines and 1919 Chocolate have all shared how professional tools helped them find people who actually align with their vision.

These are hands-on owners who realized that their growth was being limited by the quality of their recruitment and that “building winning teams from the ground up” requires more structured approach.

Jethro Cerezo, CEO and founder of the Jethro Cerezo Executive Team, is one of those owners who believes the right people are the ultimate factor in a company’s success.

“Getting the right people is crucial because they are the make-or-break of the business,” Cerezo says. He notes that using a professional platform has made his organization better because it allows him to find quality talent quickly.

For many of these entrepreneurs, the transition to professional platforms helped them connect with candidates who had the right qualifications and also fit the company’s culture and long-term vision. This alignment is what supports sustainable business growth rather than just temporary staffing.

When a hire fits the culture, they stay longer, they work harder, and they help the business owner reclaim their own time to focus on expansion rather than constant retraining.

The shift toward professional hiring is essentially an evolution of trust. In the old model, a business owner trusted the person who gave the referral. In the new model, they trust a system designed to verify skills and backgrounds.

For the MSME sector to move forward, owners have to start seeing professional recruitment tools not as a corporate luxury, but as an essential insurance policy. The cost of a bad hire is no longer just an abstract concept; it is a quantified financial risk of nearly three-quarters of a million pesos.