Even with the use of unequal size of partitions, there will be wastage of memory. In most cases, a process will not require exactly as much memory as provided by the partition.
For example, a process that require 5-MB of memory would be placed in the 6-MB partition which is the smallest available partition. In this partition, only 5-MB is used, the remaining 1-MB can not be used by any other process, so it is a wastage. Like this, in every partition we may have some unused memory. The unused portion of memory in each partition is termed as hole.
When a processe is brought into memory, it is allocated exactly as much memory as it requires and no more. In this process it leads to a hole at the end of the memory, which is too small to use. It seems that there will be only one hole at the end, so the waste is less.
But, this is not the only hole that will be present in variable size partition. When all processes are blocked then swap out a process and bring in another process. The new swapped in process may be smaller than the swapped out process. Most likely we will not get two process of same size. So, it will create another whole. If the swap- out and swap-in is occuring more time, then more and more hole will be created, which will lead to more wastage of memory.