Any business that succeeds does so because of the people working there, not in spite of them. If you run a small company you know this better than anyone. A regrettable hire can set your business back months, and a great one can spur growth like few other things.
Of course, finding and hiring the best people is easier said than done. It takes time and resources to make sure you’re reaching the right people for your open roles. And reaching them is only have the battle. If you’re trying to get somebody worth hiring, they likely have some options, so you are selling your company as much as they are selling their talent.
Given how competitive hiring top talent can be, small businesses find themselves at a disadvantage. You’re not going to have the resources of giants like Amazon or Google, and you’ll likely not be able to provide the same level of compensation as them either.
Despite this, things are not so bleak. There are plenty of things that small businesses can do to bring in top talent, and there are even some strategies you can take advantage of to get an edge on those huge companies.
Evaluate your place in the market
Self awareness is important. This is true on a personal level, and it’s also true for companies. Now is the time to take a sobering look at what your company has to offer. You need to be realistic about the talent you can attract. Don’t be a C student who only applies to Harvard.
First, get a grasp on the type of roles you need to hire for. You probably have an intuitive idea of this, but it’s important to know how your needs compare to the existing talent pool. If you need a lot of engineers and are located in San Francisco, be prepared for heavy competition. Conversely, if you’re located in North Dakota and you need a lot of engineers, you’ll face less competition, but the candidate pool will be much smaller.
Next, figure out what you’re able to pay for the roles you’re hiring and how that pay stacks up to other companies in your industry and location. Obviously if you’re at or near the top, you’re in good shape, but most companies aren’t afforded that luxury.
If you can’t match that top salary, remember that compensation is about more than just salary. Younger companies often compensate with stock options or other benefits like free lunches or unlimited vacation.
The distributed workforce question
A trend we’re seeing for growing businesses is the distributed workforce. What this means is every employee at the company works remotely; there is no office. This strategy is an interesting one and has plenty of advocates and detractors.
The benefits are substantial. Since the company doesn’t have an office, overhead is cut quite a bit. No need to pay rent or utilities. A company can then reinvest these savings in payroll, either hiring more people or paying the existing employees more.
Since there’s no office, employees can live anywhere. This benefits both the company and the employee. Companies with distributed workforces can recruit using a much wider net and aren’t restricted by geography. Since there’s no geographical restrictions on where an employee lives, they have the opportunity to make their salary much more valuable by staying away from real estate markets like San Francisco or New York.
Of course, the distributed workforce isn’t perfect. Remote teams can struggle with communication. It can be difficult to hold a meeting when everybody in the meeting is calling in from a different state. Depending on the type of business you have, this could be a potential dealbreaker.
Finding the talent
Now that you have a good idea of what talent level you can afford, and how you stack up in your industry, let’s take a look at how you actually find and identify the talent you’re looking to bring in.
Staffing and Recruiting Agencies
Staffing and recruiting agencies are great options for companies that don’t have the bandwidth to search for prospective employees on their own. If you employ the services of a recruiting agency, you communicate with them your hiring needs and they take care of identifying talent. They do all the outreach and bring in candidates as they find them.
Typically the process is quite collaborative as you will still be conducting interviews and making the final decision. However, they save you the time of screening everybody, so you only spend time with legitimate candidates.
There are two things to keep an eye out for when using a staffing or recruiting agency. First is cost. Generally, agencies charge a fee per hire. This could be anywhere from one month’s salary to one year’s salary of the employee you hire. So if an agency charges a fee that matches six months of your hire, and your new hire’s salary is $50,000, the fee you’ll owe the agency is $25,000. As you can see, this could potentially be a pricey option.
The other consideration when using a recruiting agency is you have to rely on the recruiter to screen candidates as you see fit. You run the risk that the headhunter might disqualify a candidate that ultimately would have been great for the role. The better the recruiter the rarer this is, but if you’re going to employ an agency, you must be comfortable sacrificing some autonomy.
Internal recruiting team
If you opt not to hire a recruiting agency, you’ll have to uncover talent yourself. Depending on your resources, you might hire one person to manage all early-stage recruiting, you might rely on your HR team as a whole to do it, or you could have your management team handle it.
No matter which way you go, you’re going to need to invest in some tools that help you find talent. Recruiting marketing software and applicant tracking systems are both highly effective.
Recruitment marketing tools enable you to post job openings and get them seen by people looking for work. With a recruitment marketing tool you can post job openings to LinkedIn and other job boards like Indeed or Glassdoor. It also enables you to promote your openings. This is a great way to find a match for one of your hard-to-fill roles.
Applicant tracking systems let you keep all of your candidate info in one place. If you’re hiring for multiple positions, this is a must have. It keeps you organized by showing you who’s applying for what role, their qualifications, and your interaction history with them.
No matter which option you choose for finding talent, you should make sure all of your employees are incentivized to recruit.
If someone in your organization meets somebody on an airplane that seems like a good fit for your company, that employee should have the means and motivation to try to bring that person in. Most companies have a referral program that rewards employees when they refer someone for a role and that person gets hired.
Selecting the best candidate
Identifying promising candidates is only half the battle. Once you’ve compiled a pool of talented people that you think are all qualified for the role, you need to select the best of the bunch.
Remember, this is not just about you selecting the best candidate, but also about selling the job to the best candidate. They are interviewing you just as much as you are interviewing them.
If you’re hiring technical roles, pre-employment testing should certainly be used in the interview process. There is pre-employment testing software which enables you to send tests to candidates. This is a common practice when hiring software engineers.
Essentially, you send them a coding test which they complete at home. When they finish, you can evaluate the results. This is likely the best way to get a grasp of candidates’ deep technical skills.
Hiring is a team-oriented task
There are always going to be multiple employees involved in the interview process. It’s crucial that each member of your hiring team has their voice heard. Different people have different perspectives, and blocking out one view might be the difference between a perfect hire and a nightmare.
It’s also not a bad idea to have each member of your hiring team focus on different aspects of the candidate. For example, you might have one interviewer focus on the candidate’s personality and how he or she might fit into the team. Another interviewer might focus on the candidates ability to work in a team, and the third interviewer can focus on the candidate’s technical skills.
By spreading out the responsibilities of your interview team, you decrease the chances of missing something major.
Your work is never done
So you’ve identified the best candidate for the role, made an offer, and he or she accepted. Congratulations, but your work is not done.
Employee retention is just as important as hiring. Some studies have suggested that losing an employee can cost your business up to 2x his or her annual salary. Obviously the cost of losing an employee depends heavily on role and replaceability, but it’s not something that should be taken lightly.
Institute regular check-ins with new employees, and if ever concerns are raised, make sure you have the processes in place to address them.