With the unemployment rate remaining low and employers competing hard for the same pool of available talent, small businesses are scrambling to implement more effective recruiting techniques to fill empty posts. There’s room for improvement in recruiting, and attracting the right employees while luring them away from competitors is crucial to the bottom line and long-term health of these small businesses.
For proof, consider the hard numbers: A 2017 CareerBuilder survey found that businesses lose an average of $14,900 on every bad hire, with 74% of employers admitting they've hired the wrong person for a position at least once. Once that person is gone, employers end up spending the equivalent of six to nine months of a worker’s salary in order to recruit and train their replacement, per a Society for Human Resource Management (SHRM) study. And, even if they get the hire right, chances are that person could be moving on soon. Adtaxi data reveals that 52% of American workers plan to search for a new job in 2019.
These are compelling reasons why it’s so important to execute winning strategies for enticing the right job applicants, especially if yours is a small company. Ask the experts and they’ll tell you that, particularly in this employment climate and robust economy, you have to be willing to think outside the traditional HR box and try new approaches if you want to succeed in your hiring goals.
Good hiring takes time
Hiring is an issue that is expected to impact almost one third of small businesses this year, with the MetLife & U.S. Chamber of Commerce Small Business Index finding that 29% of small business owners—particularly of businesses with 20 or more employees, veteran-owned businesses, minority-owned businesses, and millennial- or Gen-X-owned businesses—saying they plan to increase staff.
Emily Schlaudecker, human resources (HR) advisor for Mammoth, an HR consulting company, said small businesses can’t afford to paint by numbers when it comes to recruiting schemes.
“Turnover is costly, and, even if you’re adding a new position to your company and not dealing with high turnover, hiring will cost you—not only in dollars and cents but in its impact on company morale and efficiency,” she told CO—. “Investing the time in a hiring strategy that identifies worthy candidates who meet your business needs is not only great for productivity, but it will be good for the bottom line.”
The key word here is “time,” which employers need to spend more of in the recruitment process for better results. “It’s better to invest slightly more time into finding the right person than rushing a hiring decision only to have to repeat the process again in six months,” said Schlaudecker.
Jason Patel, founder of Transizion, seconded that sentiment.
“A small business owner’s margin for error is inexorably small. Planning for and recruiting the right talent is critical because these hires will become major players in your business roles, operations and capacity for profitability,” said Patel. “Conversely, the wrong talent can set you back and force you to spend time in non-growth areas of your business. Talent should almost never be an impediment for growth, and that’s doubly so for small businesses.”
While recruiting and hiring has always been challenging, that’s especially true now, said Schlaudecker. “Unemployment is near an historic low, and, once hired, employees are less likely to stay in a job where they’re unhappy or unengaged because jobs are readily available.”
Case in point: Half of millennials surveyed by Gallup said they’d think about taking a job with a different employer for a raise of 20 percent or less.
Adding to the difficulty here is that many small businesses often get outhustled by more aggressive and recruiting-savvy rivals.
“Most small business owners have never developed the skills to compete in the online jobs marketplace. They understand that they have to market for their customers but miss out on marketing to prospective employees. The internet levels the playing field, but many small businesses haven’t properly embraced the tools and technology,” said Ryan Englin, founder and CEO of Core Matters.
Talent should almost never be an impediment to growth.
Jason Patel, founder of Transizion
Innovative HR approaches
To boost recruitment efforts, small businesses can look to the latest trends and tactics in the industry. For starters, reconsider who is responsible for attracting and hiring employees.
“That means taking time to define an organizational workflow for recruiting and hiring,” said Schlaudecker.
Sharon Hulce, president and CEO of Employment Resource Group, said you can, of course, assign these tasks to a designated human resource professional, whether it’s a full-time, part-time or outsourced person.
“In a small business today, the owner or president must be involved in final hires,” said Hulce. “Culture and values are driven into an organization from the top down, so it’s imperative that your president, CEO or owner at least approve final hire, especially if you want to attract and retain the best and brightest.”
It’s also smart to involve the rest of your leadership team in the process, too.
“Your HR manager can be a point of contact for placing job ads and ensuring the established recruiting process is followed,” Schlaudecker said. “But, ideally, a separate hiring manager or recruiter should be invested in creating the job description and helping the HR manager identify key qualifications.
Some believe that recruiters are a luxury that small businesses can do without nowadays. Others insist that using an in-house or outsourced recruiter is a good option for particular hires.
“Recruiters are still necessary for very specific positions. A small business looking to add to its leadership team or find someone with a very niche skillset becomes difficult if you don’t have someone specifically targeting them,” Englin said.
Other ways to ‘woo’ workers
Another recruiting tactic gaining steam is more prominently stressing your workplace culture.
“Promote the company culture first. Studies show that today’s employees want more than a paycheck. They want purpose and to be working on something they believe in,” said Englin. “Most small businesses have a great purpose—they just don’t promote it enough.”
As a twist on the trend, hiring for culture contribution versus culture fit is being adopted by more employers, too.
“Ask yourself, ‘What skills does the team with the job vacancy already have?’ Hiring someone who is a superstar in an area where a company population is lacking and empowering that new employee to share knowledge, skills and abilities will benefit everyone,” said Schlaudecker.
Of course, technology is being increasingly employed to aid in recruitment as well.
“Using algorithms and heuristics to sort applicants based on keywords and past experiences is a strong trend,” said Patel.
Recruiting via social media is another method picking up momentum. Using your company’s Facebook page, Twitter account and other social platforms to spread the word about job openings and benefits can be a wise way to attract prospects.
Tips to tempt, tap, and keep talent
To better attract, hire and retain desirable employees, consider these additional suggestions:
- Know exactly what kind of help you need. “Determine what kind of candidate would best serve your business needs,” said Patel. Write down all the qualities that your ideal candidate would possess, then craft a concise job description that you’ll post online.
- Encourage referrals from current staff. “Incentivize employees to refer their friends and connections,” Schlaudecker said.
- Create a unique workplace experience and culture. “This begins with the first interview through onboarding and integration into your company,” said Hulce. “A talented hire can work anywhere, so you need to keep them excited about choosing you.”
- Tempt them with an outstanding benefits package. “From cell phone reimbursements and a company vehicle to Seattle Mariners tickets and tuition reimbursement, our company offers many incentives beyond regular compensation,” said Vincent Sposari, franchise owner of Mr. Rooter Plumbing, a Neighborly company. “In our industry, it’s challenging to find qualified technicians, so we focus on providing things like free training, a 401(k) with 15 percent average matching contributions, a sales bonus that tops out at $500, and more.”
- Spend the necessary time properly onboarding, training and developing your new employees. A Gallup poll revealed that only 12% of workers feel strongly that their employer does a great job onboarding new hires. And, businesses with strong learning cultures yield 30-50% higher employee engagement and retention rates, per Deloitte.
- Make your new hire—and all employees—feel special. “Happy and industrious employees crave a sense of community. Having a job where employees feel valued and a part of something greater than themselves is the key to retention,” said Schlaudecker.
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