The Small Business Guide to Recruiting and Hiring #DreamSmallBiz

By Business.com Editorial Staff
Business.com / Hiring / Last Modified: February 22, 2017

Recruiting for a small business has advantages over big companies, like flexibility and less bureaucracy, making "small" a selling point.

Sure, big companies can offer benefits and brand recognition, but being small has many advantages in hiring and could be your selling point in recruiting.

Small businesses have unique advantages over big brands.

Plus, all companies started small at some point.

Related Article:4 Hiring Metrics That Will Make A Difference This Year

Recruiting and hiring for a small business can offer plenty of advantages over large companies and big brands.

These include:

  • Less bureaucracy and less paperwork; not having to adhere to strict policies and procedures. Not subject to many federal rules.
  • Setting less traditional hiring policies, more control over the hiring process
  • Hiring temps and contracts employees with fewer hurdles
  • Being involved in all aspects of hiring. Being your own HR department means you have the final word and have a better understanding of what the job entails, because, chances are, you've probably done that job yourself at some point

You can offer your employees:

  • A flexible schedule
  • Perks like bringing your pets or kids to work
  • Telecommuting/working from home
  • More hands-on training
  • Faster career advancement
  • More personalized, less traditional, "family-like" work environment and company culture
  • More job diversity and positions tailored to their needs

Small Business Is Big

The Small Business Association (SBA) posted some stats related to current small business trends, including:

  • 28 million small businesses in the U.S. account for 54 percent of all U.S. sales
  • Small businesses provide 55 percent of all jobs
  • More than 600,000 franchised small businesses in the U.S. account for 40 percent of all retail sales and provide jobs for some 8 million people
  • The small business sector occupies 30 to 50 percent of all commercial space, an estimated 20 to 34 billion square feet

While corporations are downsizing, the rate of the small business startups has grown, while their failure rate has decreased. According to SBA:

  • The number of small businesses in the U.S has increased 49 percent since 1982
  • Since 1990, as big business eliminated four million jobs, small businesses added eight million new jobs
  • Small business hiring trends

Jobvite's "2015 Recruiter Nation Survey" revealed a few interesting, though unsurprising, facts that apply to small business too:

  • 69 percent of recruiters have had to increase salary offers due to negotiations
  • More than half of recruiters say lack of qualified talent is their biggest obstacle
  • Only four percent of recruiters don't use social media as part of their efforts
  • 78 percent of recruiters find their best candidates from referrals

The jobs report released last March by the National Federation of Independent Business (NFIB) indicated that 48 percent of small business owners were hiring. It also reported that small business owners indicated that "finding qualified workers is the third 'single most important business problem' behind taxes and government regulations and red tape."

NFIB's chief economist William C. Dunkelberg, who offered some comments on the report on the Federation's website, also noted that, "Workers are being disqualified for positions because of their social skills, appearance, and attitude as often as poor work history and a lack of specific skills."

Small Business Recruiting Tactics

So, how should you handle hiring for your small business in a way that competes with the big business? In a nutshell, make "small" a selling point, be honest, and don't over hire and underpay. Below are some tips and ideas.

1. Know who you are.

Define your core values and your team culture and communicate it clearly to a candidate. Are you willing to tolerate less-than-stellar communication skills? If not, you can't hire someone who submits reports with typos. Would you stand tardiness? Be aware of what is most important to you and your company, and don't compromise.

2. Know your bottom line.

Do you have the revenue to support more hires? Be honest with yourself: If you don't have the cash flow you probably shouldn't be hiring anyone.

3. Make sure there's a definite need for a new hire.

Would a temp suffice instead? Should you consider a contract employee on a temporary basis? Do you absolutely need to hire a new employee? Consider temp-to-perm, with a probation/trial period of three months; or an intern.

4. Don't wait till you need to hire; have a hiring plan.

"Guess what: two weeks is not enough time to find and train a replacement," writes Jean Tang in a Forbes article about lessons learned from Goldman Sachs 10,000 Small Businesses accelerator class. "Hiring in desperation leads to desperate hires."

John Rossheim, Monster Senior Contributing Writer, suggest devising a strategy and sticking to it. "Make an employee recruitment strategy for next month, next year and well into the future. And make that plan right now," he writes.

He also suggest that you should just assume that you may be growing in near future, and the market will be evolving, so, in anticipation, plan to hire at least one more person as a result, otherwise you may end up piling more tasks on your current employees.

5. Don't underestimate your needs.

"In the absence of a solid strategy, I've shopped more for a body in the seat than an agile and roving brain," writes Tang. If you need an amazing multi-tasker, who can also work on weekends and travel, look for that person till you find him or her, settling for less may hurt your business.

6. Define the position and write a precise job description.

According to Dana Dratch, who offered excellent hiring tips in her article for Bankrate, this is for both you and the new hire. That way, you will know what skillset to look for in a candidate, and they will have clear expectations of what he or she will be doing. What are your must-haves? What would you compromise on?

7. Always have recruiting in mind.

Keep an eye out, even if there's no immediate need. Poaching from a direct competitor may not be the best idea, but if you know of someone who may be a great fit, do let them know you're interested.

8. Be aware of what the competition does.

Not sure how much to offer? What to put in the job description? Look to your competition, at what they're doing, what their ads contain. You can easily access them on online job boards, LinkedIn, and company websites (look for "Careers" or similarly named section).

9. Make "small" a selling point.

Sell the environment of your small business and the perks like flexible schedule or working from home. Can your employee bring his or her kids or pets to work? Take more time off than a big company would normally allow, when needed? You are not bogged down by policies and regulations as much as the larger companies. Show off your company culture.

10. But be honest.

If you are hiring temp-to-term, with a trial period, do disclose that during the interview. Don't oversell your company of any aspects of the working environment. Understandably, you want everyone to be happy, to stay, and to love your company as much as you do, but be completely transparent with what the job entails. In other words, don't overstate the day-to-day duties, or promise perks you can't deliver.

11. Be a good employer.

Don't over hire and under pay. Good people are hard to find and especially hard to keep. If you keep your employees over worked and under compensated they will treat their job as temporary and will always be on the lookout past the "hiring honeymoon" for a better offer. This retention issue would slow you down, and can be expensive and demoralizing in the long run.

12. Emphasize the appeal of your company.

In a small company, an entry-level employee can advance to a mid- or senior level quicker. If that's the case in your company, do convey that during an interview.

A Wall Street Journalguide to hiring for small business notes that it's important to figure out what would sound attractive to new hires. "If you're hiring an executive, that person is usually going to want equity in exchange for the risk," advises the article, "For a middle manager, you have to convey that your company has staying power. For entry-level workers, you should show that there are opportunities for growth."

13. Don't forget to onboard.

Allow time for new hires to come onboard and reach their full potential. Rossheim quotes Tim Slattery, CEO of Corporate Fulfillment Systems, who shares: "It probably takes six to 12 months to get a salesperson up to speed."

14. Minimize disruptions for clients and employees.

Maintaining your company culture and keeping clients happy as you add new people into the mix may be a challenge, so go slow: Don't put new hires immediately on established accounts, for instance. Instead, consider adding them to the team the client is already comfortable with.

Related Article: An Expert Reveals: What's the Most Important Trait to Hire For?

Recruiting Tools for Small Business

From the company websites to aggregated job boards to Craiglist, those are plentiful. Below are some of the most popular tools and places to look for a candidate:

Related Article: Recruiting Rockstars: The 5 Best Job Sites to Post Your Open Position

Recruiting Software

In a Business News Daily roundup of the "Best Recruiting Software 2016" the top three picks were: Osclass, FileFinder Anywhere, and Workable (see the article for a full list). Sara Angeles explained what to look for in recruiting software for small business:

  • Affordability
  • Ease of use
  • Features such as "the ability to post job ads, accept applications, manage candidates and stay on top of the hiring process"
  • Customization ability to fit the needs of a small business
  • The niche factor, like software designed for tech jobs or executive recruitment

Finally, according to a LinkedIn guide, hiring mistakes can hurt small businesses more than they would a big one, because of their size. People make a bigger impact on a small workforce, and even greatly influence your company success, or failure. 

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