(One of the most common issues for today’s small business owner is finding and retaining employees. This article explores some
possible solutions and strategies that can be utilized.)
Authored by SCORE
Employee hiring and retention has been sited as one of the major issues for small business owners. Unlike larger corporations, small businesses have three distinct issues related to employee hiring. A major distinction is that small businesses may not have the financial ability to be competitive, particularly in management level positions. This includes not only pay structure but also benefits such as medical and 401K options. Additionally, part of the hiring process should include the identification and prioritization of all open positions prior to posting. By prioritizing the opening, optimal hiring decisioning can be made in cases where funding may be limited. A second distinction is the level of due diligence applied to hiring. Small businesses tend to use social media and internal postings rather than utilizing a wider resource net. Thus, the hiring process may not include an adequate level of reference and background checks. The third distinction is small businesses tendency to see hiring as a single, isolated event. There is minimal HR strategy and policy in place regarding recruitment.
Recruitment strategies
Developing an appropriate recruitment strategy can assist in bridging the gap. These can range from simple strategies like job boards to more advanced methods such as the use of recruiting agencies, social media and job referral programs. The following are some effective strategies that can be utilized specifically by small business to improve recruiting programs.
• Reach qualified candidates. This is a critical part of the strategy for recruitment. It may be necessary to utilize multiple avenues to reach candidates. Consider the job and where you can reach candidates with the qualifications needed. For example, if the job requires college education it may be useful to go to college hiring fairs, use job boards located at local schools, etc. In the current business environment, the use of online recruitment tools such as Indeed are helpful. These allow you to search posted resumes that meet your requirements, thus providing more targeted candidates. It is also worth considering past candidates who may fit the position.
• Utilize best practices in interviewing. An effective interview strategy can provide information on the candidate and their ability to fit the job as well as fit in the organization. The strategy should include prepared questions focusing on the job and responsibilities, active listening on the part of the interviewer, distraction free interview area, use of multiple interviewers, note taking by the interviewer, and communication of the schedule for hiring and possible follow-up interviews.
• Allow for a reasonable decision-making period. Keep in mind that candidates most likely have multiple jobs for which they are interviewing and considering. To be competitive with large corporations, small businesses need to have a short but effective interview schedule and process. By utilizing an effective interview process you can determine the candidates’ qualifications for the position in the initial interview. In the event a second interview is necessary or there are multiple interviewers, utilize back-to-back scheduling.
• Make a compelling offer. This is the most critical part of the hiring strategy. Before putting together an offer, be sure to review market rates for similar positions within the area/state. This will provide some benchmark for the salary offer. It may be that the benchmark range is above your budget for that position. Recognizing that corporations can meet and exceed the benchmark salary, you may need to consider other incentives to include in the offer package. Other possible incentives include such things as flexible work schedule, remote work, collaborative culture and work environment, and accelerated advancement opportunities. When determining the appropriate “other” benefits, keep in mind the generation of the candidate and try to match these options with their expectations as much as possible.
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Retention strategies
• Create development and/or advancement opportunities for all levels of employees. Good employees are motivated by possible promotions and/or the opportunity to take on additional challenging work. In small businesses especially, the opportunity for management promotions may be limited. Therefore, it is advisable to have a dual track structure for employees. For example, consider how Microsoft has a people manager and contributor advancement structure. This allows all employees the ability to advance through a defined organizational structure. The structure recognizes the limitation of management positions and the fact that advancement does not need to be centered on people management.
• Continue to monitor turnover risks. This is particularly important in times of organization or economic change. Keeping your finger on the pulse of employee expectations as well as their view of the organization is important. Open communication and employee surveys are two common methods for this. Having said that, the second part of this process is resolving concern where possible or providing appropriate reasoning for those things that cannot be changed. Without this part of the process, the surveys and communication will become useless.
• Provide adequate recognition and appreciation programs. It is noted that approximately 60% of employees indicate they would quit their jobs if they felt unappreciated or overlooked for work well done. Recognition needs to be built as part of the culture of the work environment.
• Ensure that employees don’t feel overwhelmed and/or overworked. In today’s work environment this can be a significant challenge as there may be a shortage of workers. Management should put in place a program that ensures direct employee communication is open and unconditional. Many times, employees feel it may not be appropriate to bring up working conditions without putting themselves in a bad position. The work environment should be built to foster open communications that will bring about positive solutions to these issues.
