Small business & HR: how to hire the right person the first time
In the increasingly complex world of human resources, small to mid-sized enterprises (SMEs) face employee challenges like those of larger organisations, including finding skilled workers, boosting employee productivity, motivating and engaging staff, and retaining them.
Never has it been more important for business owners to understand core human resource issues. In fact, it’s mandatory for growth and profitability. The main problem is that small-business owners must take on multiple roles. They are usually so busy trying to generate revenue and manage daily operations that HR goes to the bottom of the list of things to do. Limited time, money, and resources can keep these business owners falling behind in the battle to hire and keep good talent.
Whether large, small, or mid-sized, a competent workforce is a necessary asset for any company to convert growth plans into reality. Even with a leaner workforce structure, the right people must be in place.
Too frequently, small-business owners hire employees before thoroughly understanding the technical and behavioural competencies needed in the position and for the company culture. This information is crucial to ensure superior performance and retention. As well, the selection and interviewing process may be rushed and ineffective, and reference checks may be not thorough enough or even done at all to raise red flags before the selected candidate comes on board.
Unfamiliarity with employment laws, not hiring the right people for the job, and not addressing or documenting performance issues can make the HR side of business very stressful for SMEs.
Smaller organisations are often more at risk and must handle more uncertainty than larger ones. This “Focus on Small Business" section can help guide and support small-business owners in addressing the HR side of their business.
How to Hire the Right Person the First Time
Develop a human resource strategy
As a business owner, you prepare business plans at the start, but you may not consider human resource planning as part of your overall business strategy. Understanding the staffing skills and competencies you need right now and going forward to meet business growth and profitability plans is a necessity.
The first step is to tie your human resource plans to your business plan. Assess the current situation and your future goals. Do you plan to expand into new markets or introduce new product lines? Will you need to change technology that may require new skills? Will any possible economic changes on the horizon make good people more difficult to find?
Think through your business plan carefully to determine the people and skills you have right now, and any workforce gaps needed to meet your business objectives going forward.
Understand the position
Once you have planned your HR strategy and know the hiring gaps you have now, start thinking through all aspects of the position(s) so you thoroughly understand the role. What will be the responsibilities and duties? How much authority and accountability will be required to perform the work? What will be the major and minor activities? How will you judge performance?
Know what you are looking for
The goal in any recruitment strategy should be to attract a top performer who will reach a higher level of productivity in a short time frame and ultimately stay with your company for a long time.
To help ensure hiring success, you need to know not only a candidate’s skills, knowledge, abilities, and experience, but also their behavioural competencies — personal attributes or characteristics demonstrated through on-the-job behaviours. These describe how a job is performed — flexibility, teamwork, motivational needs, decision-making style, energy level, stress levels, and self-confidence. You also need to understand your company culture and the behaviours required for the best fit.
Target your ideal candidate
Once you know who you are looking for and have written a job description, you can write an ad and target candidates through a variety of channels. When preparing the job advertisement, think of the Attention, Interest, Desire, and Action (AIDA) approach. You want to attract the attention of a enough qualified people, attract their interest by communicating the essential points quickly and clearly, compel them to respond, and provide a clear response process and mechanism.
Pre-screen the applicant flow
An open position can easily receive many responses. You will need to pre-qualify the applications to determine who best matches your ‘must have’ criteria. Many companies prefer to outsource this step. Small-business owners often don’t have the time or the staff to handle the pre-qualification of all the resumes they receive. In addition to telephone pre-qualification, a questionnaire determines which candidates will advance to the interview stage.
Rank your applicants
Once your applicants have been pre-qualified and telephone screened, the next step is to rank and sort their resumes to determine which ones meet or exceed the job’s requirements based on the criteria you have determined for skills, knowledge, education, experience, and any other qualities necessary for the position.
Interview and evaluate
The job interview is a powerful tool in the employee selection process and is key to assessing personality and cultural fit. A behavioural-description interview enables the interviewer to assess the candidate’s actual workplace behaviours, through discovering how the candidate acted in specific employee-related situations. The questions are more probing and more specific than traditional interview questions.
Before you begin the interview process, make sure you are well prepared and advise the candidate what the interview format will be.
Match the top candidates to the position
Shortlist your top candidates against the skills and behavioural competencies required for the position and for your company. The second interview stage with the shortlisted candidates lets you find out which candidate has the highest likelihood of success. Focus your questions on gaps arising from the benchmark you set so these can be explored in depth.
Check for red flags
Reference checks help you make the best hiring decision possible by identifying the candidate who will be the most successful in the position and within your company.
When requesting a reference, consider the position and what you need to learn about the candidate. Plan your questions in advance and schedule your call. Ask the reference for specific examples of times when the candidate has successfully demonstrated the core competencies required for the position. During the conversation, listen to what the individual has to say and the words they use and how they use them. Be mindful of legal discrimination issues and ask only questions that relate directly to the candidate’s ability to be successful in the position. At the end, ask if there is anything else you should know about the candidate.
Depending on the nature of the position, you may want to get a background check to provide insight into an individual’s behaviour, character, and integrity.
Make the job offer
When preparing the offer, advise the candidate how the offer will be sent (e-mail, regular mail, or other). Provide a reasonable amount of time for the candidate to confirm and accept.
Integrate new hires
In small companies, every employee counts. Onboarding and orientation help integrate new employees so they can quickly become key contributors. Start the process even before they come on board. Call them in advance, let them know who they will meet on their first day, greet them warmly when they arrive, introduce them around, and get them settled. Present information in an easy-to-digest fashion. New hires should be thoughtfully introduced to your company and to the new role.
Make sure that employees currently working with you know the new person will be joining, when, and what they will be doing, so everyone can welcome them. This is good not only for new hires, but also for the health of your company.
Onboarding is not a one-day event. Be sure to chat with new hires on a regular basis to find out how they are doing and if they have any questions or concerns. This is also all part of performance management, a continuous process of working together to plan, monitor, and review an employee’s work objectives and overall contribution to the company.
Most small-business owners know the frustration of spending more time than they want, or should, on non-revenue-generating activities. From payroll and HR management to benefits and compensation, entrepreneurs can spend up to 40% of their day engaged in time-consuming tasks.
The answer may be to outsource part or all of your HR functions so you can focus on your core business. If you have someone on your team who is trying to fulfil a number of roles including HR, outsourcing may be a wise decision.