You started a business, attracted customers and maybe even got funding to grow. When it all becomes too much to handle on your own, it’s time to hire employees. Almost 6 million of the 28 million small businesses in the United States hire employees, according to the U.S. Census Bureau.
But finding quality workers can be challenging for small businesses that lack the brand recognition to naturally draw candidates, and the in-house recruiting department to seek out and screen applicants. A fourth of small businesses say finding qualified employees will be their biggest challenge in 2015, according to a survey business management software company Sage Software Inc. conducted with 543 small businesses.
Though it can be difficult, hiring employees is an important decision. Not only will you pay their salaries or hourly wages, you’ll also work with them regularly and trust them to represent your business positively. The cost of poor hires can be significant, especially when you consider the productivity you lose from bad employees and the time it takes to replace them.
To help you hire employees who fit your company culture in addition to matching the skills and qualifications you’re seeking, NerdWallet talked to recruiting experts about hiring best practices for small businesses.
Before you start actively recruiting candidates, make sure you can present your business to potential hires in the best possible light.
- Polish your company story. Candidates are drawn to businesses with a story, and small businesses inherently have compelling narratives. When you’re talking to potential applicants, tell them about how you started the business and why you’re passionate about it. Make sure all of your employees can clearly articulate that company message and story, so candidates get a consistent impression of your business.
- Have an online presence. Your business’ website will likely be the first view candidates get of your company. Update the website to clearly reflect your business’ purpose and culture, and include a recruiting page that lists the job descriptions for current openings and directions for how to apply.
- Create well-written job descriptions. Write a clear job description for each position you’re seeking to fill. A job description should summarize the position’s responsibilities, outline specific tasks the employee will be responsible for, and present the minimum skills and experience level desired in candidates.
A great job description evokes inspiration and excitement about the position for potential applicants. If crafted correctly, it will help attract high-quality candidates and deter unqualified ones.
“The job description can make or break the pool of applicants that potentially would apply to the job opening,” Paul McDonald, senior executive director of global staffing agency Robert Half, said in a phone interview with NerdWallet.
- Do research on wages. To get quality candidates to accept the job, offer them good wages and benefits, if possible. This is particularly important in specialized industries including technology, engineering and finance, where there’s steep competition among companies to hire the best candidates.
Stay up to date about the average wages for positions in your industry and for your location, since wages vary based on cities’ cost of living. Sites such as Glassdoor and PayScale can help you see what other companies are paying employees in similar positions.
Distinguish your business by articulating what you can offer beyond the paycheck, whether it’s health benefits or the chance to grow into a leadership role. Candidates will get excited about positions that give them the opportunity to make an impact and gain a range of professional experience.
Once you’ve written job descriptions for the positions you’re hiring, consider all the channels you can use to publicize the openings.
- Job board websites are a simple way to post your openings to a wide audience, and there are many. Most sites charge a posting fee that varies based on location, industry and the amount of time your post will be on the site. Other sites charge a small fee every time a job seeker clicks on the posting, and a few sites are free.
General job posting sites include Craigslist, Monster and CareerBuilder. Many industries have niche job posting websites such as Dice, for developers, data analysts and technology project managers, PRWeek for public relations professionals and Stack Overflow for engineers. Job aggregator sites such as Indeed and SimplyHired curate job postings from around the Web.
- Social media. LinkedIn allows you to create a company profile, publish content and post job openings that the site suggests to LinkedIn members who fit the qualifications you specify. LinkedIn’s small business page has free guides you can download that explain how to leverage the site for branding, marketing, sales and hiring. Finally, you can pay for LinkedIn Recruiter, which allows you to see every LinkedIn profile in full and search for candidates using filters such as location, current company and job title.
In addition to LinkedIn, small business owners should use Facebook and Twitter to market their company and advertise job openings, said Gabrielle Boko, executive vice president of marketing for Sage Software Inc. North America.
“Start using it like a destination,” she said in a phone interview with NerdWallet. “It’s a place for you to attract people.”
- In-person networking. Although online outreach can be effective, nothing beats face-to-face networking. Even if you’re not currently hiring, look for opportunities to meet people in your industry so you can tap that pool of connections when you do have openings.
Trade groups, professional organizations, clubs, customers and even other businesses can provide networking opportunities. Find industry networking events on sites such as Meetup and Eventbrite, or your local Chamber of Commerce website. Additionally, Boko suggested businesses ask their accountant, distributor or other third-party vendors they use to recommend people in the industry who could be a candidate.
“Chances are, the person who’s setting up your systems, doing your taxes or delivering your tires somehow knows someone,” Boko said.
- Employee referrals. If you already have some standout employees, they can be a great resource for finding new hires. Talk to your employees about what kind of applicants you’re looking for. Encourage them to refer friends and previous colleagues, and to spread the word about your job openings throughout their personal and professional networks. Consider offering rewards or bonuses to employees who refer a candidate whom you end up hiring.
Kathleen McMordie, owner of Texas Swim Academy, said employee referrals have been the most effective way for her to find the more than 30 full and part-time staff members she employs. Texas Swim Academy was one of the 101 Best and Brightest Companies to Work For in Houston in 2014.
“Our best way to find employees is telling [current] employees what we need,” McMordie said in a January phone interview with NerdWallet. “We have perks where if [they] find someone, they get a reward, a finder fee.”
- Employment agencies. If you don’t have time to spend recruiting and vetting candidates, it may be worth contracting out to a third-party employment service. Private employment companies help businesses find candidates and screen applicants for full-time, part-time and temporary positions. Many agencies also specialize in particular industries.
If you’re hiring a full-time employee, agencies will charge you a percentage of the employee’s salary. For example, if you hire an employee whom you pay $50,000 a year, and the agency charges 20%, you owe the agency $10,000. If you’re hiring a part-time or temporary employee, the agency would most likely charge an hourly rate.
- The federal government. The U.S. government sponsors almost 3,000 American Job Centers around the country, where employers can work with assistants to write job descriptions, recruit candidates and determine salaries. The U.S. Department of Labor also runs the CareerOneStop Business Center, a website where businesses can post job openings and find resources and tools about hiring, training and retaining employees.
- If you’re looking to fill an entry-level position, colleges and universities can provide a great pool of talented applicants. Contact college career centers about attending a career fair or posting on a campus job board.
For more information about starting and growing your business, visit the NerdWallet Small Business Guide.
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