Small Business Employee Recruiting and Retention

Talent Acquisition Consultant Manager of Fifth Third Bank LaToya M. Smith and Rowan Richards, Director of Business Coaching and Connections for Accion sat down with us and shared their wisdom on employee recruiting for small businesses. It’s takes some thought and planning upfront to do it right, but the results will be well worth the effort with resulting ROI for your company.

 

Talent Assessment

Smith says that before hiring, perform a talent assessment. First, you’ll asses your current team and create core competencies. Ask what skill sets are needed and what’s missing from the team.

 

Organizational and team development plans help you make sure you’re meeting the needs of the whole organization so you can continue to grow your business. Assess your employees’ strengths and determine how to bridge any gaps. Leadership and individual development and 360 feedback all help you with developing the team and individual skill sets.

 

If you discover a key player on the team, ask yourself what would happen if that person leaves. For that reason, succession planning has to be part of your strategy.

 

She says it’s important to evaluate talent by measuring and managing employees and potential employees with scientifically validated assessment criteria. You can find a consultant or an agency that can help with the assessment.

Job Description and Job Ad

Smith says the job description should describe the core competencies and skill sets needed to be successful in that role. You also want the job ad to be appealing to attract the right talent to your organization. You can do that by using the right words and helping candidates visualize themselves in the role. As you craft the ad, focus on designing—not just defining—the responsibilities and skills.

 

She says to use your company branding and make the ad attractive by incorporating design and marketing videos—anything you can do to attract prospective employees. Make sure you remove stereotypical, boring job ad language and make it unique. Stress how an employee can add value to your organization and give their job meaning.

Pricing the Position

When choosing the salary or hourly rate, Smith recommends having a conversation with your CPA. You want to control expenses while ensuring pay equity. Make sure it’s a good time to bring someone new to your organization before hiring. Seek the advice of your CPA on your compensation philosophy so they can help you do the research on the job market and fair wages for the position you want to create. Make sure your pay is similar to others on the market and that you can afford to pay someone fairly to do the job well. You want to pay a meaningful wage to your employees.

Sourcing the Position: How to Find Job Candidates

When you are looking to bring talent into your organization, think about the different networking referrals and word-of-mouth recommendations available to you. Asking employees can help you find people who are a good cultural fit for your organization is also helpful.

 

Indeed and LinkedIn are both good online sources for candidates. If the job is a lower-level position, try local colleges and universities to get someone entry-level. For more advanced positions, you might try professional networking groups or people you know through social media. You can also offer people a referral bonus for top talent that you hire and retain to provide an incentive.

 

Smith stresses the importance of diversifying your talent by hiring those who are different from you in age, race, and talent so that your company contains a wide variety of knowledge, skillsets, and experiences.

Interviewing for Excellence

When interviewing, ask behavioral-based questions to make sure the candidate matches the core competencies of your position so you can understand how they would handle themselves in situations they might face in the role. You can use the STAR method when interviewing by asking the candidate to describe a situation they faced in the past and the task they had to complete, plus the actions they took and the results they achieved. For example, “Think of a demanding internal or external customer. Were you able to meet their expectations? What was your approach?”

Onboarding

Smith says onboarding starts before the hire. Set expectations before making the offer to give them a prospective employee an understanding of the culture. Make the first day memorable for them with a focus on retention. Have a solid onboarding program to keep employees informed, educated, and provide plenty of feedback. Have a mentoring matchup so new employees have a go-to person they can ask questions of and so they feel taken care of, welcomed, and a part of the organization from the start.

What to Determine Before Hiring

Richards says that before hiring, determine the specific purpose of the new employee. You also want to determine the actual cost of hiring an employee. Do an analysis of filling the role with a worker who is temporary vs. permanent, contract vs. employee, the training needed, and any seasonality concerns of the position. Richards says you don’t want to hire going into a slow season when you’re not going to fully utilize the skills and talents of the employee.

 

Richards says to determine that the individual you hire will enable your business to grow. A small business owner is often focused on running the day-to-day operations of the business rather than focusing on growing the business through partnerships, marketing, and customer satisfaction and retention. Hire someone who is going to aid in the growth of the business, and factor in the opportunity cost if you don’t hire this person who could help you grow.

Tools Needed for Hiring Decisions

For a company that’s new, a marketing plan often gets ignored as you get up and running. Richards stresses that a marketing plan is critical for the growth of your customer base. It’s important to nail down a job description that can help you with marketing and customer growth.

 

Richards says you also want to make sure you have accurate financial statements so that you know the right time to hire based on how your business is doing from a cash flow, income, and balance stance year-over-year and month-to-month. You want to know income and expenses monthly so you can determine the health and readiness of your business to take on the costs of an employee. The financial statements help you determine whether you can afford to hire or not.

 

When you hire someone, it’s important to have a defined process and procedure for achieving the desired results of the position. You want the employee to be able to take your written job description and translate it into the actual process and procedure of performing well in the job.

 

Richards recommends getting the professional opinion of your accountant, business banker or community lender, or a business coach or advisor. Ask them to look at your financials and see if it makes sense for you to hire.

Milestones for Hiring

To know whether you are positioned well to hire an employee, it’s helpful to have met some performance benchmarks for the company. If your business has been highly profitable for 12 consecutive months, it’s probably safe to hire someone to help you grow further. If demand for your business exceeds production or service capacity, you want to hire to increase your business capabilities.

 

Take a look at the next three months and determine what sales are in the pipeline. You also want to make sure you have adequate cash reserves. You want to make sure you have enough cash in the bank to cover six months of operating expenses. You need to make sure you can pay employees no matter what happens that might cause a slowdown or halt in business operations.

Retention Is the Goal

Onboarding and retaining employees takes thought and careful planning before hiring. When you follow these steps and create a plan for acquiring and retaining employees who are a good fit for your company culture and the role that you have carefully defined, you should experience the successful growth of your company.

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