Hiring and Recruiting

6 06 2010

In this economy, it’s great to hear that manufacturing and service service sector companies are expected to add to their payrolls at a much higher rate in June 2010 than they did in June 2009, according to a recent survey by SHRM. The survey also indicated that small business hiring also grew in May 2010. In fact, a Small Business Administration economist even mentioned that small businesses are adding workers as net job losses in the economy as a whole persist. In the aggregate, we’re not seeing dramatic changes, but we’re at least seeing changes in a positive direction.

As with any business, especially a small one, recruiting and hiring the right people for your business is crucial. I’ve previously written about the “Science of Hiring,” particularly the costs associated with a bad hire. Knowing when to hire and how to go about doing so is just as important as picking the right candidate for the job. Growing your workforce  is an investment, so it makes sense to have a tactical approach to hiring.

Knowing when to hire is key. The idea that a new employee will offset your workload and generate new revenue for your business is surely enticing, but it comes at a cost. Thus, it’s important to hire when your cash flow is positive and when you have a cash management process that minimizes the worry associated with cash shortages. Aside from an employee’s regular pay, you’ll need to consider several costs related to employment. Often times, these costs amount to 30-40% of the employees base pay:

  • Federal and State payroll taxes – including Social Security/FICA, Medicare, unemployment, and workers compensation.
  • Employee benefits – such as health insurance, retirement savings plans, life insurance, and long term disability insurance.
  • Cash-flow projections associated with your employee’s pay periods.
  • Employee workspace and computer system use.
  • Hiring and training costs.

Know what position you want to fill. It’s worth stopping to think, “do I really need to hire someone?” Many services can be outsourced or done by free-lancers; this work may include accounting, manufacturing, website design, marketing and public relations. Deciding what tasks to outsource and what to hire an employee for may come down to whether the work lies within your business’ core areas of strength and whether that function is needed on a regular basis. Choosing a position to hire is not just about offloading chores, it’s a decision about the path of your business’ growth.

Know what to expect from your new hire. Before you advertise for help, sit down and write a job description. Job descriptions are communication tools, set yourself up for a great working relationship by being able to clearly articulate the job to all applicants. This document presents an excellent guide for developing effective job descriptions.

Know the salary you’re willing to pay. The going rate for the position you’re about to hire is not only dictated by your cash flow, but it’s also influenced by the market. A little competitive analysis is worthwhile to get a gauge for whether you’re on par with the industry – this is a great article on determining your own salary. Small businesses may compete differently in terms of work environments, employer-employee relationships, recognizing employee potential, and job growth opportunities. Here’s a five-step guide to benchmarking salaries and figuring out how much to pay. Payscale.com and Salary.com are also good resources, they also adjust for geographical inequalities in pay.

Know who to hire and the right questions to ask. First things first, you’re hiring for the position – and by doing so, you’ll hopefully find someone that enables you to continue doing the genius work that got you into your business in the first place. Keep your focus and consider these eight strategies for finding and hiring the right person for the job. Use the interview process effectively and the right person for the job is surely bound to surface. Also, avoid these illegal interview questions that can get you into legal trouble.

Know where to recruit. Find the most qualified, talented, and largest pool of applicants here:

  • Word of mouth. Consider recruiting to be much like business development, be clear and direct about the position you’re hiring for – you never know who might be a reference.
  • General job posting sites are understandably an easy way to get the word out – think Craigslist, CareerBuilder, Monster, etc. Just know that you might be inundated with applicants.
  • Alternatively, try posting on industry specific listing sites. They may cost more, but a better filter will be in place at the start.
  • Social media sites like LinkedIn, Facebook and Twitter.
  • College recruiting, given the position you’re trying to fill.
  • Agencies, particularly if a temp-to-hire avenue is an option.

The time to hire and recruit for your business is an exciting time, and one that will hopefully improve your bottom line. Doing the right prep-work in advance prevents you from unnecessary costs both during recruitment and down the line after you’ve chosen someone to fill the position. Enjoy the process!

Photo courtesy of Allen Associates LLC.

Advertisements

Actions

Information

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




%d bloggers like this: