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The difficulties of hiring new people as a small business

Businesses of all sizes live and die through attracting and retaining the right people. This is no more pertinently the case than with small businesses, where the impact of an individual hire is typically greater than at a larger organisation.
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SME bosses routinely struggle to attract top talent as they compete with established and deep-pocketed corporates. So what are the barriers faced by SMEs in this area? From our vantage point, we have identified two factors which account for a large part of this struggle: budget and focus. We address these below and then offer some thought on how SMEs can redress the balance.

Budget

This is a mutation of a fundamental structural issue faced by all small businesses when up against corporates; budget. This means both the ability to spend on internal resourced (in-house recruitment teams) and third party suppliers (agencies and marketing). The impact, where talent is concerned, is profound. Jobs boards, typically considered to be a “landscape view” of opportunities available in the market, are disproportionately dominated by the companies with deeper pockets. 

There are too many platforms and too many audiences, and only the best-budgeted firms can afford to address them all. This issue is exacerbated by the factor of brand recognition on the part of the candidate; even where small business bosses do edge in, they rarely receive the attention they deserve as candidates instinctively investigate roles at the businesses they have at least heard of.

The same applies to jobs fairs. I’ve heard countless frustrating accounts from employers who have attended careers fairs in order to develop their “employer brand awareness” (which, by the way, we consider to be of deeply questionable value for an SME) only to find themselves lumped next to a bulge-bracket bank which everyone has heard of and yet everyone still wants to speak with. The boutique finance or consulting firm next door meanwhile receives a pusillanimous dribble of disengaged visitors, in spite of offering equally compelling – or frequently better – opportunities. On this turf, SMEs are playing the wrong game, and it’s one that just can’t be won.

Long application forms and “assessment days” have a peculiar allure to candidates in giving the impression that a firm is more selective. And, of course, they can only be administered by large teams. A startup boss’s criteria may be more stringent and their standards higher; but this is unlikely to be conveyed so explicitly through a structured assessment process. Again, perception wins the day – and goes the wrong way.

Read more about the hiring process:

Focus

No-one ever started a company by determining to build the most brilliantly effective and efficient hiring model ever conceived – unless of course, it was a recruitment firm. Good companies begin with good products and the best companies rarely lose focus on what is delivered. Hiring with excellence, though very important, is way down the founders’ to-do list. And so when it comes to building the right team there is rarely the bandwidth amongst the leadership team required to give recruitment (and particularly candidate sourcing) the attention it requires. 

This is especially so when a staffing requirement becomes desperate – SMEs resort to engaging agencies. But even these highly remunerated outsourced hiring managers can be found wanting, with misaligned incentives and counter-cultural working styles. Dan Fruhman, regional manager at Deliveroo, said “a lot of my time used to be taken up by sitting on the phone with a recruiter, who was just trying to make candidates seem better than they actually were, because the recruiter was driven by their own personal targets. Even when first impressions were not good, they would call you and try to persuade you why that candidate would be a great hire.”

Remediating actions

There are, of course, countless and divergent steps that can be taken by any individual company to address the challenges above. But in the interest of salience I’d like to offer a few short ideas which may prove helpful for aspirational SMEs.

The first is employer brand perception: Scrap it. This does not mean binning your employer brand – that’s critical. But prospective candidates don’t need to have heard of you, they just need to know you are good when you engage them. Time and money spent on changing this will not be well used; the candidate landscape shifts constantly, names are broadcast and forgotten, 99 per cent of those you reach won’t even apply anyway, let alone reach interview and, of course, against the massive brands you just will lose. It is just not a fight worth fighting.

So, it’s about “playing the right game” – a game where SMEs have a sporting chance of winning. So just as small business bosses have always taken on the pricing challenge presented by corporates through recourse to more bespoke service and so on, when they hire they must be more bespoke – and “go direct”. Advertising to the world in the hope that the right people will apply won’t work. Instead, SMEs should pinpoint very specific groups or even individuals to engage, minimising effort and maximising returns.

Using a candidate sourcing platform (CSP) might be the most effective way of achieving this. Inspired by the functionality behind dating websites and rooted by the tested principles of good recruitment, a CSP enables employers to engage the right candidates – and the right candidates only – on their own terms.

On a related note – and from a platform where it will be heard and resonate – SME bosses need to make the case for their business as being able to offer great opportunities. Thankfully, this is increasingly achievable given a growing appreciation of the opportunities to be found at smaller businesses amongst both graduates and the workforce at large. 

There are multiple significant advantages to starting out in a small business which are frequently overlooked. An SME represents a fantastic opportunity to have an immediate impact, where major responsibilities are shared throughout a (often flat-structured) team. This results in steeper learning curves, greater job satisfaction and improved scope for career progression. Make these points, in the right way, in the right forum, to the right audience (all of which might sound platitudinous – but is quite achievable) and you will compete with and win against the biggest and most prestigious employers.

In terms of the interview process, have you ever finalised a job offer and induction process only to realise you’ve made a poor hiring decision? If so you are not alone and you’ll know how frustrating, time consuming and costly it can be. While there are times when the chemistry is simply lacking, what if your interview process wasn’t as effective as it could have been

Tom Davenport is co-founder of Talentpool.

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