In a recent CB Insights study, 23 percent of failed business owners attributed that failure to not having the right team. So, how does a small-business owner find the right people to build a team that will lead the business to success? To find the answers, we spoke to Tom Armour, co-founder of High Return Selection, a firm that improves the financial health of businesses through better employee selection, engagement, and leadership training.
Small Business Center: How important is it for small-business owners to find the right team?
Tom Armour: It’s critical and actually more important than for large companies. Smaller employers operate with a minimal staff. That means there is often no backup, and placing the wrong people on the team can have a significant negative impact on productivity, accuracy, and, most importantly, customer retention.
Is creating a detailed job description before beginning the search important?
The term “job description” isn’t as helpful as most people think. It’s very important to start the search with a reasonable understanding of the required duties. However, a good fit is far more important. Smaller employers and founders need to hire people they can trust, and who fit into the small-business culture. Additionally, small-business owners tend to be more flexible than larger employers. They typically start with a general understanding of what they’re looking for, and use the hiring process as an opportunity to learn and hone the job description as they move forward.
What are employees looking for from employers today?
Many employees have been battered by the continual layoffs, shifting of jobs overseas, and the relentless cost cutting in larger employers. We find that more than 80 percent of employees want to work for smaller companies because they value a smaller company’s ability to have a longer-term focus and provide better stability and commitment to their employees. More specifically, employees tend to want career training and development, an opportunity to grow with the business, and good leaders. Many employees say they would gladly trade off higher pay in exchange for a chance to work for a smaller and better employer.
What can owners of very small businesses do to make their companies more attractive to recruits?
Smaller employers should know and play to their strengths. Often, these strengths include a more caring culture, providing the employee with an opportunity to learn and be exposed to many different things, and giving them a chance to make an impact and be on a first-name basis with the owner. So business owners should consider investing in the development of their leaders, providing opportunities for continuous learning, and ensuring that they implement strategies to provide steady work.
What types of recruiting methods do you see small-business owners use successfully?
There are a number of good ways they can advertise for jobs, and many are very cost-effective, or even free. For example, LinkedIn can be very effective. Employers can post jobs for free on many of the LinkedIn groups, or they can place a paid advertisement there. Having friends, relatives, and your network post jobs on Facebook can also be very effective. And for blue-collar jobs, you can post for free on indeed.com. In addition, veterans are an excellent source of skilled and committed workers, and employers can post on various veteran-support groups.
Campus recruiting is another good way of posting jobs, and many campuses also provide alumni job-posting services. And finally, there’s the Homestead web hosting service. Many times, I have had my staff set up a career landing page there to improve the efficacy of social media recruiting.
Do you feel that social media is the best way to recruit employees?
Social media has completely revamped recruiting in the last five years, and any employer who is not using social media recruitment methods is being left behind. Employers using effective social hiring strategies can often advertise and complete hiring — to the point of an offer — in less than one week. However, in order to get good results, you have to know what you’re doing.
What are the most important things to know when using social media as a recruitment tool?
Interestingly enough, we completed a study on the use of social hiring in over 100 companies. The first thing we found is that smaller employers actually have the advantage when using social recruiting because when they do it properly, they’re able to provide much more interesting work as well as a sense of purpose. Candidates quickly pick up on this.
Next, social hiring is extremely affordable. We’ve personally decreased our recruiting budgets by 80 percent while improving the speed and quality of hiring.
Oftentimes throwing money at social hiring can be a mistake because it can create information overload and bureaucratic application procedures. It’s important to make sure applicants can understand and apply for a position within three clicks. The best employees don’t spend a lot of time trying to navigate through excessive information.
Finally, for critical positions, make sure the candidate can contact the decision maker. For example, the very best salespeople, engineers, or leaders want to speak to a knowledgeable person before they make the decision to apply.
Can you share some practical tips about interviewing candidates, and how to determine whether or applicants are a good fit?
In both large and small companies, interviewers frequently don’t understand that candidates are actually better trained at interviewing than they are. In addition, most assessment tools can be manipulated because there are millions of links providing answers to the most often used behavioral interview and assessment questions.
For starters, take your time because it’s an important and expensive decision. Most businesses tend to hire someone who will stay for a few years, but when you consider the cost of compensation for those years, you’ll see the magnitude of that decision.
Next, you should try and have multiple people involved in the interview process. Review the observations as a group, and if you have any questions, go back to the candidate for further elaboration.
Be sure to invest in modern interviewing methodologies. Many of the interview methods have been in place for over four decades and a great deal has changed. Identify contemporary interview methods and make sure your company’s interviewers are properly trained.
Finally, use test scenarios to see if the person can actually do what they say they can.
Do you recommend hiring on a trial basis? Why or why not?
Not unless the job is temporary. The best candidates are looking for full-time, steady employment. Attempting to hire on a trial basis decreases the proportion of good employees who will consider working for your company.
What is the most important thing small-business owners need to know when searching for a crucial member of their team?
They need to hire someone who fits their own personal style, meets the expectations of their customers, fits in with the team, and understands their specific business processes. I frequently tell founders to find a person they’ll enjoy working with every day for the next five years.