In 2018, reports showed a strengthening economy was curbing unemployment, and job candidates found it easier to get work in line with their experience. Despite the seemingly boundless economic growth and record-breaking unemployment rates, there have been a few signals and warnings recently indicating a recession could be on its way.
Whether the job market will remain stable is uncertain, but one would think predictions to the contrary could affect whether employers will be more cautious about their hiring budgets in the new year. Could the simple fear of the unknown play a part in how business owners and recruitment managers end up hiring this year, or will they continue hiring as planned based on current trends?
QuickBooks Payroll 2019 Hiring Report
QuickBooks Payroll set out to determine the state of hiring in 2019 and see if the economic conditions of 2018 and predictions for the coming year will have an impact on hiring practices. The data presented is the result of a survey of 400 business owners with employees and recruitment professionals.
The survey data reveals that employers have a relatively positive outlook on the economy and their ability to hire more people this year. While 91% say the economy will influence their hiring plans, the majority still plans to hire more people this year than last year, suggesting they believe the economy won’t hurt their business in 2019.
91% say the economy will influence hiring plans this year
Having said that, in the event of a recession or economic downturn in 2019, 19% of business owners said they would cut spending on hiring first. 18% would cut employee bonuses first.
Top hiring challenges
Even in a time of economic prosperity, with so many great candidates already scooped up by other companies, business owners still face significant hiring challenges, including:
- Finding qualified candidates.
- New hires not living up to expectations.
- A high rate of staff turnover.
If finding qualified candidates is the biggest challenge, what business owners do after they find that dream candidate is crucial. That could be why the most important quality employers search for in applicants is experience. In fact, relevant experience was more important to our respondents than a relevant degree.
The top quality employers look for in a candidate: relevant experience
Why businesses reject candidates
81% of respondents said they have seen at least some evidence of a lack of qualified candidates in the workforce. Only 17% said they had not seen any evidence of lack of qualified candidates.
One reason given was that schools and colleges aren’t preparing students for the workplace. 33% listed this belief as their top reason for the lack of qualified candidates.
One to watch: social media
And despite protections against such acts, 20% of respondents say they have rejected a candidate based on nationality or race. Candidates have also been rejected for being too young or too old.
Expert advice for hiring in 2019
For small business owners, facing hiring challenges can be intimidating when you go it alone. That’s why we called on the experts in a special webinar (get a recording here) for their tips and tricks on how to hire smarter and more efficiently.
Knowing when it’s time to hire
Perhaps your business has difficulty determining when it’s time to hire someone for a particular position. Nick Mailey, VP of Talent Acquisition at Intuit, recommends taking a hard look at cash flow, the work that’s at the core of your business, and your ability to produce results without help.
“It’s really determining what you’re capable of handling effectively in order to grow your business,” says Mailey. “If you don’t have the capability or capacity to deliver what’s core, you then need to look at additional resources.”
Identifying ideal candidates
Our survey found the top challenge for business owners is finding qualified candidates. If you’re looking for your first employee, finding someone qualified can be even more challenging. Business, managerial, and bookkeeping expert Beverly Lang explained the importance of hiring a sort of renaissance employee as your first employee, especially if you need them to do a wide variety of jobs in the beginning.
“The first couple of new hires are gonna have to be people who could do everything. Whether or not they have the experience or the skill set, they have the drive and the ambition to create that skill set if they don’t have it already.”
After that, it’s all about being resourceful and looking at what needs to be done from an operations perspective. “Identifying employees who are proactive and constantly looking to find a problem and fix it are your ideal candidates in a situation like this,” said Suzanne Harrison, Senior Manager of Talent Acquisition for ZipRecruiter. “There’s always something that can be improved upon, and there’s always something that can be made better. That’s what small businesses do. That’s how they grow.”
Creating a job requisition
According to our experts, creating a great job requisition is essential for drawing in your ideal candidate. Harrison says including daily responsibilities and duties in as much detail as possible sets expectations early on. She also recommends hiring to your business culture.
“Culture’s the No. 1 thing people look for now in a job,” says Harrison. “Whether it’s a very small company or a large company, people are looking for a work environment where they can thrive professionally and enjoy their job.”
Preparing for interviews
Our experts agree that a focused conversation with all parties involved is paramount to setting shared expectations and finding the ideal candidate. Harrison recommends asking tough questions about goals and expectations and what they can do to serve the company.
Once you’ve created the ideal candidate and interview questions, you can begin to build your hiring process, solidifying whether you will do phone interviews first or video calls and the duration and nature of each meeting or assessment.
“Solidify the process as well as any predictive hiring tools you want to use,” says Harrison. “Are there any assessments you want to send? Typing, spelling, grammar, hacker rank? There are tons of great tools out there as well, so set that whole process.”
Calling candidate references
Many businesses do not check references. But our experts say checking is a great way to reaffirm what you’ve already learned about a client and make sure their answers overlap nicely with people who know them and have worked with them in the past.
“I think what’s important is asking for specific kinds of references,” said Mailey. “You want a previous manager, you want a previous peer, and if that person was a manager before, you want someone who has reported to that person who can speak to them as a leader and manager of people.”
Extending an offer
And finally, the offer. Once you find a qualified candidate, experts recommend moving them to the next steps with a compensation conversation in mind. Don’t wait until the end. This way, you ensure you and your candidate are perfectly aligned.
Lang usually suggests businesses put “salary negotiable dependent upon experience” in the job ad because a range is too constricting. You could shoot yourself in the foot for offering more than a candidate is willing to accept.
“You don’t want to give away all of your cards,” says Lang. “You want to keep those close to the vest. When you get to the point where you think this is a viable candidate, you need to find out what their salary range is, to determine whether or not it’s in your budget.”
Time will tell whether businesses feel adequately equipped to hire more employees in 2019, but these responses lead us to believe hiring will continue on a steady incline. For small business owners, staying on top of trends and taking advice from those who’ve been at it a while can surely help attract the right talent and make the entire process less challenging.
QuickBooks Payroll surveyed 400 recruitment professionals and business owners with employees throughout the U.S. in December 2018 about their hiring plans for 2019 and how they compare to 2018. The sample was selected by Pollfish.
QuickBooks Payroll welcomes the re-use of this data under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original source is cited with attribution to http://quickbooks.intuit.com/payroll