Expanding the workforce and hiring new employees are generally good signs for a company.
But finding the right candidates can be challenging, especially for small businesses without the luxury of specialized recruiting or human resources departments. Hiring an employee requires a significant investment of resources for training and compensation, and the wrong hire can handcuff a business’s growth.
“The incorrect hiring decision costs a company in terms of revenue and profitability,” said Bob Daniel, owner and manager of staffing firm PrideStaff Las Vegas.
Businesses can improve their chances of finding the best candidate in a number of ways, Daniel says, and many won’t cost the company any money.
Here are several suggestions from Daniel on how to increase the chances of a successful hire:
Is hiring the right decision?
The ultimate factor in deciding to hire new employees is whether the company can afford it, Daniel said.
“Typically what small businesses go through, they have an existing staff who may be working a significant amount of overtime,” he said. “There’s a law of diminishing returns. You can only get so much out of a single employee.”
Companies should consider their business plans and how their revenues and expenses line up, he said, and determine whether there’s enough money to add another employee.
Establish a process
Developing a plan and process for interviewing and hiring candidates before actually advertising the job opening increases a company’s chances of finding the right employee, Daniel said.
Many small businesses don’t develop a formal job description or go into enough detail, Daniel said, and as a result get a less-refined applicant pool.
“A job description really eliminates any misunderstanding about what the responsibilities and duties are,” he said.
For example, if a company is looking to hire a warehouse worker, it should specify whether the position is in shipping and receiving, or in manufacturing, Daniel said, to ensure it gets candidates with the right skills.
Recruit from a broad base
The growing prominence of social media and the Internet allows companies to reach out to a broader pool of potential applicants than ever, Daniel said, and businesses should take advantage of any opportunity to raise their visibility.
“There’s not really a wrong or right approach,” he said. “Many companies are using social media like LinkedIn
and websites like Career Builder or Monster.com to search resumes.”
Still, the best candidates tend to come through referrals, Daniel said, and businesses need to utilize their personal and professional networks during the search.
“No one’s going to recommend someone for a job they can’t do,” he said.
Don’t lock in on a single candidate
Daniel advises companies to interview at least three candidates for any given job opening. Often, he said, companies make the mistake of becoming enamored with a particular candidate and tend to rush through the reference and background checks or disregard other qualified applicants.
“Sometimes small businesses make a decision based on personality, when they should really be focused on whether this person can produce the results that I want,” Daniel said.
Besides checking an applicant’s skills and experience, more companies are putting greater stock in how an employee would fit into the workplace culture, Daniel said.
“That’s a new big thing,” he said. “Is this individual introverted or extroverted? Are they task oriented? This is critical, because you could have an individual with great skills and great experience, but if they don’t fit the company’s culture, 30 days down the line you could have a bad hire on your hands.”
Measure results
A new hire will be a wasted investment unless that person produces results, Daniel said. Measuring the return on investment helps companies track whether a new employee is meeting expectations.
“Small businesses have to remember nothing happens until the cash register rings,” he said. “They need to look at the end result and work their way backward. Where do I want to be?”
When a company knows what it expects an employee to contribute, the hiring process becomes more focused and businesses are more likely to find the right candidate, Daniel said.
“All applicants should have the ability to show the results of what they did at their last job,” he said. “If you set yardsticks and say this is what I expect in six months, you can measure against that.”