Hiring is unquestionably one of the most important entrepreneurial skills. A small business is only as strong as its team, but the right team can conquer almost anything. Many entrepreneurs would likely attribute the majority of their success to the strength of their team. You could argue that this is what separates the winners and losers in the business world. Even the hardest-working entrepreneurs will struggle to grow their businesses without a loyal team behind them.
The importance of hiring, however, is reflected in the difficulty of mastering this skill. Finding the perfect employees for your business is no easy feat. Not only do you have to know exactly what kind of employee you’re looking for, but also where to find this person and how to show them that your business is where they truly belong.
Entrepreneurs who don’t understand the importance of hiring usually end up hiring the wrong people. They fail to realize how much work needs to go into the hiring process to achieve the desired result. The unfortunate reality is that you won’t find the best candidates for your business’s needs by simply posting generic job descriptions and choosing the most impressive resume.
In this guide, we’ll answer the following questions:
- How Do You Know You’re Ready to Hire?
- Which Types of Employees Does Every Team Need?
- What is the Total Cost of Hiring a Full-Time Employee?
- When Do New Employees Begin Contributing to Revenue?
- What are the Best Websites for Finding New Employees?
- What are the Most Common Hiring Mistakes?
- Why are Freelancers So Beneficial for Small Businesses?
- How Do You Know if You Should Hire or Outsource?
- What are the Best Strategies for Building Employee Loyalty?
How Do You Know You’re Ready to Hire?
The tell-tale signs of the insufficient workforce are pretty hard to miss. Your business could experience a spike in demand or a drop in productivity. Maybe your employees are overworked and vital information is falling through the cracks.
But sometimes it’s not so obvious. You might initially attribute the issue to company culture or your management style. This could just be another of those situations where your team needs to push itself to evolve. Before you arrive at these conclusions, you should first make sure that the real problem isn’t the size of your team.
Here are a few frequently overlooked ways to know you’re ready to expand:
Spreading Each Other Too Thin
It’s prevalent for employees of smaller businesses to have massive workloads. They often take on responsibilities that stretch far beyond their job description. This is mainly because the company started with a small team and limited funds. As a result, the original team became accustomed to wearing several hats. But this makes it difficult to tell when someone is taking on too much work for their own good.
One indicator is when one of these “extra” responsibilities becomes integral to the business’s success. The employee suddenly isn’t sure about their central purpose and isn’t honing their most essential skills. It’s okay for employees to learn new skills as long as those skills relate to their primary goal in the business. Two equally critical responsibilities probably shouldn’t be split between one person.
An Aura of Distrust
Many successful companies didn’t realize they needed to make serious changes until employees started leaving one after the other. If you conducted a company-wide survey right now, how many employees would say they plan on leaving within one or two years? A trend in employee dissatisfaction indicates an unreliable or clunky work environment. For most of your employees, their future is unclear.
What causes teams to deteriorate? Maybe your former employees didn’t receive the necessary guidance from their over-worked supervisor. They might have been assigned too many responsibilities for an entry-level salary. In summary, this trend will only continue if you don’t take the appropriate measures to improve the workday of your remaining team.
Regular communication is essential for the success of any organization. But only if employees are receiving clear and correct information. When employees and supervisors are over-worked, they start hearing different things from different people. For example, two employees might think different people are in charge of a new initiative or misinterpret the expectations of a new client. Deadlines and turnaround times might get mixed up as well. When this information is relayed incorrectly, it’s likely because someone dropped the ball and was too busy to process it.
Five Things to Keep in Mind When Searching for Candidates
As any successful business leader knows, the hiring process isn’t as simple as asking for resumes and searching for the most relevant experience. You’ve got to have a much clearer picture of the candidate you’re looking for. This way, you can tailor your efforts to this individual’s unique personality and skill set.
But regardless of your specific needs, following a series of general guidelines will increase the likelihood of finding your target candidate.
Here are four things to keep in mind if you are planning on taking on new hires in the near future:
1. Attitude Over Experience
In 2010, Sir Richard Branson spoke at a marketing conference in Indianapolis to reveal some of his secrets for success. He said that when he started Virgin Airlines, he didn’t hire based on the experience in the field like every other airline. This was how he had hired employees in the past, only to find that the most experienced candidates were merely more knowledgeable about someone else’s ideas.
Branson instead chose to hire based on attitude, or the capacity to learn. After all, it’s much more challenging to teach someone to care about your business than it is to teach them the necessary skills required for their daily tasks. Some business leaders have even found that more experienced candidates have a harder time becoming acclimated to new positions. In addition to their new responsibilities, they have to “un-learn” everything that was taught to them in their previous jobs.
Candidates with the right attitude, however, are few and far between. The majority of the candidates that apply for your opening will do so because of their experience. For this reason, you must make sure your company’s brand identity accurately reflects the attitude of your top employees.
2. Do You Need People or Ideas?
Productivity issues can arise from a host of internal problems. Sometimes, the culprit isn’t just a chink in your team’s chain. There might be a growing separation between employees and their customers. Your employees could be losing their connection with your brand and they might be having trouble identifying with your business’s overarching mission. Unfortunately, these problems cannot be solved by hard work alone.
So, if you’re looking to improve productivity, consider whether you need people or ideas. In the case of the latter, your target candidate should possess the influential power to motivate the rest of the team and lead by example.
3. What Does Your Web Presence Look Like?
Your website and social media accounts should make your business seem like an exciting place to work. Candidates must be impressed and inspired by what they see. It’s not just about flashy images or witty copy. Does your website clearly show what your business does? Does it effectively communicate your brand identity and company culture? As for social media, your posts must denote that your business has gained traction and is ready to grow.
If your website appears outdated or your social media posts are not remotely interesting, no candidate is going to take your company seriously. Your content doesn’t have to make your company look tremendously successful. It just has to prove that you understand your target audience’s preferences and concerns. That’s arguably the number one indicator of a “legitimate” company.
4. Proximity to Workplace
A lengthy commute could significantly hinder all of the skills your most promising candidate has to offer. Yes, this severely diminishes your pool of candidates to choose from. But commuters have admitted to numerous researchers that commuting prevents them from performing to the best of their ability. Forcing a new employee to travel over an hour to get to your workplace is particularly detrimental if the employee was hired for their attitude or drive.
5. Who Will Train the New Hire?
Employee training is difficult for smaller, younger businesses. Odds are, the new employee will be trained by an existing employee, and not just on daily tasks. It’s this current employee’s job to answer any questions the new employee might have and educate them on the business’s company culture. Why does the team get along so well? What are the business’s core values?
Thus, you must make sure the existing employee possesses the knowledge to answer these questions. Smaller, younger businesses usually don’t have extensive materials that display the business’s company culture and brand identity. Instead, employees must communicate the company’s core values face to face. This will also allow the new employee to get comfortable in this unfamiliar environment at a faster pace. Otherwise, they’d spend their first few weeks wondering why their new employer operates so much different than their previous one and questioning whether that’s good or bad.
It’s safe to say that eliminating any suspicion that new hires are in the wrong place decreases the likelihood of performance issues.
Which Types of Employees Does Every Team Need?
We’ve repeatedly alluded to the concept of hiring based on attitude or personality, rather than experience. This strategy is particularly appropriate for smaller businesses or startups. Unlike their larger competitors, startups don’t leave individual employees in charge of different elements of the company (sales, marketing, customer service, etc.). Instead, every employee contributes to these efforts through their unique talents. In other words, it’s the combination of everyone’s skills and specialties that ultimately drives success.
Well, which skills and specialties should you look for? Here are seven types of people that every startup needs on their team:
1. The Leader
That’s you — the business owner. Every team requires a leader to provide vision, direction, and support. But the Leader isn’t all-knowing. You aren’t supposed to have all the solutions. You just have to know the problems, and what kind of people will help you solve them.
The Leader determines the business’s general strategy and makes sure the rest of the team has the resources they need to achieve their goals. You offer guidance and expertise. You bring people back on point if they stray, and tell them when they fall short of their expectations or potential.
Modern business leadership isn’t about pulling your team along behind you. It’s about creating a framework that gives your team confidence and space to materialize the company’s vision.
2. Creative Thinker
Not necessarily a visionary, but closely related. While the Leader is the focal point of the vision, the Creative Thinker gives the vision the details and adjustments to stand out and better suit the preferences of the target audience.
Like the Leader, they have industry expertise. They’re also an avid reader, listener, and follower of innovation and trends. That doesn’t mean they recommend every shiny new object. They keep the Leader up to speed on how your market is changing. This ensures the business never loses relevance or falls out of touch with its target audience. The Creative Thinker essentially acts as an innovator as well as a critic and sounding board.
3. Cash Flow Specialist
Insufficient capital and poor cash flow management are leading causes of small business failure. No company survives without someone who understands accounting, finance, and cash flow.
Your Cash Flow Specialist loves the challenge of forecasting revenue. They’re on top of your accounts payable, so the business isn’t wasting money on late fees and interest. They carefully research which financial instruments provide the right balance of liquidity and return.
Cash Flow Specialists also pride themselves in establishing a realistic budget and building a cushion for unexpected expenses. Startups must make the most of their limited resources. Well, the Cash Flow Specialist tells you just how limited those resources are.
At any moment, they can update you on the financial state of the company. Their records are meticulous. That’s how they ensure you never miss a vendor payment and have plenty of cash saved up for tax season.
4. Project Manager
Depending on the size of your business, the Project Manager may have different titles. A medium-sized team may have a Chief Operating Officer. For smaller teams, your Project Manager may be an office manager or practice manager.
Whatever the title, they’re the nerve center that keeps your team executing daily. They make sure your team has all the tools they need to fulfill short-term and long-term goals. This includes software, product inventory, and, yes, new team members.
One of their most critical roles is in enforcing accountability. Due to their vigilance, customers receive quality service, and employees remain productive. Everyone goes home happy, except them: this is an exhausting role, for sure.
5. IT Geek
A lot of small businesses outsource IT support. But who do your IT support representatives speak to? That’s where the gadget-loving IT Geek comes into play. The IT Geek is the main point of contact with software providers and web developers.
The IT Geek always has their eye out for new technological tools that could smooth out operations. As data becomes more critical, your IT Geek ensures you are tracking data correctly and receiving as much information about website visitors as possible.
If the Dropbox Reddit is buzzing with news of a potential security risk to your computer system, they’re on top of it. If you don’t know what a Dropbox Reddit is, don’t worry. Your IT Geek does.
6. Community Manager
“Community Manager” is often used to describe the person in charge of social media or customer engagement. But that’s not all the Community Manager does.
They have the personality and social skills to keep the team unified. They know all your customers’ names, and your customers know theirs. Their excellent customer service instincts shape customer policy and prevent you from losing customers over petty issues.
Because of their customer relationships, they’re one of your best sources of marketing intelligence. They know why customers keep coming back to your business. They know what your customers would love to see from your business, and what frustrates them. Their strong relationships let you stay ahead of potential problems and industry trends.
7. The Networker
Your Community Manager and Networker may be the same person, both archetypes require a similar skill set of sociability and empathy. The Networker, however, is more focused on business development.
Alongside the Community Manager, they work together to define your company’s brand identity and voice. While the Community Manager shares the pain points and priorities of your customer base, the Networker uses this information to guide outreach to new prospects. They also rely on the Community Manager and IT Geek to maintain an active digital presence.
Networkers are active in the community and participate in relevant business organizations/social events. They and the Leader are the most publicly visible members of the company.
What is the Total Cost of Hiring a Full-Time Employee?
New businesses often underestimate the total cost of full-time employees. Rather than making a single payment up front, you agree to pay several months’ worth of considerable expenses at the very least. It takes time for new hires to contribute to your revenue stream. And this investment starts long before you decide who to recruit.
Here’s a realistic scenario of the time and money you will spend searching and recruiting new employees:
The Search Begins
Finding the perfect candidate takes time, time that would usually be spent on productivity. When looking to fill high-level positions, some companies must market themselves on social media and update their websites to convince candidates that this is the place for them.
Hours or even full days are then spent combing through résumés, responding to email queries, and scheduling interviews on dates convenient for both parties. The length of the interview process depends on the size of the company, with the average interview lasting approximately a half hour. According to a 2105 report from Glassdoor, it takes 23 days to decide on a candidate once the interview and screening processes are complete. It’s safe to assume that at least a week and a half’s worth of productivity was lost in the time leading up to the decision.
Additional Costs: Insurance, Taxes, Etc.
Full-time employees require multiple forms of insurance. This includes workers’ compensation insurance, unemployment insurance, and disability insurance. Depending on your industry, you may also need to purchase general liability insurance and professional liability insurance. The costs of these packages are usually low. But then you must account for payroll taxes, which include federal and state income taxes, social security taxes, Medicare taxes, state and local payroll taxes, and federal and state unemployment taxes. Some payroll taxes are deducted from employee paychecks while others are paid by the employer each quarter.
When Do New Employees Begin Contributing to Revenue?
Like any worthwhile investment, new employees do not produce returns right away. A business will most likely have to shell out thousands of dollars in payroll expenses before the new employee starts bringing in revenue. For example, if you were to hire someone at a $20,000 base salary with an additional $10,000 on taxes and benefits, you would be paying the employee’s entire $2,500 monthly expense with your own funds for approximately two to three months. By the third month, the new employee will start chipping away at his or her own cost. Not until the eighth or ninth month, however, will the employee begin actively contributing to the company’s revenue stream.
Another fairly common scenario is businesses hiring a new employee so current employees can focus on tasks directly linked to revenue. If an employee generates $50 per hour in gross profit, it will make sense to hire someone else to handle anything else that employee does that costs considerably less than $50 per hour. Such responsibilities might include bookkeeping, business development, or social media strategy. The current employee would still need to train this new employee and lose productivity in the process. It probably wouldn’t be more than a month or two before the new employee starts to finance their own salary.
What are the Best Hiring Strategies for Small Businesses?
As you can see, finding new employees has a high cost in terms of money and time. Thus, new entrepreneurs must create strategies for minimizing these costs. That means going far beyond posting advertisements and expecting qualified candidates to reply.
They can’t just post advertisements for open positions and expect qualified candidates to reply. Even if the ad draws attention, relevant experience does not always accompany the other required characteristics of an early small business employee.
For these reasons, the search for employees calls for additional measures and resources. You have to step outside of the box to attract candidates and determine the perfect fit. In this next section, we’ll go over the many unorthodox ways new business owners can find employees, both online and in-person. We’ll also explain how to use the most popular resources, and why individual entrepreneurs would choose one over the other.
How To Find Employees: General Recruitment Methods
You can’t start looking for employees if you don’t know exactly what you’re looking for. The nature of the position should give you an idea of the kind of person who can do the job well. Then, consider what makes your team and their working environment unique. Individual personalities may find these conditions particularly uncomfortable or take longer than necessary to adapt.
Once you’ve nailed down your target candidate, think of the circumstances affecting the search process. You should have an estimated timeline to fill the position, as well as a budget for the resources mentioned above. This timeline will likely come down to how much of your own time you can afford to spend searching for and interviewing candidates. The same goes for the current employees involved in each phase.
Laying out this information and staying as organized as possible dramatically increases the likelihood of success. You won’t worry as much about compromising your other daily responsibilities, mainly because there’s little chance of wasting time on the wrong people.
Once you’ve prepared yourself for what lies ahead, you can shift your focus to the following networking tactics:
What are the Best Websites for Finding Employees?
You may have heard entrepreneurs compare learning how to find employees to learning how to market your business. This makes sense because, just like marketing, what works fabulously for one company could achieve the complete opposite result for another. And it’s not so much about the tool you use but how you use it. Luckily, there are only three important tools or general recruitment methods to choose from. You’ll feel a lot more confident if you use all three.
So, before delving into specific tactics, let’s reiterate the general recruitment methods that will guide this process:
It often seems like another job posting website becomes massively popular every day. Many entrepreneurs prefer the more familiar and proven options, while others prefer those only known in their industry. Examples of the former include Indeed, Monster, LinkedIn, or Craigslist. Facebook has become an increasingly useful recruiting site as well. Wouldn’t you like to see if your giant list of friends could come in handy?
Depending on your needs, however, you might want to try the more specified options. When searching for freelance workers, for example, you should explore Upwork or Flexjobs. Nearly every industry also has its own job site, especially tech-oriented sectors like marketing, graphic design, or media.
The budget plays a role when choosing how to find employees online. Though most websites don’t charge anything for job postings, some have costs for specific amounts of posts or keeping posts active for particular lengths of time. Research these costs before posting on any websites and make sure you only pay for websites or services you need.
The entrepreneurs that have the hardest time figuring out how to find employees tend to struggle with asking for help. Otherwise, you wouldn’t see so many articles emphasizing the effectiveness of referrals. To some, it seems like common sense: when seeking new employees, why wouldn’t you ask virtually everyone you know for help? But for others, admitting that you need help at all feels like admitting weakness.
Well, if this sounds like you, it’s time to swallow your pride and ask your employees, friends, and relatives if they know anyone who could fill the open position. Everyone has their own network, which almost always features at least one young adult looking for work. Referrals have proven so effective for some businesses that they now offer bonuses for employees who bring in new candidates.
Despite its various interpretations, the term “networking” simply means making an extra effort to talk to as many potential candidates as possible. In other words, you essentially initiate conversations even though you have no idea if the individual has any interest in the position. These conversations could take place online or in-person, and yes, this implies talking to strangers.
While old fashioned networking might appear counterproductive, it continues to fill positions from all sorts of industries. After all, countless success stories began with random encounters in the least likely of places. Networking can also give you valuable experience in pitching your company and explaining the position. So, you should at least try to put yourself out there and see how people respond to your offers.
How To Find Employees: 12 Proven Strategies
Now that we’ve established the general strategies for how to find employees, we can move on to specific ways to use them to your advantage. Without this knowledge, you won’t get the full value of social networks, face-to-face interactions, job posting websites, etc. The following strategies have proven successful for myriad entrepreneurs, though the one that works best for you will likely depend on the kind of personality you have in mind.
1. Always Have Your Business Card on You
Entrepreneurs talk about business everywhere they go. They pitch their companies to any new acquaintance who fits their target audience, partially because business cards make it much easier for these new acquaintances to remember and contact them.
Always having your business card on-hand will also make you more likely to pitch your company to potential job candidates. You never know where you’re going to run into someone who possesses the qualities you’re after. Think about it: How many times have you been pleasantly surprised by an individual’s dedication to his or her job?
The service industry, for example, often requires vital skills like multi-tasking, staying calm under pressure, and up-selling. Does this sound like your desired employee? If so, don’t ever go out to eat without your business card on you.
2. See How Prospects Respond to Conversation
Entrepreneurs often preach about basing hiring decisions on attitude, as opposed to industry experience. Anyone can learn about your business’s fundamentals, but you can’t teach general affability with strangers. We previously alluded to the scenario of observing these qualities in people you encounter in mundane environments, like the hair salon or coffee shop. You might suspect, however, that this person can only maintain the right attitude in short interactions, or only during pleasant exchanges.
How can you tell for sure?
Before whipping out your business card, see how this person responds to an elongated conversation. Someone who truly understands the value of customer service will not appear annoyed or caught off guard. But you’ll only see these talents on display when you actively look for them. Thus, you might want to express more openness to these exchanges as you go about your life. If someone doesn’t pass the test, just move on to the next possible candidate.
3. Don’t Be Afraid To Ask, No Matter Where You Are
When searching for employees, you must take advantage of every opportunity that presents itself. This means engaging with anyone who piques your interest, regardless of the environment. Some people might hesitate to bring up their businesses during a conversation. “I just met this person,” you might think. “I don’t want to create awkwardness or sound sleazy.”
Yes, it’s incredibly uncomfortable, but you cannot adhere to this logic when an opportunity comes your way. Let’s say you meet someone on vacation and quickly discern that this person has all the characteristics of your desired employee. As much as you’d love to continue having fun, it’s time to talk business. Don’t think twice before telling this person about your company, asking for contact information, and of course, whipping out that business card.
In sum, you should probably go with your gut when you meet someone who has what you need. This will likely happen repeatedly throughout your career, so best to learn how to recognize these opportunities early on.
4. Tell Employees What Kind of People to Refer
Employee referrals will only achieve the desired result if you tell your employees exactly what to look for. You can’t just ask your employees to refer anyone who can work hard, communicate effectively, etc. They need specific criteria and an understanding of the position’s responsibilities. This information will make your employees much less hesitant to refer their friends. It’s safe to say that most people wouldn’t tell their friends about an opportunity if they weren’t 100% sure this person could do the job well.
5. Contact Local Universities
Recent college graduates don’t waste time capitalizing on entry-level opportunities. Rather than browsing job websites, however, they prefer to take the first offer that seems exciting and different.
For example, lots of students find jobs through their professors. Thus, you could contact professors at local colleges and ask them to tell their classes about the open position. The school’s employee directory will tell you which professors teach the courses that bear the most relevance to your industry.
If you live or work near one such university, you could also print out flyers and post them in crowded buildings. Much like Facebook’s job boards, people like seeing companies make an effort to attract their attention.
6. Use LinkedIn’s Search and InMail Capabilities
LinkedIn allows you to search for keywords associated with the open position. The results will show LinkedIn users who included that keyword in their work history or executive summary. For example, if the job involves writing ad copy, you could search those terms and see which users mentioned them most frequently in their LinkedIn profiles.
With LinkedIn Premium, you can use the network’s InMail service to contact people you have not already connected with. Candidates will likely respond better to InMail than standard email, primarily because the user can see that you’ve done your research.
7. Don’t Rule Out Social Networks Without Trying
Since you don’t have much experience with online job postings, it’s challenging to decide which website or social network has the highest likelihood of success. For this reason, you might as well try your luck with each of the most popular options. Some of these might not have the best reputations with your industry, but that doesn’t mean you should count them out completely.
New entrepreneurs often make the mistake of creating one job ad and posting it on several websites or networks. They forget that each option has its own format and style. What looks good on Indeed might not work for Facebook or LinkedIn. You’ll only have to make minor changes at most, but it’s crucial to do this for every ad you post. If you tailor your ad correctly and it still fails to gain traction, then you can consider leaving this option behind and shifting your focus elsewhere.
8. Choose Social Networks That Occupy The Most Attention
New entrepreneurs typically search for young employees. Different types of young adults favor various social networks, like Facebook, Instagram, or LinkedIn. So, before focusing on one specific network, figure out which one draws the most attention from the kind of individual you have in mind. You can then use this network to connect with potential candidates. On Instagram, for example, you can send candidates direct messages.
But you must also build up your presence on the network as you scout for talent. You’ll get more responses if it’s abundantly clear that your company’s page reflects your culture and explains what makes your company unique. Many businesses have reportedly found success using social networks to fill creative roles, like content development, along with entry-level positions, like executive assistants.
9. Use Reddit To Find Serious Prospects
One of our previous sections alluded to the appeal of different social networks for different types of young adults. When searching for creative IT (information technology) professionals, you might want to try Reddit. This network features subreddits, or forums, centered around job opportunities in major cities. Reddit users (or “Redditors”) also tend to take their passions very seriously.
This suggests that anyone browsing jobs on Reddit likely has every intention of pursuing them. In general, people usually choose to post on Reddit (as opposed to another network) because they want real responses, not just “likes” or shares.
10. Use Facebook’s Job Boards
After researching your target audience, you may conclude that they spend more time on Facebook than any other social network. In this case, you should probably post your job on Facebook’s local job boards, many of which have massive amounts of followers.
These followers will then see the job posting on their news feeds. This shows them that instead of expecting users to contact you, you went the extra mile and made sure your post reached them. The number of followers significantly increases the likelihood of responses. Also, remember to include links to your company’s website or application page in each job posting. People prefer seamless application processes that don’t involve clicking through several pages of the company’s website.
To maximize exposure and the chances of referrals, share the posting on your own news feed as well.
11. Showcase Your Company Culture in Job Postings
Different personalities thrive at various companies. Your new candidate’s attitude must mesh well with the rest of the team, so you have to display this attitude in your job posting. Rather than listing the desired traits, you might find more success by implying them through the posting’s language.
In other words, put yourself in your desired employee’s shoes. What kind of language would make this position seem right for your personality? Which personality traits make you so great at what you do?
Using generic language, like “Content Writer Needed,” won’t allow your ad to stand out. To succeed at your company, this person needs to have more than just relevant work experience. It also helps to use highly specific and unique words, as opposed to “energetic,” “obsessive,” “motivated,” etc. Do you expect someone that is looking for work to say, “No, I don’t want to work hard, I guess that’s not for me.”
12. Offer Perks Your Employees Will Take Full Advantage Of
Seemingly minor perks can do wonders for your recruitment efforts. You just have to choose perks your employees will most likely take full advantage of. Common examples include the ability to work from home on occasion, free gourmet coffee, gym memberships, or free Spotify premium accounts.
The increasing popularity of shared workspaces like WeWork stems mainly from the numerous perks they offer. Their large kitchen areas, for example, feature tables and booths for employees who prefer privacy and open space instead of the traditional office.
What are the Most Common Hiring Mistakes?
The importance of hiring, however, is reflected in the difficulty of mastering this skill. Finding the perfect employees for your business is no easy feat. Not only do you have to know precisely what kind of employee you’re looking for, but also where to find this person and how to show them that your business is where they truly belong.
Entrepreneurs who don’t understand the importance of hiring usually end up hiring the wrong people. They fail to realize how much work needs to go into the hiring process to achieve the desired result. The unfortunate reality is that you won’t find the best candidates for your business’s needs by simply posting generic job descriptions and choosing the most impressive resume.
In the following section, we’ll go over different hiring mistakes, explain why they are so common, and what you can do to avoid them.
When you only have a few employees on your team, every individual has a significant impact on the business’s success. Your new hire will help shape your company culture and take on a series of responsibilities that only a specific type of person can fulfill. For this reason, hiring the wrong person could create yet another frustrating obstacle to business growth.
Here are the top 10 hiring mistakes committed by entrepreneurs:
Hiring Mistake 1: Vague Job Descriptions
You can’t expect to find the right candidate if you don’t know what constitutes the “right candidate” in the first place. This is perhaps the most common hiring mistake in existence. Your search officially begins when you post a job description of the open position. Anyone who has looked for a new job would likely agree that job descriptions tend to be extremely vague. They often don’t provide enough detail when explaining the new hire’s day to day responsibilities.
How can you avoid this hiring mistake? The same way you prevent any other common mistake for business owners: give yourself enough time to prepare. Think about your new hire’s most essential responsibilities or the tasks that will occupy most of their work hours. It’s crucial to be as straightforward and specific as possible when outlining these tasks in your job description.
Which co-workers will the new hire spend the most time working with? Will more of their time involve coming up with new ideas, or putting them into action? Which software tools will they be using? Answering these questions will gradually unearth the background and personality you are looking for. Thus, you’ll know exactly what kind of skills and experience to include in your job description.
This information should also be divulged to your current team. The new hire’s integration into the daily grind will be much smoother if their co-workers know what they are doing every day and why their skills are so vital for the business’s growth.
Hiring Mistake 2: Hiring Full-Time Employees for Part-Time Jobs
Wait, shouldn’t this be step one? That might seem logical, but the truth is, you won’t know if another full-time employee is what your business needs at this time until you solidify the new hire’s day-to-day tasks. After writing out the new hire’s job description, you might find that there aren’t enough recurring tasks to warrant a full-time employee. Maybe you could teach these new responsibilities to a current employee who is on track to a promotion. Perhaps you could outsource them to an independent contractor or freelancer.
This option might make more sense if the new hire’s primary responsibilities have foreseeable deadlines, i.e., a few projects that should be completed in several months. What will you do once these projects are completed?
In the past, businesses didn’t think twice about adding full-time employees because qualified freelancers were harder to come by. Fast forward to 2020, when the gig economy is stronger than ever. Even the task of hiring new employees can be outsourced to a freelancer. The point is, you shouldn’t hire a full-time employee for a position that may decrease in value over the next year or so. Full-time employees are suited for jobs that will only increase in value.
Hiring Mistake 3: Not Having a Thorough Vetting Procedure
There’s a common misconception that documented recruiting, and on-boarding processes are only necessary for big businesses. If anything, they are even more essential for small businesses, where the integration of every single new hire can affect the entire team’s daily routine. And thanks to the Internet, smaller companies can create lengthy vetting procedures to ensure that only the most qualified candidates will advance to the final stages.
You may have noticed that businesses are placing more value on online questionnaires and phone interviews. Resumes and cover letters, on the other hand, seem to be losing value. Instead, job candidates are often asked a series of questions to gauge their personality and most unique strengths. Did the candidate apply because they genuinely feel like they will shine in this position, or did they just apply because they have experience in your industry?
Phone interviews ensure that the company only takes the time to interview a few candidates before making a decision. This is why it’s so important to separate each stage of your vetting procedure. For example, many companies start by requesting more information from top candidates, like writing samples or outlines of previous projects. If this information checks out, the candidate has a general phone conversation in which they expand on the same questions from the initial application. This might be followed by a second phone conversation with the candidate’s potential supervisor, who provides more detail about long-term goals and daily tasks.
Hiring Mistake 4: Posting Job Listings Everywhere
Businesses often make the mistake of posting job listings on every popular job board and social network. This creates an impossibly wide pool of candidates, most of whom may be unqualified. You’d think that posting more job listings would increase the likelihood of finding the right candidate. But it’s more likely to do the opposite.
On the one hand, some job boards and social networks are better suited for filling positions in specific industries. For example, though you may get more applications by posting your listing on Facebook, will these applicants be just as qualified as those who applied via LinkedIn? Also, if one social network has been more reliable for your industry, you may consider doing more than posting the listing on your business’s page. Today, it’s not uncommon for companies to request their teams to help out with the hiring process. In addition to posting the listing on their personal social media accounts, your employees might be willing to reach out to their connections, which are most likely to know qualified candidates.
Monitoring the size of your candidate pool is just another way of ensuring that the majority of your applications come from qualified candidates, which prevents you from spending too much time weeding through irrelevant applications.
Hiring Mistake 5: Not Preparing for the Interview
Why do businesses unknowingly end up hiring the wrong people? In most cases, it’s because they didn’t ask the right questions during the interview stage(s). Coming up with interview questions is a lot like writing a job description. You have to think beyond the industry-related skills that anyone can learn. What kind of working style and natural talents are you looking for? Interviews give you the chance to see if the employee’s personality aligns with your company culture, which we’ll explain more later on.
Many businesses make the mistake of asking questions that someone can quickly say “yes” to without thinking (i.e., “Do you have experience with ___?”). Well, you can avoid this by asking questions that require more detailed answers. Two great examples are “Which specific tasks do you enjoy most?” or “What does your ideal workday look like?” These questions will make the candidate comfortable enough to answer honestly. You will get very different answers from each candidate, which makes it easier for the best candidate to stand out.
It’s also your responsibility to have sufficient responses for reasonable questions from candidates. These days, you can’t blame candidates for wanting to know as much as possible about their daily routine. No one wants to start a new job without knowing who they are supposed to be communicating with, where to find specific information, etc.
Hiring Mistake 6: Showing No Enthusiasm
The workforce of the past had very few demands of their employers. They wanted a decent salary, benefits, and a boss who wasn’t too bothersome throughout the day. There was no concern about company culture or the general mood around the office.
Of course, this was before people discovered how much more work they could get done if they liked their jobs. In 2020, a positive work environment is arguably just as important to job candidates as the work itself. Nobody wants to work in an office where everyone seems bored or emotionless, and they shouldn’t have to.
For this reason, you cannot expect job candidates to show enthusiasm about the opportunity at hand if you don’t show it in return. No, job interviews are not supposed to be a walk in the park for candidates. But if you appear excessively stern or unforgiving, candidates will get the impression that the rest of the office is the same way.
In summary, you must not forget that the person conducting the job interview is representing the attitude of the entire team. Candidates will immediately lose interest in the opportunity if they are being interviewed by someone who would rather be doing something else.
Hiring Mistake 7: Ignoring Company Culture
We’ve mentioned company culture several times throughout this guide, and for a good reason. It’s usually not hard to find job candidates who possess the experience and skill set you’re looking for. One of the most common hiring mistakes is basing hiring decisions on these two factors alone. On paper, a candidate might seem just like the rest of the team. But believe it or not, this does not automatically mean the candidate will succeed at your business.
A more accurate indicator is how well the candidate fits into your company culture. Many businesses have found that the best hiring decisions they’ve made were based on the candidate’s personality and the most desirable work environment. During interviews, they ask questions that pertain to the business’s core values, and the way employees treat each other. Some businesses would even say that meshing well with company culture is more important than experience and skills.
Different cultures reward different types of behavior. Thus, you can determine if a candidate is a cultural fit by seeing if certain practices come naturally to them. For example, while one business might reward highly collaborative employees, another company might reward employees who always make suggestions for improving productivity. Your business might reward discipline and following rules, while another company might reward individuality or creativity.
Finding someone who aligns with your company culture will likely take longer than finding the most impressive resume. However, you can shorten this time frame significantly by creating job listings that immediately appeal to fellow subscribers of your core values.
Hiring Mistake 8: Not Judging Everyone by the Same Criteria
Another common hiring mistake to watch out for when assessing candidates is not judging each candidate by the same criteria. Rather than making sure each candidate checks every box, a business might choose a candidate who checks one or two boxes with flying colors. You might come across a candidate who is very dedicated but has little relevant experience. While dedication is certainly an outstanding quality, the lack of pertinent experience cannot be ignored. A similar scenario might involve a candidate who possesses the required skills but has never worked in your industry.
This hiring mistake is often attributed to at least two dilemmas. First is the role of gut feelings. If you have a good feeling about a candidate, does that mean you should dismiss an obvious shortcoming? You might also come across a candidate who checks every box but your gut is telling you something else.
The second dilemma stems from the sheer length of the hiring process. Businesses often forego criteria solely because they want the hiring process to be over. They have yet to find a candidate who checks every box so they assume it will never happen.
Though gut feelings deserve to be acknowledged, you should not hire or dismiss someone based on gut feelings alone. If you’re having trouble finding candidates who check all of your boxes, you must resist the temptation to end the hiring process as soon as possible. Instead, you should consider assigning different priorities to different qualifications, which brings us to the next section:
Hiring Mistake 9: Not Prioritizing Different Qualifications
Even the most reputable businesses struggle to find candidates who meet all of their qualifications. Thus, you can’t expect your business to be the exception. When creating your requirements, think about which ones are most integral to the new hire’s success. Let’s say you’re looking for a marketing director for a pharmaceutical company. Does the new hire need experience in pharmaceuticals to succeed? Maybe they just need a strong, general background in marketing.
The less important qualifications can be learned on the job. Some of them may be skills that can only be acquired by working at your business and nowhere else.
Assigning different priority levels to different qualifications makes it easier to determine if a candidate isn’t the right fit quickly. If every requirement gets prioritized equally, on the other hand, a myriad of candidates may seem equally qualified. Simply put, some qualifications should be deal-breakers: if you don’t have them, you’re out of the running.
Hiring Mistake 10: Rushing the Hiring Process
The most you can do to speed up the hiring process is prioritizing qualifications, as discussed above. Once you’ve done that, you can only remain loyal to the process you’ve created. Rushing to fill a position is a common but hazardous mistake. Even if you have a strict deadline, hiring the wrong person will almost certainly do more damage than extending your search and putting a temporary dent in productivity. Hiring is not easy, especially for smaller businesses. Several weeks or months could go by before highly qualified candidates start applying.
Speaking of productivity, your team may express frustration about your failure to fill the role thus far. Rest assured, they will be happier knowing that you are carefully vetting each candidate rather than making their lives harder by giving the position to the wrong person.
On the other hand, you also shouldn’t turn down qualified candidates solely because you’re holding out for someone even more qualified. You have to be realistic. Odds are, no one is going blow your interview out of the water, or possess the perfect background for the position.
In summary, you probably won’t know who the right candidate is until you compare them to everyone else. So, don’t get discouraged if no one immediately wins you over or stands out from the other candidates. That feeling you’re searching for will come when you’re comparing your top contenders later on.
Why are Freelancers So Beneficial for Small Businesses?
Before you take on the costs of hiring full-time, there may be a better option for getting the help you need for a much lower price. The freelance or “gig” economy is more abundant than ever these days. This can be attributed to at least two reasons. First, business leaders have finally realized just how expensive full-time employees can be. Second, the tech startup boom has proven that a business can be incredibly successful despite having just a few full-time employees.
Here are some other significant benefits of outsourcing instead of hiring full-time:
Finding Freelance Help is Easier Than Ever
Websites like Upwork make it extremely easy for small business owners to find freelancers for both big and small projects. You can search for potential candidates and connect with them almost instantly. So, don’t assume that you won’t have time to find the help you need for a project with a tight deadline.
Paying Freelance Workers Can Be Simple
Now, let’s dive into all of the ways that freelance workers can help your business save time and money, especially when it comes to payroll and taxes. First of all, as long as you properly classify contract employees, you should be able to steer clear of issues with the IRS. You can pay these freelance workers by the hour or per project, which reduces the time needed to account for other payroll details, like federal withholdings and employment taxes. Experienced freelance workers tend to charge higher rates. But it’s nowhere near what you’d have to pay a full-time employee to do the same job. So, don’t be deterred by the prices set by freelance workers, even though they might seem high at first.
Hiring Freelancers Can Require Less Effort
Earlier, we noted that full-time employees require additional expenses like payroll taxes and insurance. This could mean several hours’ worth of paperwork. Even if you use a payroll processing service, you still have set that service up and enter the necessary information.
Freelance workers, on the other hand, require hardly any manual effort on your part. You won’t lose more than a few minutes of productivity. This is another primary reason the gig economy has multiplied as of late. Recruiting several freelance workers one after the other takes less time than recruiting just one full-time employee. And what business leader isn’t pressed for time?
Avoiding Benefit Costs Can Be an Added Perk
Unlike full-time employees, freelance workers are not eligible for benefits like health insurance or retirement packages. Additionally, your total cost of health insurance depends on the size of your company. The more full-time employees you have, the higher your cost will be.
For this reason, focusing on freelance workers instead of full-time employees is a win-win. You can still offer a competitive health insurance plan for your team without continuously raising your total costs.
Filing Taxes with Freelance Help is Super Simple
Business leaders have just two tax-related responsibilities for freelance workers. First, they have to provide freelancers with a 1099-Misc form before tax season. Second, they must report the payments the freelancer received on their annual tax return. Yes, that’s it. The less full-time employees you have, the less time it takes to file business taxes.
Freelance workers are responsible for their own taxes, which is why they tend to charge high rates. A portion of their income gets put away for their upcoming tax bill. And just like smart business leaders, smart freelance workers always overestimate the amount of taxes they’ll owe come tax season.
You Can Take Them On a Test Run
Not sure if you should outsource or hire full-time? Some business leaders answer this question by taking freelancers on “test runs.” If they under-deliver, the money you’d lose is hardly comparable to the amount you stand to lose if this person had been hired full-time. Test runs significantly decrease the likelihood of poor hiring decisions. For smaller businesses, just one of these can be a major obstacle to the business’s progress.
Also, as your company grows, certain services become increasingly vital to your success. For example, it’s easy to imagine a freelance social engagement specialist or copywriter eventually becoming a full-time employee. And since you already know the individual is capable of delivering quality work, you’ll be less hesitant to offer a competitive salary.
How Do You Know If You Should Hire or Outsource?
Sometimes, the decision of whether to hire full-time or outsource isn’t entirely clear. It’s not always about saving time and money. If the responsibility at hand is crucial for your business, you must choose the route that poses the least risk of unsatisfactory work.
Here are a few questions to ask yourself when faced with this difficult decision:
1. Do I stand to lose money if I do not outsource?
In many cases, businesses decide to outsource after concluding that taking the responsibility in-house would likely cost more money than they stand to make, at least in the foreseeable future. The hiring process and overseeing the new employee might also further complicate the business leader’s already hectic daily routine. If you’re short on time and money, outsourcing is probably the way to go. You’d have one less thing to stay on top of, and one less expense you might end up regretting.
2. Will outsourcing affect performance?
Full-time employees cost more than freelancers. In any business initiative, a higher cost is only justified if it offers higher rewards. Not sure if hiring full-time will achieve this result? That’s what outsourcing is for. Some business leaders choose to outsource when they don’t know anything about the service in question. Even if they were presented with a pool of in-house candidates, how would they know how to gauge someone’s capacity to perform?
3. How important is this service all year round?
This is a tough one. Industries evolve, and services become more or less critical. Thus, when you realize a service has become more prominent, do some research to familiarize yourself with it. You might find out that it’s more of a passing trend than a new standard. Maybe your need for the service depends on the state of demand for your industry. If you’re not sure when you’ll need the service, outsourcing is probably the safer choice. After all, it takes much less time to recruit a freelancer than a full-time employee.
Three Services to Outsource
Outsourcing has become the norm for certain services, and not just because of the cost. Many businesses have found that outsourcing these services actually increases the likelihood of quality work. Some things are just better to be left to the experts.
Here are three of the most commonly outsourced services for small businesses:
1. Digital Marketing
The importance of digital marketing is reflected in its complexity. Services like blogging, social media management, and Google Ads are critical for connecting with specific audiences. However, it is incredibly challenging to use these services to bring in leads or revenue. So tricky, in fact, that just one person cannot achieve it. Outsourcing digital marketing puts an entire team at your disposal. Though one person may do the actual work, that person’s strategies are the result of constant collaboration and fine-tuning from their equally experienced colleagues.
Outsourcing this service also makes sense thanks to the availability of performance-driven firms, which only get paid if they increase leads or profitable sales. Many of these firms don’t even make clients sign contracts. If you took this service in-house, on the other hand, you’d have to pay your full-time employee the same amount every month, regardless of how well your campaigns perform.
Talk about a growing industry. Like digital marketing, outsourcing delivery services saves you from having to keep delivery drivers on staff when demand drops. In the restaurant business, this can happen at any moment. Were it not for outsourcing, restaurants would have to find and interview dependable drivers at the last minute. Even if they wanted to tackle this process ahead of time, demand is just too fickle to predict. How many drivers should they hire? Thanks to outsourcing, restaurants can easily recruit a private company to handle deliveries. Some of these companies pay drivers for every order they deliver. As a result, there’s no concern about over or under-staffing.
3. Graphic Design/Web Development
For many graphic designers and web developers, freelancing is their only option for a steady paycheck. Think about it. If only in-house graphic designers or web developers were available, how many businesses outside of the tech industry would use their services? Outsourcing allows all sorts of businesses to access experienced graphic design and web development professionals. That’s why you don’t need to be in the tech industry to have an impressive-looking website these days.
What are the Best Strategies for Building Employee Loyalty?
Finding the right employees is hard, but keeping them is even harder. For the perfect example of building employee loyalty, look no further than the almighty Google. The growth and dominance of Google are primarily attributed to the way they treat employees. They save millions by keeping employee turnover extremely low. Several studies have also shown a direct correlation between employee happiness and productivity.
So, how can you keep your employees just as happy and productive as Google’s?
Unique Company Culture
Working at Google requires a highly specific skill set and personality. For this reason, even someone with years of experience at a company like Microsoft or Amazon wouldn’t necessarily be hired at Google. That’s why Google employees have a saying: “Once a Googler, always a Googler.” They’re a tribe and a family, not just co-workers. Former Google HR Chief Laszlo Bock claimed in his 2015 book that about one-third of Google’s first 100 hires still work for the company.
In summary, the unique standards for working at Google strengthens the bond between employees. When your company culture is unique, employees can’t imagine working anywhere else. At Google, the relationship between employees is enhanced even further by another element of their company culture: face-to-face interactions.
Promote Interpersonal Interactions
Google’s perks and operational structure creates plenty of opportunities for employees to interact with each other. For example, since everyone takes advantage of free meals, they all sit together and learn about their lives at lunch. Googlers are also encouraged to join intramural sports teams and help each other pursue personal projects.
This concept can be scaled to fit any budget. Here are a few suggestions:
- Monthly happy hour. This can be a voluntary, after-hours activity that not only allows your staff time to relax and get to know each other but also a way to explore your city. Pick a new venue each month to keep it fresh.
- Group lunches. This can be a brown bag or catered, depending on your budget. Encourage people to bring games, share desserts, or make it cook-off with prizes for the best dish.
- Team up for a cause. Have a bunch of athletes on staff? Organize a team run, walk, or relay to support a charitable cause. Supply team shirts and pay the entry fees. Schedule group training sessions.
- Flexible start/end times. This is a controversial topic. But with more women in the workplace and more men actively participating in child-rearing, flexible work schedules are a huge benefit. Making it part of your company culture demonstrates an awareness of and sensitivity to the work-life scenarios many employees juggle.
- Donuts! Nothing brings a group of employees together faster than a box of donuts. Surprise your group once a month or once a week, depending on what you can afford.
Prioritize Physical and Mental Health
Most of Google’s perks promote good physical and mental health. Examples include nap pods, healthy free meals, massage therapy, and their state of the art fitness center. Google even pays its top engineers to abstain from all projects for months just to “recharge,” and figure out which ideas they want to pursue next.
Prioritizing physical and mental health has a myriad of benefits. For one thing, employees are less likely to get sick and burnt out, which ensures consistent productivity. Research has proven that eating healthy food throughout the workday has a direct impact on productivity.
Also, when you’re feeling great all-around, you’re more likely to produce high-quality work. Of all the benefits to offer, health-related perks will likely have the most significant impact on your business’s success.
Hiring: Make Your Company a Great Place to Work
As you can see, finding and keeping employees is much easier when your business is simply a great place to work. In fact, you could even say that your business’s survival depends on the happiness of your current team. The happier they are, the fewer changes you’ll have to make. Hence, if you make employee satisfaction a priority from day one, you probably won’t have much trouble building your dream team.