The Rock Solid Hiring Guide for Small Businesses
Is your business running like clockwork or running on fumes?
If you're like most directors of small-to-midsize businesses, you know the difference lies not in what you do, but in who's doing it. Global conglomerates and Fortune 500s can afford to make the occasional hiring mistake but for you—the right team is everything.
But finding your dream employees isn't easy. In fact, according to the State of Small Business Report, 54% of SMB owners cite hiring as their #1 biggest challenge. So the good news is, you’re not alone.
The bad news? If you don't get a firm grip on hiring, you could end up wasting a ton of time and money bringing the wrong people on board.
Consider this your step-by-step playbook for getting hiring right once and for all.
First, let's talk budget.
In order to win back your time and grow those margins, you need awesome people.
But let's face it: hiring can get pricey.
Here are five of the most common expenses you may want to include in your budget:
From job boards for coders to job boards for veterans, there is a dedicated platform for almost any kind of talent you're looking for. But reaching those candidates will cost you. The cost of posting your job ads can range from $25 a pop to $5,000 per month depending on where you post and how many positions you need to fill.
A good rule of thumb is to start with the free job boards first so you can limit your spending on premium or speciality job postings for a select few positions.
We all know the best candidates come from our best employees. Question is, how will you motivate them to bring you those candidates? Consider offering a bonus for any candidate referral who succeeds in getting hired and make sure to account for those in your hiring budget.
And if you're using an applicant tracking system (ATS), aim for one that has a dedicated Employee Portal so your current A-players can login and add referrals straight to your open positions.
(This will also make it way easier to track incentives without bombarding your finance team with a barrage of spreadsheets and emails.)
Recruiting Agency Fees
With recruiting fees averaging around $18,500 per year, enlisting the help of an external expert can cost you a pretty penny. But if you're sourcing for an important executive role or you just don't have the bandwidth do to it yourself, it might make sense.
To know for sure, you'll need to pin down the monthly or yearly amount your company would need to spend on recruitment fees. For the sake of easy math, let's go low and say it's $6,000 per year or $500 per month.
If you can bring recruitment in house by spending less than a third of that amount on a smart hiring tool that lets you source and screen candidates yourself, you can literally save thousands.
In today's tight talent market, an awesome employer brand matters more than ever.
If you don't already have a dedicated Career Page on your website, you'll want to set that up ASAP. Depending on who you get to write and design the page, you may need to account for the additional costs of hiring a writer, designer or marketing pro.
On the other hand, most ATS's will enable you to set up a pro-level Career Site using your own logo and branding. (Here's a peek at how we handle that in Breezy.)
The Miscellaneous Stuff
Now that we've covered the biggest line items in your hiring budget, time to tackle the other stuff.
Depending on the role in question, you may need to cover things like candidate travel expenses, paid test projects, on or off site interviews, etc. Make sure you always leave a little room in your budget for unexpected costs. You just never know what might pop up.
The simple act of pinpointing these costs can help you find creative ways to bypass them altogether. For example, using video interviews is an awesomely modern way to eliminate candidate travel expenses and save your team a ton of time.
Calculate your cost per hire
Once you've nailed down all the things your hiring budget needs to cover, it's time to calculate your total cost per hire.
The formula is actually pretty simple:
And here's a recap of the external and internal costs that might play in.
- Job Ads
- Job fairs and recruiting events
- Campus recruiting
- Consulting services
- Agency fees
- Contingencies to regular fees
- Employee referral bonuses/awards
- Immigration expenses
- Background and eligibility checks
- Drug testing
- Cost of recruiting staff
- Cost of sourcing staff
- Time spent on hiring process
- Training on recruitment and hiring for current staff
What if quality matters most?
Alright, enough with the schmancy pants HR metrics.
The truth is, you just want quality players for your team. And you're willing to spend as much time (and maybe even cash) as it takes in order to hire the best fit.
We hear you.
In a minute, we'll show you how to position your employer brand and write a standout job ad that will work wonders for attracting your next rockstar.
But in order to keep optimizing your hiring process to attract quality candidates both now and in the future, you need to a measurable system you can build on.
Here are some of the other numbers to keep an eye on:
- Volume of referrals
- Stage of candidates
- Average candidate score
By comparing the stage and average score of your candidates to the volume of candidates overall and by lead source, you can get the true picture of your best sources and stop wasting time and money on everything else.
Nail your employer brand
OK. So you've defined your needs and confirmed that now is absolutely the time to bring in new talent for your business.
Great! Now, let's get you set you up with an inspiring employer brand your candidates can't resist.
Step 1: Build a stellar career page
With 6.7 million job openings and just 6.4 million available workers to fill them, you need to do everything you can to put your company ahead of the competition—starting with a killer career page.
Here are the core elements to include:
Compelling mission statement
What’s the impact of the product and services your company provides? What problems do you solve for the world? Strike out the jargon and state straight up why working for your company is both fun and worth it. (And please don’t call it a “mission statement!”)
92% of consumers trust peers over brands. Add employee testimonials to your career page to help build trust with passive candidates. You can even integrate your latest Glassdoor rating.
Don't have a Glassdoor rating? No bigs. Launch a simple internal campaign asking employees that, if they've been happy with their experience so far, you'd love it if they could give you a quick rating and review.
Most of our talent-related troubles stem from a blurry line between expected performance and actual behavior. But what if you could clarify your expectations before an employment contract is signed? State your values loud and clear where every potential candidate can see them.
If there's one question every rockstar candidate wants to know, it's: 'What’s it really like to work for your company?' Sure, you can always tell them in the interview, but it's far more effective to show them how awesome you are before they even send in their application. And you better believe video's the best way to get your point across. You don't have to spend a ton on production, either.
Here's an example of how startup company Unito attracts stellar candidates with a simple employee video. (Ukulele optional.)
And if you need more inspiration, check out these 10 awesome examples of hard-hitting SMB employer brands.
Step 2: Create an awesome human job ad
A great job ad will double as an avatar for your ideal employee. So don't rush it.
Talk to your internal leaders to pinpoint who they need, why they need them and the exact results they expect to see from filling this role.
Replace Responsibilities with Impact
Instead of a bland list of “responsibilities”, start your job description with an ‘Impact’ section that outlines the value of the candidate's skills and how they actually drive real-world success for your company and customers.
The goal is to offer applicants a crystal clear understanding of the purpose of this position in a few lines.
Pinpoint the Exact Skills and Qualifications
Do you really want a candidate with a Masters degree? Like, really really?
Don’t put yourself in a position where you have to turn applicants away because it’s the one box they couldn’t tick. If it's a true must-have, add it in as a baseline qualification for the job. If not, add it to an 'It'd be nice if you' or 'Bonus Skills' section.
Write with the "Soft Stuff" in Mind
It's downright crucial to snag candidates with the perfect set of soft skills.
Boldly state your business beliefs using the same language you’d want your new hire to use. Buttoned-up or super chill, make sure you represent your true self.
It can be tempting to leave pay out of your job descriptions and ads. But if you've done your homework, there's no reason to hide what you're offering. Applicants admire transparency—especially millennials. So be straight up about it and save yourself the hassle of awkward conversations down the road.
Not sure how to set compensation? Take a look at similar roles on Glassdoor and PayScale. Just type in the desired role and location and boom! You've got your salary parameters.
Use Inclusive Language
You might've already heard that millennials are now the largest generation in the workforce, but did you know that 44% of them come from a minority community? If you want to attract the widest pool of talent possible (and score up to 30% higher revenue per employee), it pays to be inclusive.
Here are a few tips to help you write a job ad that appeals to everyone:
- Delete jargon and "insider" language and replace it with clear, accessible terms.
- Aim for a balance of masculine and feminine-themed words.
- Unless characteristics like gender, sexual orientation, religion, racial group or ability are directly relevant to the role, leave them out.
Add a Fair Hiring Statement
While you're at it, why not make sure your Fair Hiring Statement doesn't put applicants to sleep?
The equal employment opportunity (EEO) statement is the most undervalued real estate in a job ad. In fact, 67% of job seekers say they care about your diversity statistics. Make sure your EEO statement shows them you care, too.
Step 3: Play up your perks
One of the biggest hiring challenges in a small-to-midsize business is the pressure of having to compete with large organizations for top talent.
Here’s the good news: Your size is your secret weapon.
A 2018 report from Indeed shows us why:
It’s not easy to build a sense of community at work, but many job seekers today look for authentic human connections. A smaller business often results in a tighter-knit group of people, and just as the owners wear many hats, so do the employees. This gives them the opportunity to work on projects that might fall outside their typical scope of work, allowing them to cultivate a variety of skills.
Not to mention the fact that your company is probably much less bureaucratic than a large corporation. Do you offer more freedom and autonomy than other organizations? Have more fun at work? Treat your staff like family?
Don’t hesitate to toot your own horn. Job ads are not the place to be timid.
Data consistently shows that perks like learning and development opportunities, flexible working options and transparent and inclusive work environments are more important than pay.
Here are some proven perks and benefits to try out:
- Align your perks to your actual work culture like crowdfunding company Indiegogo did with remote working options.
- Add inclusive benefits like childcare, health insurance for partners and flex scheduling.
- Play up cultural differentiators like an autonomous environment, lack of bureaucracy and growth opportunities.
- Offer contract and part-time positions to show candidates you embrace the gig economy.
- Forget the dress code. Let candidates know that, unlike large bureaucracies, every day is Casual Friday at your company.
Source like a pro
Once you have a killer job ad, the only question is where do you post it?
This will always depend on the type of talent you're looking for. Remote vs. local, engineering vs. marketing, etc.—the who always guides the where.
Still, it helps to know the full menu of sourcing options available so you can choose the right ones for you and optimize accordingly.
Start with your network
Chances are you already know your next rockstar.
Reach out to your network, including your current employees, with a quick email letting them know what types of candidates you're on the lookout for and get ready to do some serious hand-shaking.
It's always a good idea to meet a potential candidate, even if that person isn't in the job market right now. Proactively building a pipeline of passive talent helps ward off future hiring struggles.
From faster hiring timelines to better quality candidates, there's a lot to love about employee referrals.
Here are a few fun ways to get the word out:
- Have a fun office contest so see who can bring in the most referrals.
- Offer an incentive bonus for any referral candidate who gets hired.
- Offer extra vacation days for employees whose referrals make it past the probationary period.
- Host local meetups where employees can invite their friends, family and past coworkers.
- Give a public shoutout to employees who hooked you up with awesome referrals.
- Make it crazy easy for employees to send you their referrals.
Target new graduates
Hungry new grads can be a sourcing sweet spot for savvy SMBs.
In fact, according to research from LinkedIn, younger candidates tend to be more entrepreneurial and hence, loooove working at smaller companies.
Partner up with local schools to help you build a steady stream of awesome prospects and cut down on the time it takes to actively source applicants.
The job boards: where and how to post
Here's where it pays to really know your talent market.
There's a job board out there for virtually every type of candidate, but each one comes with a cost. Before you invest in paid job boards, make sure your ad has already spent some time on the free, high-traffic sites.
If possible, save yourself a ton of time and use your ATS to automatically broadcast your ad across all the free job sites.
Here are a few of the top job boards you might want to try.
Screen like your business depends on it
The most time-consuming part of most hiring process isn't the interviewing, it's weeding through hundreds of applications to decide who to interview.
Set up some clear clear hiring checkpoints to help screen the right candidates in.
Here are some screening methods that might work for you.
- Direct applicants to a questionnaire to automatically screen out candidates who don't submit it.
- Add a few key screening questions as a second culture-fit checkpoint.
- Ask applicants for video submissions to screen their communication skills.
- If the video looks great, invite them for a live or in-person interview.
- Ask candidates to complete a paid multi-day task in-office or remotely.
- Invite candidates for an onsite meet and greet or team lunch.
Keep in mind it's totally ok to hire slow. Even painfully slow—as long as you make sure you're narrowing in on the right kind of awesome for your team.
Keep it together
Hiring doesn't have to be messy.
When you're ready to say goodbye to the stacks of resumes cluttering up your physical and digital workspaces, Breezy can give you one simple, central place to keep it organized. Plus, with tools like automated SMS and custom candidate scorecards we can automate your most time-sucking hiring tasks and help you find that best-fit needle in the haystack.
But no matter what hiring tool you choose, make sure it's one that can grow right along with you.
Start optimizing your recruiting process today.
Breezy HR is end-to-end recruiting software to help you attract & hire great employees with less effort. We believe HR should be fun, easy, and most of all, human.