Ultimate Small Business Hiring Guide
Time to Read: 23 min | Audience: Business owners and managers | Last Updated: November 2021
If you own a business, you’ve more than likely uttered the age-old cliché “good help is hard to find” more than you’d like to admit. Sure, it’s a tired, worn-out, overused phrase, but sometimes clichés are clichés for a reason: because they’re the indisputable truth.
Finding great employees can be difficult, but it doesn’t have to be.
There’s a wide array of potential reasons why you’re struggling to find the talented candidates you need to keep your business running smoothly and continuing to grow. It might be your job description, it might be how you’re interviewing, it might be the wages and benefits you’re offering, or it might just be where you’re looking.
Regardless of why it’s happening, your struggle to hire great employees is most likely negatively affecting your business in more ways than one, and solving this issue should be one of your top priorities.
We’ve created this comprehensive hiring guide to help you hone your hiring practices and staff your business with a talented team of highly skilled employees. It’s going to cover everything from what to look for when hiring and when it’s time to hire to finding the perfect candidate and making a great offer.
Is It Time to Hire an Employee?
The answer to this question is not always as clear as it seems. The hiring process can be long and difficult, and it requires time, effort, and money that may be better spent elsewhere.
It’s important to sit down and think about what sort of value a new employee might bring to your business and whether that value is worth the effort finding that employee will require.
Some signs that you may want to consider hiring new employees include:
- Your current staff is being overworked
- Your business has grown considerably
- You’ve been experiencing customer service issues
- Your business is expanding and now requires new skill sets
- You’re unable to meet customer demands
- Experienced staff is wasting their time on basic tasks
Once the strength of your business begins to outweigh the capabilities of your current staff, you need to consider hiring, or your business is going to suffer for lack of required labor. Read on for some tips to keep in mind when entering the hiring process.
Don’t Just Hire to Hire
Once you’ve recognized that you need more staff, it’s important to ask exactly what kind of staff will be most beneficial to your business. Do you need to hire entry-level workers, or could you benefit from more management? Is there a new position you may need to create, or would it be better to bolster current ranks?
Always remember that simply hiring because you know you need to hire may just create more problems than it solves.
Consider the Cost of Hiring
There are more expenses involved in the hiring process than you might think. From the cost of recruitment to training new hires to the additional payroll tax costs that those new hires will incur, there’s plenty more to calculate than just the wage you’ll be paying a new employee when adding to your workforce.
It’s important to sit down and calculate all of these expenses before getting into the recruiting process to have a clearer picture of what it’s going to cost you and what kind of wages and benefits you can offer.
According to the U.S. Small Business Administration, the cost of a new employee is roughly 1.25 to 1.4 times their annual salary. That means an employee making $40,000 will cost you somewhere between $50,000 and $56,000. That’s a considerable amount more, and it’s something you need to keep in mind when you’re planning to hire.
Consider the Cost of Losing an Employee
Another deceptively expensive aspect of running a small business is the cost of losing an employee. There are several reasons why turnover can be really expensive, and they’re often pretty difficult to pin down, but it’s still important to do your best to assess these costs in any way you can.
To help you with that, we’ve listed a few of the typical expenses associated with employee turnover below:
- Loss of productivity
- Potential increase in costly mistakes
- Possible loss of business due to errors
- Recruiting and hiring costs
- Training expenses
While many of these costs are difficult to estimate and depend heavily on the specifics of your business, it’s safe to assume that the price of turnover will be considerable and will have the potential to negatively affect your business.
According to the Society for Human Resource Management, replacing an employee will cost you about 50 to 75 percent of their annual salary. This figure means that if that employee made $40,000 per year, replacing them would cost you between $20,000 and $30,000.
What to Look for When Hiring
You probably already have a fairly strong idea of what you’re looking for in a great employee, but sometimes our instincts can steer us wrong.
Sure, finding a skilled candidate is pretty important, and it’s always nice to personally relate to the people you employ, but what’s more important is that they exhibit the following characteristics:
Eagerness to Learn
Knowing a lot about the job is always awesome, but you might be eliminating many great candidates by only seeking out those with plenty of experience. What’s more important is that your new hire expresses a desire and a willingness to learn new things.
Intellectual curiosity and an eagerness to grow lets you know that you can expect your candidate to become better and better at their job the longer they stay and become more of a great asset to your business as they do.
It’s not always easy to determine a potential employee’s dependability during the hiring process, but there are some clues you can look for that can help your assessment a bit.
One is their response time when contacting them, and the other is how early (or late) they are to their interview. You can also include specific questions during the interview that can clue you in to just how dependable they might be.
If you find that a candidate is eager to learn about your business, curious about their opportunities for advancement, and expresses a desire to achieve certain goals in and beyond the workplace, you may have a keeper on your hands.
Ambition speaks to motivation, and motivation can be difficult to come by in the world of small business hiring.
Of course, most candidates are wise enough to try to make you believe that they’re highly motivated during the interview process, but things can change quickly after the job has been secured. That’s why you should always keep an eye out for those characteristics of ambition during the hiring process.
The ability to communicate effectively is an important trait to have in just about every job, and that’s because it’s an important trait to have in general. Strong communication will help your new employee learn the ropes quickly and easily. It will allow them to give and receive the feedback you need to maintain a good working relationship with them.
Perhaps more importantly, good communication skills will help them get along with their co-workers and maintain a good rapport with customers.
No, you don’t need to be best friends with your new employee, nor does any of your staff, but you do need to get along with them well enough, and if they’re going to be interacting with customers, you’re going to want them to have a likable enough personality.
A disagreeable employee with a toxic personality can create a negative work environment that will affect your business on all levels. Look for someone who at least tries to be friendly.
Creating a Job Title and Description
The job title and description are two aspects of the hiring process that are not always as highly prioritized as they should be. You must take the time to create a detailed, accurate, and interesting description of the position you’re looking to fill so that you can attract and intrigue the right candidates and send the wrong ones looking elsewhere.
A poorly constructed job title and description will waste everyone’s time and cost you a fair amount of money. You don’t need to sift through a thousand resumes from unqualified candidates, and you don’t want to spend your precious time interviewing people who are not the right fit for the job.
Instead, use the following tips to craft the perfect description of the position you’re going to fill so that there is no confusion and you only find highly qualified candidates.
Job Description Checklist
Before we go into the finer details, here are the key aspects of any great job description. Make sure that yours checks all of these boxes, and you’ll be well on your way to finding the perfect hire.
- Job title
- Job overview and purpose
- Basic duties and responsibilities
- Necessary qualifications
- Education and experience
- Required knowledge and skills
- Preferred qualifications
Any good job description will address these basic tenets, and each one of them will be thoughtfully and accurately detailed. Now, let’s look at exactly how to create each one with thoughtful and accurate detail.
Creating a Job Title
Your job title should be a simple one to four word description of the role you’re looking to fill. Keeping it simple is imperative, but you also want it to be specific enough to accurately describe the content and responsibilities of the role.
Remember that a job title should be aimed at the person seeking the position who may not know much about your business. Always make it searchable online (i.e., avoid unfamiliar “cool” titles that other companies likely aren’t using.)
Job Overview and Purpose
This section should introduce the job seeker to the position with an overall summary of what it entails. You don’t want to get too detailed here — save that for the next section — you just want to craft a concise handful of sentences that will let the potential applicant know the position’s general purpose for your organization.
Basic Duties and Responsibilities
In this section, you’ll be going into full detail about what the expectations and responsibilities of the position are going to be. Think of the what's, whys, wheres, and hows of the work and detail them explicitly here, being careful to be as clear and concise as possible.
It’s a common issue with job descriptions that the details of the position’s basic duties are obtuse enough that they hardly describe anything at all, especially to those who are on the outside of your business or industry looking in. Avoid that by telling your potential candidates exactly what you’re expecting from them.
What is the bare minimum level of knowledge, skill, and experience that you’re looking for in a potential hire? That’s what you need to include in this section.
Suppose that you want X amount of experience, a certain level of education, or a specific type of proficiency. In that case, you need to state it, or you’re going to be sifting through many unqualified candidates.
Remember, even if you’re willing to make certain exceptions here and there, you don’t need to state that in your qualifications. Set a baseline and go from there.
Education and Experience
While you describe the level of education and experience you’re looking for in the qualifications section, you may need to go into greater detail in a later section.
You might consider a bachelor’s degree a bare minimum requirement, but what field of study are you looking for? You may want a certain amount of experience in a given area, but exactly what do you consider “experience”? Detail all of that here.
Required Knowledge and Skills
Education and experience indicate a certain level of knowledge and skill, but it’s important to go into greater depth about exactly what knowledge and skills you’re expecting from your candidates.
These don’t necessarily need to be hard skills, either. You can let candidates know that you’re looking for strong communicators, team players, adaptability, dependability, and whatever else you think is important to the position and your business.
There may be certain levels of education, experience, or skill that would be nice for your candidates to have, but that are not total deal-breakers if they don’t possess these traits.
That’s what you’re going to include in your preferred qualifications section. Any resume that can check these items off should find its way to the top of the pile, but any that don’t shouldn’t necessarily be discarded right away.
A good benefits package can be a great way to entice top talent to give your job offering a look. When there are many similar positions available from similar businesses, you need to find a way to stand out from the crowd, especially if those businesses can offer higher wages than yours.
Benefits can be the difference-maker when it comes time for that highly coveted candidate to make their choice between you and someone else. Here are some benefits to consider offering:
- Sick days
- Vacation days
- Health insurance
- Life insurance
- Short and long-term disability
- Retirement accounts and benefits
- Professional development
- Financial planning
- Employee assistance programs
- Work schedule flexibility
- Remote work options
- Fitness incentives
- Education plans
- Student loan paybacks
Small businesses are typically not required to offer insurance to their employees, so doing so could help you stand out to top talent. However, not all small business owners can offer those kinds of benefits, so you may have to get creative with the perks you offer your potential hires.
One of the best options is simple flexibility with things like work schedules and remote work. Making room for different work styles can be extremely enticing, particularly to the younger members of today’s workforce.
Struggling to bring in applicants? Try these 15 Ways Small Businesses Can Attract Employees.>>
Posting Your Job Online
If you’re currently trying to hire, and you’re not primarily using the internet to find qualified candidates, then that right there is the reason why you’re probably not having much success.
Referrals and recruiters can certainly be useful, but the talent pool that you have access to through your website, social media accounts, and all of the various job listing sites is immense, and if you use these resources correctly, you’re bound to find some great new employees in no time.
However, the number of places where you can post jobs online is almost too large, and sifting through all of it can be exhausting, so you’re going to want to narrow down your list before you start seeking out candidates. Below are some tips to help you navigate the world of online job posting.
Where to Post
You’re going to want to weigh a few different factors before deciding where to post your jobs online. It’s important to consider where your industry typically posts jobs because that’s where the job seekers you want will be looking for listings. It’s also important to consider what social media sites the candidates you’re looking for might use.
Perhaps more importantly than that, you’re going to want to consider your budget for recruitment. Once you’ve got all of those sorted out, you can consider the following online job posting spots.
Your Own Website
Sure, the traffic is considerably lower on your website than on a site like Indeed or LinkedIn, but the candidates who find their way there are most likely going to be much closer to the demographic you’re looking for, and it’s going to cost you a whole lot less to acquire their applications.
You also have greater control over the application process on your site, and you can provide a greater wealth of information about your business and about the position you’re looking to fill.
Social media does much of the recruitment for you if you know how to use it properly. It’s a great place to find your target audience for recruitment and get them to see your job openings.
Whether you include a “we’re hiring” message on your main page, in various posts, or in targeted ads, places like Facebook, Twitter, and LinkedIn can be powerful tools for finding the perfect candidates for the job.
Not only that, but these channels double as a place to advertise your company culture to potential hires, making the chance of receiving plenty of applications much higher.
Job Posting Sites
Probably the best place to post your jobs online is through one or more of the many job posting sites at your disposal.
Of course, these sites cost money (sometimes quite a bit of money), and you’re going to want to be fairly tactical about which ones you choose and why, but if you strategize properly, they’re more than likely to provide you with the best returns. Below are a few of the top job sites to consider:
There are many more sites like these, but this list should provide you with a strong start in your recruitment process. Make sure to understand how similar jobs are described on these sites and which particular sites typically list jobs from your industry.
Online Job Boards
If you’re looking for a more specific place to post jobs, look into popular job boards within your industry. These sites will take your specialized job listing and help you reach an applicant pool that’s not necessarily found on the typical job posting websites.
The Cost of Posting Jobs Online
Much like most other aspects of the recruiting process, posting jobs online is unfortunately not free.
Whether it’s the cost of maintaining your company website, creating targeted ads on social media, or listing your jobs on one of the many jobs posting sites out there, there are expenses to consider before deciding on which candidate-seeking method is best for you and your business.
The cost of posting jobs on sites like ZipRecruiter, Indeed, and LinkedIn varies widely, and their pricing models are all slightly different from one another. Some run on a subscription model with an overall monthly cost, others charge per job per month, others have a pay-as-you-go model, and some require you to set a daily budget.
Ultimately, none of them are cheap, and they will cost you at least a few hundred dollars per month, which is why you want to do your due diligence before choosing a site and make sure to create an accurate and enticing job description for your listing.
Once you’ve crafted the perfect job title and description, found the best possible avenues to post that job online, and the applications have started to come in, it’s time for the next phase of your hiring process: fielding your applicants.
This process can be a long and tedious one, but it’s imperative that you give it the time and energy it requires, or it will only become longer, more tedious, and more costly. Below are some tips for getting it right the first time when it comes to screening applicants.
Review All Applications and Organize Them
The first step to finding the best job candidates is sifting through every application you receive and curating a list of potential hires.
To speed things up, you can set some guidelines for immediate rejection, such as a lack of qualifications, a lack of a cover letter, or an incomplete application. If you come across an application that doesn’t meet these basic criteria, put it in the “no thank you” pile and move forward.
Further Organize Your List of Potential Hires
Once you have the outright rejections out of the way, put them aside for later, then begin going back through the applications that piqued your interest so you can sort them from “most likely to hire” to “least likely to hire.”
The top applications will have met all of your criteria and then some, while the bottom ones lack in areas but are intriguing enough for you to inquire further about them.
Conduct Phone Interviews
You can efficiently screen your applicant list through some quick phone interviews. You can get a pretty good idea of the applicant’s knowledge, experience, qualifications, and communication skills over the phone. Anyone who does well on this interview should be considered for an in-person interview.
Conduct Video Interviews
Most people are familiar with some sort of video conferencing software, so it’s safe to incorporate them into your interview process for remote and on-site positions.
Invite candidates to a video meeting on Zoom or Google Meet for on-site jobs requiring a thorough screening process before you bring them into the office. If you field candidates for a remote position, a video chat can effectively replace a traditional in-person interview.
Conduct In-Person Interviews
Invite the standouts from your phone interviews for a more comprehensive in-person interview that will allow you to get an even better idea of how good of a fit they’ll be for the position you’re looking to fill.
Any lateness, vague answers, or answers that are inconsistent with what their application says should be grounds for rejection, barring extenuating circumstances. Don’t be afraid to save time by keeping interviews short when it’s clear the candidate is not a great fit.
After your in-person interviews, you should significantly narrow your list of applicants. The next step is to look into their background by checking in with their references and speaking with previous employers.
This background research is a great way to check your biases, as it’s a bit easier to be deceived in an interview than most of us would like to admit. Hearing what others have to say about the applicant should paint a clearer picture than what your first impressions gave you.
Conduct More Interviews
This step isn’t always necessary, but it’s worth considering if you’re unsure which candidate to pick or if you’re uncertain whether you want to pick any of the candidates at all. Narrow your list down to the best three or four applicants and call them back in for one more interview, and that should help you make your final decision.
Hold on to Those Applications
Once you’ve made your decision, contact the rejected applicants to let them know you won’t be moving forward with them, but make sure to file away some of the best ones just in case the position doesn’t remain filled for as long as you expect.
There’s always a chance you didn’t make the best selection the first time around, and there’s no need to start from scratch if things don’t work out.
Using an Applicant Tracking System
Sorting through all of your online applications and managing all of the other aspects of your recruiting process can be made much simpler and more efficient using an applicant tracking system (ATS).
An ATS can perform various functions, from managing and reviewing applications to automated resume evaluation to interview scheduling and much more. This assistance can significantly reduce the amount of time spent on each application and help you find the best possible candidates as quickly and easily as possible.
If you think that using an applicant tracking system for your recruitment process might benefit your business, read on for all you need to know.
What an ATS Does
The specific features of your applicant tracking system will depend on exactly which one you choose, as they vary relatively widely in what they have to offer. Below are some of the most common and most useful features that you will find in your search for the perfect ATS.
Many applicant tracking systems can help streamline the process of job posting by doing much of the work for you. This automation can help you get your listing out to several different pages quickly and consistently.
Sorting and Reviewing Resumes
Instead of sifting through a seemingly endless stack of applications to find that handful of qualified candidates that you’d like to learn more about, you can let your ATS do a lot of the dirty work.
The system can sort through all of the available resumes, eliminating those that don’t meet the criteria you’ve set, so you only have to look through the ones that are likely to make it to the next step of the hiring process.
Typing out individual emails to all of your applicants can take a tremendous amount of time that could be better spent doing other things. Your ATS can send and track personalized emails for you, cutting down massively on time spent typing.
Finding the Best ATS for You
The applicant tracking system that works best for your recruitment process will depend on your own specific needs. It might be helpful to create a list of needs and wants you’re looking for in your ATS to have a handy checklist during your search.
It’s also a great idea to get feedback from others who have used the program you’re interested in, as it’s difficult to really know how it will work for you until you’ve used it a bit.
Tips for Interviewing Candidates
The interview process is perhaps the most important aspect of recruiting, as it’s the best chance you have to get to know your candidates.
There’s only so much you can glean from a cover letter or a resume, and sometimes things look a whole lot better on paper, so you’re going to want an opportunity to meet your best applicants face-to-face to fully assess how good of a fit they might be for the position.
Below are some tips for ensuring that your interview process is an efficient and effective one.
Asking the Right Questions
It’s possible to go through an entire interview and get none of the information you were looking for if you don’t ask the right questions. You need to make sure you ask things that allow your candidates to confirm their qualifications, show their communication skills, and display their personalities.
To do that, consider asking some of the following questions:
“What skills and qualities can you bring to this position?”
“Tell me about a time in your current position when you had to solve a significant problem.”
“What might your co-workers or boss from your most recent job say about you?”
“Tell me one thing about yourself that isn’t on your resume.”
“Why do you want to work for our company?”
If you haven’t noticed, all of these questions are left open-ended, meaning there is no room for “yes” or “no” answers. You want to create a conversation with your questions and allow room for your applicants to express themselves so that they can essentially make their “hire me” pitch.
What to Look for in an Interview
You might have a loose interview style, which can potentially be a good thing, but it’s always best to keep a bit of a mental checklist of all of the things that are crucial to learn about your interviewee so that you don’t leave with any lingering questions. Below are the essential items to keep on that list.
- Ensure that they have all of the necessary credentials
- Ask about their educational background
- Ask about their level of expertise in the field
- Make sure to inquire about their referrals
This list is basically what you asked for in your applications, but going over all of it in person should help you get a better idea about each item and uncover how truthful the candidate was about certain parts of their application, such as their qualifications and their level of experience.
Remember: a significant number of applicants are dishonest on their resumes. Some studies, like this one from Zippia, claim that up to 30% of people lie during job applications, while other studies have the number much higher than that.
Avoiding Bias During the Interview Process
You may think you’re great at remaining objective during your interviews, but you’re only human, and chances are you’re doing what humans do and inserting your subconscious biases into your recruitment in some way or another.
It can be tricky to avoid, but making yourself aware of it is a good start. Try employing the following techniques for keeping bias out of your interviews.
- Standardize your questions
- Use multiple (preferably diverse) interviewers
- Use a grading rubric
- Take notes
- Try not to chit chat
Simply learning as much as you can about interviewer bias can help give you some perspective that can help to keep things impartial. Eliminating your biases entirely is going to be difficult, but with these tips, you’ve got a good start.
Making an Offer
You’ve made it through the long and arduous process of finding the perfect candidate for the position you’re looking to fill, and you’re ready to offer them the job. Now, this part may seem fairly simple, but there’s a lot more to it than meets the eye.
This caution is especially true when you’ve found a truly talented candidate, as they’ve more than likely got other options to go with if your offer fails to impress. How do you make sure they choose you?
Consider the following tips:
- Act fast, so they don’t get swept up by another offer
- Avoid making your offer over email or via text
- Describe your thought process in choosing them
- Discuss pay
- Ask for feedback
- Discuss any extra details
Sometimes it’s best to send a written offer that breaks all of the finer details, as well as the terms and conditions, down in plain English for your candidate to see. This offer can be emailed to them or delivered to their mailbox in hard copy.
You should also allow your candidate to ask further questions about the offer and give them your contact information so that they can reach out if they need to work out any further details.
Presuming you’ve followed all of the advice in this guide, you should be able to secure a new hire that perfectly fills the role you’ve imagined in your business. Take time during onboarding to ensure that your new hire is a good fit. This adjustment period is important for both the new employee and your existing team.
Make sure to retain all of the information about your other promising candidates. While it’s possible that your chosen new hire might not work out, it’s also possible that they will help accelerate your business growth and have you looking for more new employees sooner than you imagined.
With several additional candidates on file, you can save yourself significant legwork and expense the next time you expand.