Small businesses (less than 500 employees) are the backbone of the US economy – yet we’ve all heard the statistics. Over half of our nation’s startups fail within the first 5 years and only one third see their 10th anniversary. But what about those that beat the odds and survive? According to the SBA, they account for 49% of private sector employment and a whopping 64% of all net new jobs since 1993.
In the 28 years I’ve been at the helm of Wonderlic, I’ve had the opportunity to talk with hundreds of successful small business leaders and owners. No matter what size their company, no matter how many employees they had or what industry they were in they shared the same passion and enthusiasm for change. Whether it was sales, marketing, service, operations, accounting or product development they were constantly “tweaking” their current business practices to improve them. Change was the norm and few stones where left unturned. Surprisingly, talent acquisition was rarely high on their list of improvement opportunities despite the fact that most found this to be challenging and mission critical.
Quite simply, they knew that their recruiting and hiring practices were certainly not optimal, but were choosing to focus their attention and resources on other areas of the business that they felt would have a bigger impact. While this may seem counterintuitive since talent is commonly recognized as the foundation of business success, it was nonetheless, true.
While it is true that a tremendous amount of time and money can be invested in talent acquisition, it is accepted that even the smallest employer can make tremendous strides at little or no cost. Some ideas about how you can improve your hiring process without breaking the bank are provided below:
- Do Not Accept the Status Quo.
Take time to review your organization’s hiring process and ask your staff how effective it is at meeting their staffing needs and goals. Don’t be surprised when you find out that it is paper-based (in an online world), time consuming, subjective and reactive. The odds that you will uncover obvious, actionable and cost-effective improvement opportunities are very high. - Stop Relying on Your Gut.
Intuition plays a very important role in employee selection, but should be limited to pre-qualified candidates. An effective hiring process systematically gathers the relevant, job-related information that is necessary to screen out unqualified candidates. Choosing between pre-qualified candidates is more art than science. - Stop Rushing to Fill Job Openings.
Job vacancies can be very painful to the team members who take on more work and responsibility. This in turn creates a sense of urgency to get someone – anyone – into the position. Resist the urge! While getting a warm body into the position might alleviate some of the short-term pain, the long-term consequences can have very negative ramifications. Get to the best people as quickly as possible – but make sure they are the best. If it takes longer, realize that the benefits of holding out to acquire top talent significantly outweigh the benefits of settling for less. - Don’t Make Exceptions.
We all do it… we set aside our standards and make an emotional hiring decision. This can have devastating consequences, especially if the hire is a friend or relative. Instead, hold everyone to the same standards. Put minimum criteria in place and hold everyone accountable to meet those standards every time, just like you do with your other business areas. - Learn from Your Mistakes.
Having to terminate an employee is an inevitable part of running a business. But don’t just accept it and move on. Care as much about your hiring failures as you do your successes. Put genuine effort into understanding why a person didn’t work out. Use the information you have from performance reviews and exit interviews to learn from your mistakes.
Not every hire is going to be perfect, and not every part of your hiring process needs to change. But there is a reason well run companies focus on getting talent acquisition “right.” The results can ultimately make or break a business – and when you’re small, every employee counts.
Next time you hire, make sure you’re utilizing some new tactics, follow the best practices in talent acquisition, examining hard data, holding out for top talent, sticking to your standards, and using what you’ve learned from previous failures to make a GREAT hiring decision.
