The guide to managing HR in a small business

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The most successful businesses are built upon the realisation that the most important asset that they possess is their people. Sure, efficient systems and marketing go a long way but without the right people, you’re going to look pretty stupid when you can’t deliver on the promises you’ve made to your clients. This is why the recruitment process should be viewed with the level of respect it deserves and not just approached as a tick box exercise for putting backsides in seats. After all, it’s not just people that we need… it’s the RIGHT people.

The CIPD puts the cost of hiring the wrong person at two and a half times their annual salary so the financial implications are far from insignificant. In fact, they can spell serious trouble for small businesses. Ask yourself this - could your company absorb the costs of repeated bad hires without batting an eyelid? I doubt it. Furthermore, it is imperative that we understand the legal framework and legislation that surrounds recruitment if costly employment tribunals are to be avoided. You have to be fair when you hire so make sure your advert reflects this.

So, how do we go about finding those perfect candidates that can help take the business to the next level?

Agents Vs ‘D.I.Y.’ Recruiting

Recruitment’s easy, right? You just go and stand outside the job centre with a big net and Robert’s your father’s brother. Wrong. Knowing how to source candidates that are a good fit for an organisation is a real skill and should be viewed as such. One of the first steps of any recruitment drive should be to fully understand the role that you are recruiting for. That doesn’t just mean the day to day tasks that the successful candidate will carry out. As well as the required skills, qualifications and experience, we also need to understand the type of personality required, one that will thrive in the company culture and integrate seamlessly amongst their fellow employees.

Useful Quotes

A moderately successful businessman by the name of Richard Branson (he makes pickle, right?) once said, ‘If you are satisfied with the personality, THEN look at experience and expertise’.- Check it out here

Sounds a little bit more difficult now, doesn’t it? There is help available in the form of recruitment agents but before deciding to outsource the initial stages of the recruitment process we need to decide if this is right for our business. Let’s take a look at the pros and cons of working with an agency.

Recruiting via an agent can be expensive. Depending on the role and salary bracket, agencies can charge a fee of up to 30% of the annual wage they are recruiting for. What you get for your money varies from agency to agency. Some simply source and shortlist candidates on your behalf, some actively headhunt and others may screen potential recruits via psychometric and aptitude testing.

Top Tip

Recruitment is a fiercely competitive market so always negotiate a lower fee than the agents initially offer you. It’s also a good idea to build in a 100% refund of your fee if the new hire leaves within 4 weeks. You will almost certainly find that using an agent will prove considerably more expensive but a lot of the administration (trawling through hundreds of CVs, shortlisting, etc.) will be avoided so any decision should be based on the resource and budget that you have available.

Also, be mindful that agents often have targets and work on commission so finding an honest and credible one is essential if you are to receive the full benefits of outsourcing your recruitment.

The Interview Process

So, you have managed to fish a select few candidates out from a sea of prospective applicants. Now it’s time to meet with them face to face and gauge their suitability. Interviewing really is the most important part of the recruitment process so your approach should be structured to ensure any decision that you make is consistent with the requirements of the role. Set a timescale, prepare properly, decide on the format the interview will take and stick to it.

Top Tip

A key thing to remember is to allow the interviewee to do most of the talking. As a rule, they should do about 70-80% of it.

This will allow you to gain a better insight into the person behind the suit and whether they are a good fit for your organisation. Some candidates will be more nervous than others (you’ll know which ones after the initial sweaty handshake) so be sure to ask plenty of open questions to avoid ‘yes’ and ‘no’ answers and the interview finishing in record time . Take notes. It is a good idea, when the interview is complete, to fill out an interview assessment form, grading the applicant on various areas (articulation, experience, confidence, etc.) and add comments so that you can review them when it comes to making that all important decision. Don’t be afraid to invite the candidate back for another interview if you feel a second opinion would be merited or if there are certain areas you wish to expand on.

Got it Wrong?

We’ve all done it. That person who blew you away in the interview has joined the company and, a week in, they’re spending more time on Facebook or watching YouTube videos of kittens playing the tuba than they do actually working. You’ve made a terrible mistake and now you’re stuck with them for all eternity. Or are you?

Probationary periods are an absolute must in any organisation. No matter how structured your recruitment process is or how experienced you are in the art of interviewing, sometimes one slips through the net and probationary periods are your safeguard against this. Ensure that full details (duration, the possibility of extending, etc.) are included in the contract of employment so that the employee understands fully that their suitability is being assessed.

Top Tip

It takes new employees a while to fully settle in, so a probation period of six months is ideal.

It is also common to state that you reserve the right not to apply your full disciplinary and capability procedures during this time. If you’re sure somebody isn’t cutting the mustard, the first thing to do is sit down with them and explain why you’re not happy with their performance. Be honest, be concise and to the point. It’s important for you and the employee that they know what is expected of them, otherwise how can they be expected to raise their game to a level worthy of your wonderful company?

We've created a free onboarding checklist to help you make sure your new employee gets settled in as quickly as possible.

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