The right team is an essential part of running a small business, which means how you hire employees can be key to your success.
Every small business owner needs partnerships with reliable vendors and the right team is an essential part of running a small business, but more than half of minority-owned businesses report issues with hiring and retaining talent (along with supply chain disruption) as today’s top challenges. And for empathetic leaders, including those who focus on potential and view their business as an extended family, this process can be especially challenging.
Consider these 10 tips (six for hiring and four for firing) as you build your team.
Tips for bringing someone on
There’s a lot that goes into the decision to hire — including money. The average cost per hire is nearly $4,700, per the Society for Human Resource Managers. To make that investment successful, it’s important to consider the who, when, and how — as well as the role itself.
1. Determine the workload. Write down a list of tasks that aren’t getting done that you expect a new hire to do. Examine if it’s a cohesive role. Write a job description and start to think about the type of person who might be a good fit for it.
2. Set your budget. Think about what salary you can afford and then be sure to price in onboarding or training, employment insurance, and taxes like Social Security and Medicare.
3. Assess your options. Depending on the workload and your budget, explore the pros and cons of the different types of employees — salaried, hourly, temporary, intern, or contracted.
4. Cast a wide net. Post your job description and other details to job sites, message boards, and even social media. This can help you find candidates outside your immediate network, which is a good way to boost diversity and gain exposure to new people and ideas that can help your business.
Action tip:
Ask for references and follow through on any they offer. It can be easy to skip these steps as a small business owner, but due diligence at this stage can pay off down the road.
5. Provide measurable objectives. This helps you match candidate skills to the position. Plus, you establish clear expectations that can help you define success later on.
6. Test the waters. If you’re not sure about the role you’re looking to fill or the skill sets you need, start with a consultant or freelancer. Either hire the person on a per-project basis or invite a candidate to work with you for a day (paid, of course) to see whether they’re a good fit.
Action tip:
Websites that pair companies and jobs with freelancers — such as Guru or Upwork — can help you find someone with the right experience levels and within your budget. Or consider outsourcing human resources tasks to a diversity-owned staffing firm from the most current list posted by SIA (Staffing Industry Analysts).
Tips for letting someone go
7. Weigh your opportunity costs. When you continue to invest in the wrong employee, you’re missing out on a chance to hire the right employee who could help advance your business.
8. Analyze the fit. If an employee is a bad fit for a role, letting them go may mean they find a new job better suited to their skills. Of course, if they’re a good fit for your company, consider if there may be tasks that need to be done, which might be a better fit. After all, they already know your business and brand.
9. Stick to facts. One benefit of clearly defining the jobs you hire for (tip five) is that it makes it easier to explain underperformance if it happens. If you’ve discussed the issues and haven’t seen improvement, it may be appropriate to part ways.
10. Ask for help. One benefit of clearly defining the jobs you hire for (tip five) is that it makes it easier to explain underperformance if it happens. If you’ve discussed the issues and haven’t seen improvement, it may be appropriate to part ways.
Action tip:
Remember that there are various federal and state laws and public policies involved in legally firing an employee. The U.S. Chamber of Commerce and other professional organizations have resources to guide you through the process.
At the end of the day, the right team of employees is a critical factor in the success of your business, no matter how big your team is. Taking a strategic approach to hiring and firing employees when you’re small can help you efficiently build your business and help you create a company culture that reflects your values as you grow.
Sources: Society for Human Resource Managers, Bloomberg, Staffing Industry Analysts, Wells Fargo Women-Owned Business Resources
