By Logan Allec
Hiring a new employee can result in a variety of overlooked costs, so it’s important to make each new hire count. Attracting and retaining top talent is a major advantage for your business, while keeping subpar employees puts you behind the competition.
Improving your hiring practices is one of the best changes you can make for your business, leading to lower turnover and more productivity. This article will cover the most important things small business owners should keep in mind throughout the hiring process.
1. Only hire based on your needs
Many business owners want growth—and fast. And in many entrepreneurs’ minds, the quickest way to achieve growth is to hire as many worker bees as possible to take their business to the moon.
Unfortunately, overhiring can cause major headaches later on. What if you’re waiting to collect on overdue receivables and you don’t have the cash to make payroll? You may be forced to take out a short-term business loan to cover your costs, and this can put a major dent in your bottom line. This is why, especially in the early stages, you need to hire based on what your business actually needs today. You shouldn’t be hiring for hiring’s sake in the name of growth.
You need to define the role and specific tasks your next employee will be performing and then find an employee who fits the role perfectly. For example, a job description should include a thorough explanation of the position’s purpose and role in the company along with the most important skills.
Once you have an idea of what your new hire’s duties will look like, it will become easier to identify the right candidates for the job. You might even realize that you can get what you need from an outsourced freelancer or independent contractor rather than having to take on a new employee.
Tip: Ask for help
If you’re hiring to fill a recently vacated position, consider asking the outgoing or former employee for advice on finding a replacement. They will know exactly what it takes to succeed in that role.
2. Turnover is expensive
You might think of turnover as nothing more than finding a suitable replacement, but the reality is it’s a major expense for businesses of all sizes. Even a small decrease in your turnover rate will substantially reduce your costs and improve continuity at all levels.
With that in mind, it’s critical to be confident in each new hire’s long-term future with your business. Increasing employee retention also has an impact on your company culture and makes your business a more attractive destination for new hires.
Tip: Focus on employee engagement
Similarly, you should do everything possible to maximize engagement with your current employees. Gather feedback from your employees to learn more about what they need and how you can incentivize them to stay in their current position.
3. Don’t expect every candidate to accept
Some small business owners assume their work is done once they’ve identified a suitable candidate, but it’s important to remember that potential employees can turn you down just as much as the other way around.