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Small business guide to hiring new employees

two women on couch at work talking - hiring new employees

What’s in the guide?

As a small business owner, it’s difficult to know when to hire a new employee, as the timing has to be just right. This is why hiring for your business can be daunting.

Hire too early, and you risk running into cash-flow problems and having an employee with not enough to do.

Hire too late, and you might find yourself in a position where you’re spread far too thin and losing customers because of inferior and/or late products or services.

A business can’t grow without employees – or, more specifically, good employees.

While you probably feel like you couldn’t hire someone soon enough, you should take the time to carefully assess your current situation, think about your needs and the company’s, and find the right person. It will pay dividends if done correctly.

What you’ll learn about the hiring process in the guide:

  • Learn when to hire new employees
  • How to decide who you should be hiring for your growing business
  • Learn who you should be hiring for your growing business
  • How to go about recruiting to ensure you get the best person for the job

Let us help you take your business to the next level with our guide.

How to hire staff for a small business

Whether you are a small business owner or an HR manager, it can be hard to know when the right time to look for new employees. Most of the time, a hiring manager will come to you first, but how do you manage expectations and next steps?

How do you identify the teams that require additional resources when you have limited budget allowances (especially if you’re a small business)?

Add all this to the ever-evolving job market conditions, and it can be one heck of a ride.

Before making these crucial decisions around hiring employees, you must consider all of your options and weigh a variety of different factors. Thankfully, we’ve been there and have worked with many small business owners and hundreds of growing businesses.

We want to share some of our inside advice on the hiring process – how to know it’s time to hire a new employee and how you can best go about it.

1. Identify hiring needs

As a first step in the hiring process, you need to know when it’s the right time to start hiring employees.

There are two possible scenarios, the first (and most common) would be that a potential hiring manager comes to you and requests a new hire.

The second is that you or someone else within the business identifies that it may be time to invest in additional resources to help the business’ pain points or strategic growth.

For the first scenario, be involved in meetings with your manager to make sure you are checking in on their pain points and their suggestions on where they are lacking employees. They’ll also find it much easier to come to you when it’s time to expand their team.

The second scenario is a little trickier; how do you identify the teams that may require some additional support?

A few key things to look out for are:

  • Your business is missing growth opportunities regularly
  • Too much time seems to be spent on non-essential or admin-heavy tasks
  • Staff are stressing about their workload
  • Employees that are usually top performers are starting to slack – as their workload is increasingly difficult to manage
  • Overtime is becoming the norm – if you notice employees having to work double time just to get their day-to-day jobs done, this may be a sign it’s time to expand the team
  • Other departments have to chip in and help
  • Customer service or support is suffering

There are plenty of other signs that it’s time to start hiring employees within a business – keep your eyes open and ears pricked for any recurring problems.

We also recommend you look at industry data; are your competitors leaving you behind? What seems to be the benchmark?

2. Build a business case

If a member of the leadership has voiced concerns about a certain area of the business where they feel a new hire would be crucial – get them to write a business case.

This new hire will obviously require a salary which will need to be approved, most likely by a Head of Finance or Chief Financial Officer. This is where data becomes really helpful.

Inform the team leader/manager of exactly what they need to include within their business case in order to fight the corner for hiring a new employee.

We would advise the hiring manager to do the following to start building a business case for a new hire:

  1. Ask all team members to record their weekly hours over a 4 week period
  2. Gather information on competitor staffing and team structures
  3. Identify tangible business ROI of the new hire

If you can see that the hiring manager is struggling, it’s important to help. They’ll appreciate the support and you can help manage expectations early on.

3. Learn how and when to say no

It can be really difficult to reject a request for a new employee. After a manager has stated their case for a new team member and the business says no, expect some backlash.

Listen to their concerns, are there resources that already exist in the business that can be shifted to help lighten the load?

Create a plan for the next steps with the manager so that they feel supported regardless of the business’s decision. The last thing you want is a scorned manager, or worse, a manager resigning

Pro tip: Streamlining your recruiting process with HR recruitment software could reduce hiring costs.

4. Salary benchmarking

For any new job, you need to define salary expectations with your hiring manager. Working out what to pay your new hire is simple if you follow these steps:

  • List the tasks and responsibilities you want your employee to fulfil. Show what percentage of time you expect them to spend on each task. From there you can start to gather market research data;
  • Find out what other businesses are paying for the role you want to fill. The demand for certain skills can grow quickly, leading to increased salary expectations at times – so keep this in mind. Make sure you are always getting information that’s current and fresh.

A few ways to obtain accurate data are by talking to industry experts or people in a similar job role, using employment compliance and awards or simply Google it!

The web is a great starting point for finding out the average pay bracket for certain jobs.

Pro tip: Google “current year’s salary guide.” Lots of recruitment companies update their salary guides yearly or check out SEEK’s guide to salaries here.

5. Create a job description

Ok, so you’ve identified the new role that’s needed, built the business case for it, and now the role has been approved by the finance team, what’s next?

It’s time to create a job description. Crafting a well-written job description can help you find the best candidates and speed up the hiring process.

A job description should include all the information job seekers need about the role, such as the required skill set, key responsibilities, employment type, and the most important part – how to apply for the position.

After creating a job description, it may seem like the hardest battle has been fought (hello, internal politics!), but boy-oh-boy, the best is still to come… not!

Read more: What is employer branding in recruitment?

6. Promote your job advertisement

Deciding where to advertise your new job role and how to actually write the new job advertisement is a hard task.

Job postings should be concise and provide insights into the company to job seekers and entice them to apply. After all, the perfect candidate for you could be the ideal candidate for other competing companies as well.

Pro tip: If you want some help, we made a job advertisement template alongside 13 practical ways to create the perfect job ad.

Consider creating an employee referral program

As well as promoting your job ad publicly, make sure you advertise the new position internally.

Current employees are a LOT quicker to hit the ground running because they already know a bunch about the company.

Incentivising referrals is also a great way for your employees to speak up and refer a former colleague or friend.

Other avenues for promotion are your company’s website, online job boards, social media, job fairs and industry publications.

Read more: Create an employee referral program

Be involved in the hiring journey

If you’re an HR manager, it’s important that you’re involved early on in the hiring process. You will need to partner with hiring managers to help them qualify and build the business case for the new hire.

You’ll also be the link between them and the gatekeeper, whether that’s the CEO, CFO or financial controller within the company.

Also, it’s okay to say no. It’s important to develop the ability to have tough conversations when a role is not approved, or there isn’t the budget to add headcount.

Continue working with the hiring manager to address their pain points in other ways.

Learn more about what you need to know when hiring new employees.

Download our guide now.

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