Small businesses face four major challenges when hiring in a competitive talent market.
By Marta Chmielowicz
For any business, hiring the right people is critical. But for smaller businesses that have to compete with enterprise companies, it can be particularly challenging to attract top talent from a limited talent pool.
According to a recent LinkedIn report, How Small Businesses Attract and Hire Top Talent, small businesses fueled significant economic growth in 2019, with 40 percent planning to hire full-time talent and 25 percent planning to add part-time help. Most of these hires came from referrals from current or former employees (49 percent), external recruiters (42 percent), colleges or trade schools (41 percent), or referrals from personal networks (40 percent).
But while most talent comes from employee referrals, the hiring process remains a major drain on resources for small businesses. Nine out of 10 small business owners say they are directly involved in the process of searching for, vetting, and interviewing potential staffers, with 40 percent saying this can take up to two months and cost between $3,000 and $5,000 per hire.
Small businesses also face four significant recruitment challenges.
1. Finding candidates and building a pipeline of qualified talent. Eighty-four percent of small businesses struggle to find qualified talent, but using a mix of hiring sources can increase the volume of potential candidates. Besides relying on job boards, engaging with job seekers on social networks and communicating culture through pictures, videos, and employee testimonials can improve hiring outcomes. Employers should also consider tapping into current and former employees, colleagues, and even previous candidates to increase referrals and reduce hiring time and costs.
2. Competing with better known companies for talent. Seventy-three percent of small businesses struggle to compete with larger organizations for top candidates. To solve this problem, talent acquisition teams should focus on brand storytelling and communicating the benefits of working for a small company. HR leaders should highlight current employee feedback in candidate outreach, job posts, and interviews, and humanize the brand by telling its story across social media channels.
3. Evaluating whether candidates will succeed in the role. The majority of small business owners (75 percent) struggle to choose best-fit candidates, but an effective job posting and interviewing process can help. Job posts should highlight the position’s goals and most important responsibilities, conveying the experience, technical skills, and soft skills necessary for success. Behavioral and situational style interview questions can then determine whether the candidate is a good fit by revealing their working style, past successes and challenges, and their motivation to learn and improve. Some examples of effective interview questions include:
- Tell me about a time when you felt you led by example. What did you do, and how did others react?
- Tell me how you would deal with an upset customer from one of our least valuable accounts.
- Let’s say you had to juggle several projects from multiple managers at the same time. How would you organize your time?
4. Having enough time to spend on the hiring process. Time to hire is a major struggle to small businesses, and 38 percent respond by leveraging online platforms to speed up hiring. But that is seldom enough to capture the attention of today’s job seekers; organizations need to make sure that they personalize outreach and maintain a human touch throughout the process.