3 Recruiting Challenges for Small Business (And What to Do About Them)

The economy is experiencing one of its longest periods of growth. Unemployment is at a near 50-year low. That’s good news but it can have unintended consequences for small businesses, especially when it comes to hiring. In a tight labor market, there’s stiff competition to find qualified candidates. That’s bad news if you need more staff to help grow your business. Here are some of the recruiting challenges facing small businesses along with ideas to help you address them.

Challenge #1: Competing with big-company benefits

Big companies often have big pockets. That means they can offer competitive salaries and benefit packages that include rich health insurance plans, 401(k) options or generous vacation policies. That’s hard to match when you have only three employees.

How to respond: Use size to your advantage. Small doesn’t mean inferior. You can offer unique opportunities that bigger companies can’t. Your employees get to wear many hats so they’re exposed to many facets of a business. They join a “family” where everyone pitches in. What they do really makes a difference to the company. That’s especially appealing to millennials who are looking for a place to apply their skills starting on day one. 

Think about creative ways to offer low-cost, but high-value benefits. For example, flexible summer hours, a dog-friendly policy, or working from home can attract potential employees. All create a favorable culture that will help attract as well as retain employees.

Challenge #2: Finding qualified candidates

Where have all the good folks gone? Posting an ad on a big employment website might get you a mailbox full of responses but yield few you can use. To find the right applicants, you need to look in the right places. That means taking a more strategic approach to recruiting. 

How to respond: Think about the kind of employee you want, then go to the places where they hang out. For example, if you’re looking for marketing talent, focus on high-value sources. For example, you can: speak at your local community college’s business classes, post in a LinkedIn groups for marketing professionals, sponsor refreshments at a local American Marketing Association chapter. Outreach activities like these help raise your visibility and establish meaningful connections.

Don’t forget one of the most valuable sources, your current employees and small business owners in your network. They know what kind of person is a good fit and can tap their own networks to help you find the right person.

Challenge #3: Making the right choice

“I just want to get somebody in place. I can always train them later.” Given all you have to do, it’s understandable why some owners take this approach. But it’s a short-term fix that can end up costing more. Rather than freeing you up to focus on other tasks, you spend more time supervising a poor performer. In the meantime, your customers suffer with poor service. 

How to respond: Change your perspective. Rather than trying to select the right candidate, deselect the ones who aren’t a good fit. With each step in the process, you should be narrowing the field. For example, your posting might use knock-out questions like “Do you have three years’ experience in the food service industry?” Any incorrect answer kicks them out of the running (so you can spend your energy on more promising prospects).

To do that, you need a clear understanding of the skills you’re looking for. That starts with an accurate job description. Take a look at these tips from the Small Business Administration.

Take full advantage of favorable economic conditions by hiring the talent you need to grow your business. These ideas can help you rise to the challenges facing small business owners in a tight labor market.

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