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5 Tips on How to Avoid Bad Hires at Your Small Business

by BBB Staff BBB Staff | Apr 17, 2018 12:59:45 PM

Staffing a company is never easy, and every hire is crucial. A recent Score survey found hiring new employees is the biggest challenge for 42 percent of small businesses and Monster reports 62 percent of small business owners made a wrong hire. It costs an average of $4000 and 27 days to hire a new employee —that’s a lot of resources to spend aimlessly.

Bad hires can sink your entire company, and nearly half of small businesses find too few or no qualified applicants for job openings. Even worse, nearly half of all hires are made through employee referrals. One bad hire can open the door to even more bad hires, and the problems will only compound as customers flee from your business.

Before dedicating the time and money to hiring new employees, make sure you have a game plan to draw in only the best candidates for the role.

1. Maintain Accurate Job Descriptions

SEO isn’t just for marketing - it’s a vital part of creating a job posting too. A recent Jobvite survey found 42.9 percent of potential candidates use job boards to search for jobs. But that doesn’t mean you’re guaranteed to find your new employee just by posting your job opening there.

There were 2.1 million new job openings in 2017. It’s a big market, and you won’t be found unless you use descriptive and concise job titles and descriptions. While utilizing SEO for your listing will draw more views, quality trumps quantity. It’s important to ensure you’re drawing the right candidates.

For example, if you’re seeking a computer programmer to help develop your app, the terms “programmer” and “developer” are important. But there are hundreds of programming languages. A programmer who creates iOS apps in Objective-C will have trouble programming your Python-based Android app. Also, a database developer, app designer, and QC analyst have very different skill sets. By listing the exact job requirements for every position in your company, you’ll be sure to attract the right talent for each job opening.

2. Highlight Your Company Perks

Small businesses want to offer their employees the moon, but that’s not always possible. The Bureau of Labor Statistics maintains a database of salary data by industry and location. It’s important to stay close to this compensation scale, but keep in mind that large enterprises also offer 401k, health insurance, parental leave, and other perks that you may not be able to match.

Of course, not everybody wants to work at a large corporation. In fact, there are a lot of reasons small business trumps large corporations, and you need to attract talent that appreciates these differences.

The top two reasons employees consider working for a company are compensation packages and work-life balance. So be sure to mention amenities such as an office with a window, proximity to the beach or other attractions, casual dress code, stock options, or flexible schedules. While money is important, people will often be attracted to certain lifestyles that big business simply can’t offer.

3. Always Be Transparent

No matter what, never fudge the truth in your job postings. Glassdoor reports the average job applicant reads six reviews about a company before considering it. If you’re not honest about the company and position, potential candidates will find out by reading sites like Glassdoor,  BBB, Yelp, and even Google Reviews.

And keep in mind that what may seem like a negative about your company could be exactly the situation your perfect candidate is seeking.

An accountant in a large corporation, for example, may find the job tedious as they perform the same mundane tasks day in and day out. As a small business, you don’t need specialists in one field. Small businesses require team members able to wear multiple hats, so your accountant is often working on accounts payable, accounts receivable, taxes, payroll, audits, and more.

By being transparent, you’re more likely to attract people who excel in the environment you realistically offer. If you hide these facts, you’re going to end up with the wrong hire, and you have only yourself to blame.

4. Hit the Streets

Don’t count on an online ad to attract all the right candidates. Networking is a great tool to attract new talent, so get out of the office and get involved in the community.

Career fairs (especially at colleges) can be great places to find new employees. There are thousands of trade shows every year for every industry. These are gold mines of potential employees.

According to Forrester Research, the average CMO spends 24 percent of annual marketing budgets on live events. Any business conference, exhibition, or applicable live event you can attend is worth your time. It gets your company name out there, helping to attract new employees, clients, and vendors.

5. Onboard New Hires

As expensive as it is to hire an employee, losing one is even more so. Twenty-percent of employee turnover occurs within the first 45 days. Google found a way to increase its new-hire productivity with just one simple email, and it’s a good path to follow.

The hiring process doesn’t stop when the job is accepted. Onboarding is a complicated process, and it can take time to get a new hire used to the company culture and job expectations. A simple checklist to ensure open communication, mentoring, and monthly check-ins for new hires can make the difference between a good and bad (or even nonexistent) employee.

With this information in mind, your hiring process will be streamlined. While recruitment can be difficult, this foundation will get you through it. It won’t be long before your company is filled with quality people performing quality work.

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