So you’ve decided to scale your business… where do you start and how does your hiring strategy fit in with those plans? Well once you’ve accomplished these 5 things to do before you hire your first employee, you’re ready to plan for scaling your small business.
HR and Its Role in Supporting the Growth of Your Small Business
There are approximately 6 million businesses in the United States that are employer based organizations. All but 20,000 of those businesses have fewer than 500 employees and of those 5.98 million businesses, the vast majority, somewhere in the neighborhood of 5.7 million of them, have fewer than 50 employees. When we are calculating HR headcount requirements for the businesses we support, we estimate 1 HR resource per 50-70 employees depending on the growth plans and experience of the leadership team. Simply put, the vast majority of small businesses don’t have enough work, or the budget, to justify a dedicated HR resource. Yet many business owners struggle to define and implement an overall business strategy because so much of it has embedded people related components.
5 Cost-Effective HR Strategies to Help Support Small Business Growth
As an HR firm, we specialize in small businesses. In fact, we only work with companies that have fewer than 500 employees and most of our clients have fewer than 50. We know small business: the budget issues, the people issues, and the leadership issues. Here are 5 cost-effective HR strategies that we have used to help our clients achieve their overall company goals.
1. Utilize Recruitment Process Outsourcing (RPO)
RPO is the term used for consulting firms that take over your recruiting process and operate as an integral part of your internal team. Different from agency recruiters, an RPO firm can and should participate in workforce planning, organization and job design, manage your employer branding initiatives and strategic recruiting, take responsibility for drafting coherent job descriptions, post vacancies, and source talent, train line managers in behavioral interviewing, integrate assessments into the selection process, draft offer letters, manage background and reference checks, and take complete ownership for the onboarding process.
RPO takes a little more time to ramp up than traditional agency recruiting. Your outsourced HR team will need to learn about your company culture and become familiar with your job descriptions in order to develop an appropriate sourcing strategy. Expect to wait 30 days before you see any real traction, but once it’s up and running, you can save anywhere between 30-70% as compared to agency recruiting fees. Because RPO is usually fixed price, the range of savings depends on the number of jobs you’re hiring for and the average salary. The higher the salary and the similarity of the roles, the higher the savings. More importantly, the resumes that land on your desk will be a better fit for your organization, not a simple resume triage and volume dump based on skillset.
2. Integrate Behavioral Interviewing into Your Recruiting
As part of the recruiting process changes that come with your BPO implementation, behavioral interviewing (BI) is key if you want to create a great team that can scale. Different from the traditional biographical interview and better appreciated than the ‘slow roast’ interview, BI focuses on asking candidates to share examples of past behavior and experiences that are relevant to the vacancy. Candidates love BI because there is no right or wrong answer, only their answer based on the response they had in the past to a specific set of circumstances. Hiring managers love BI because the best predictor of future behavior is past behavior.
We recommend training hiring managers in BI before they start participating in interviews. It’s not only how to ask the right questions, but BI training will teach them how to structure the interview, take appropriate notes, work with other interviewers to make a timely decision, and give feedback to the candidate in a way that reinforces their employer brand.
Separate from BI, but also important, it determines whether assessments should be incorporated into the selection process. Incorporating products like DISC with other psychometrics can provide valuable insight into candidates’ communication styles, motivators, and competencies.
3. Training Plan for New Hires
Once the offer has been made and accepted, we shift gears to preparing for onboarding. Much more than the traditional one day focused on HR administrative work, effective onboarding is more like an on-the-job training plan for new hires. It focuses not only on making sure the new hire is up to speed and effective in their job but also that they understand the company culture and values. A 90-day onboarding process increases employee engagement, reduces turnover, and saves money.
4. Invest in Employee Growth and Development
Once the onboarding process is complete and long term development goals are set, you can begin to think about, and budget for, ongoing employee learning and development. This does not have to be formal training courses, however. The most effective learning is on the job – so the budget question is more about planning and budgeting for the time for your employees to fully experience and assimilate the learning opportunities that you provide
5. Seek HR Support From a Human Resources Consultant
With thousands of other small business owners out there, know that you’re not alone. And, you don’t have to go it alone either. Our team of experienced leaders can help you navigate the murky waters of business growth. We are 100% aligned with your goals and will support you with innovative HR strategies that drive sustainable growth. Contact us.