The Extra Challenges of Hiring for Small Business

Scott Kuethen

July 25, 2016

Does your small business know how to develop a solid hiring process? As Small Business (fewer than 100 employees) is growing rapidly, so is the need for best practices in hiring. While corporate America has been downsizing, the rate of small business start-ups has increased, according to the SBA (U.S. Small Business Administration). Although not all of the 28 million small businesses in America are employers, says the SBA,  between 1990 and 2012, “as big business eliminated 4 million jobs, small businesses added 8 million new jobs.”

Of the 5.9 million employers in the USA, 5.8 million are categorized as Small Business.  Small Business employs roughly 23% of all employees in the US, yet there’s no denying the extra challenges of hiring for Small Business. 

 You might ask, Why would Small Business have a disadvantage when it comes to hiring? That’s a great question. Consider the typical Small Business enterprise. They’re entrepreneurs, boot-strappers, optimists who believe they can do it better than the rest. They’re not afraid of competition, and they believe in themselves. To a fault, they’re almost always outstanding technicians in their field, rather than trained systems-minded business people. They see challenges and run toward them. These are all wonderful qualities.

Often, however, what the typical Small Business doesn’t have is the knowledge for how to develop a solid hiring process. When it comes to attracting and retaining the right talent, best practices for hiring can make all the difference. Unlike the big HR departments of Fortune 500 companies, the typical Small Business CEO/President isn’t familiar with those best practices. As a result, his or her hiring practices are often underdeveloped and can lead to less-than-optimal hiring. 

Case Study: The typical Small Business needs to hire a Customer Service Representative (CSR). This is a line-level, individual role. How hard could this be? Jim Smith, Founder and CEO of Ace, Inc.,  has 60 regular full time employees and specializes in selling and supporting a technology product. Once Jim has made the decision to hire a new CSR, he creates a job description. He’s never really had a job description for this position in the past because he’s always hired friends, friends of friends, or employee referrals. But his own resources are tapped out, and since he’s recently lost several employees to competitors, Jim wants to make a good hire.

 Jim does his best to list out the logical elements of a job description. This includes the position title, who it reports to, a compensation target supported by what he’s currently paying another CSR, the job responsibilities, and the education and experience he wants in the person he hires.

 Next, Jim posts his job description on the Internet somewhere (maybe Craig’s List) and hopes to get candidates. Over the next few days Jim’s email account is flooded with resumes. Unfortunately, there are so many resumes that it’s overwhelming. Jim has difficulty making the time to read through all the resumes. As he tries, he discovers that many candidates don’t even have the basic minimum experience he’s listed in his job. Several resumes seem to be written with almost the exact language he used in his job description. What a coincidence…or not. Now what?

 Jim does the next logical thing. He just picks a couple of the best-looking resumes and begins calling the candidates. At first, because Jim doesn’t do this very often, this is awkward. But eventually, Jim gets the hang of it. After talking to five candidates on the phone, he schedules three of them to come in for personal interviews.

One by one, the candidates show up. Jim spends about an hour with each of them. Jim’s not quite sure what he should be asking, so he just wings it, assuring himself he knows a good person when he meets one. Guided by his gut intuition, he asks interview questions like, What makes you a good CSR? What would you do if an angry customer calls in with a complaint? What do you do for fun outside of work? At the end of the interviews, Jim decides he should invite the top two candidates back for a second interview with his CSR manager, Susan.

Susan’s no better prepared for the interviews than Jim. She interviews the top two candidates and selects the one she just clicked with the best.  Jim and Susan share their frustration that the more time they spend in this process, the further behind they get in their normal workload. As soon as they make the hiring decision and put together the offer letter, both leaders are relieved and immediately return to their backlog of work.

And that’s the typical Small Business hiring process. The problem is, there’s very little science, system, or consistency to it.  In the end, this hiring process is more likely to result in failure than success. Here’s why:

An Incomplete Hiring Process

The answer lies in several critical steps that have been missed or minimized. When building the position profile, Jim didn’t think to define the personal characteristics or competencies required for success as a CSR. He also failed to define the outcomes or results his CSR would have to achieve in the first six months of work to be considered a success. Jim also didn’t think about researching the market compensation rates for CSRs in his area.

 Next, Jim read through resumes without the benefit of any objective scoring system. The more resumes he read, the more the quality of his resume evaluations declined. Resume reading is a tiring effort. Had he built a simple scoring system, he could have breezed through more resumes in less time and with greater accuracy.

 When it came to interviewing, Jim didn’t know how to prepare, so he just winged it. He asked leading questions where the preferred answers were relatively easy to guess by the interviewee. As he moved from one candidate to the next, Jim changed his questions, so he couldn’t actually equally compare the answers. In the end, Jim and Susan selected the person with whom they “clicked” the best, rather than doing any objective review of the candidate’s competencies, past achievements, or work history. And when reference checking, they spoke to two past bosses whose phone numbers the candidate offered, instead of digging for past bosses where the candidate didn’t appear to have a successful work record.

 Finally, once Jim and Susan made the hiring decision, they thought the job was done. But had they used SMART Goals (Specific, Measurable, Attainable, Relevant, and Time-bound) to define success for their newly hired employee, at least their new employee would have a way to track his or her own success and know what it would take to make the new employer happy.

How to Develop a Solid Hiring Process

Let’s review the simple, systematic components of a sound hiring practice:

1. Position Profile

Beyond a job description, here’s what a Position Profile defines:

a.     Mission of the position (the central objective)

b.    Responsibilities

c.     Competencies required for success (click here for more about a free behavioral interview guide)

d.    Outcomes/Results for the first 30, 60, 90, and 180 days, articulated as SMART goals

e.    Education and Experience

2. Resume Scorecard

This is a simple list of the objective criteria that must be present in the resume of every viable candidate. Referring to this list when screening resumes is the best way to remain objective when wading through a volume of candidate resumes. Without this, they can all start to blur together.

3. Screening Questionnaire

This tool is used to screen candidates who appear to have good resumes. Because resumes are a poor predictor of future success, a well-written screening questionnaire with open-ended questions (called behavioral interview questions) will save many hours of in-person interviewing of the wrong candidates. For the CSR position, one question might be, “Tell me about a past mistake and what you learned from it.” Beyond showing you how a candidate thinks, here are four good reasons to employ a screening questionnaire:

a.    It scares away lower-quality candidates who aren’t interested in investing the time to complete the questionnaire. Depending on the position, you may find that as little as 25% will actually complete the questionnaire.

b.    It exposes candidates’ written communication skills. You’ll quickly learn about candidates’ ability to express themselves in writing. This is a pretty important quality for a CSR.

c.     It reveals candidates’ response time to an assignment. Wouldn’t it be nice to know how your potential new employee will respond to a work assignment? Using the questionnaire will help you evaluate them in this area.

d.    It uncovers other pertinent information. You can include other general questions in your questionnaire that will give you insights into past achievements, reviews, compensation, and reasons for past job changes. 

4. Interview guide

Once you’ve identified the competencies you believe are required for success, you’ll be able to construct behavioral interview questions that will reveal the candidate’s level of competence in specific areas. Too often an interviewer asks a interviewee if he or she is a good customer service representative. A better question might be to ask the candidate, “Tell me about a time when you encountered an unhappy, unreasonable customer.” You’ll learn far more about the person’s interpersonal skills from the latter question than the former. (For more instruction on behavioral interviewing, click here.)

5. Reference Checking Guide

During the interview, ask candidates for the names and contact information of past bosses, and then follow that with the question, “When I call Bob, what will he tell me about the work you did for him?” Of course you’ll follow up with Bob if this candidate ends up being someone you’re interested in hiring.

6. On-Boarding

In the past, people thought of on-boarding as a matter of filling out the required paperwork and providing a layout of the office. But experience has shown that your new employee starts off better when you prepare by giving him or her a roadmap to success. That’s why Amtec customers receive our Great Start Tool which provides this roadmap for new employees. Here’s what that would generally include (for more detailed information, click here):

a.    Outcomes/results that you expect to see in the first 30, 60, 90, and 180 days, presented as SMART goals 

b.    Identifying the internal relationships they’ll need to have to establish credibility and success

c.     Current projects with which they are going to engage

d.    Customer or vendor relationships where there’s an unusual expectation

e.    Internal meeting habits of the workgroup to which the new employee will belong

f.      Company calendar

g.     Communication preferences of immediate supervisors

 Hiring is such a critical function for all businesses, but the extra challenges of hiring for Small Business can make or break your next hire. It pays to get it right and learn how to develop a solid hiring process. Once you understand the best practices used by the nation’s Fortune 500 corporations, you’ll see that making a great hire is well within your reach.

 If your own best practices aren’t producing quality candidates and you’d like an Amtec recruiter’s help, click here or call (714) 993-1900.