One of the first things a small business or startup has to do is to hire new employees to accompany and grow the company. However, if the company does not have the experience, it will easily lead to mistakes in the recruitment process. Here are some common hiring mistakes that small business owners often make, let’s consult!
1. Common hiring mistakes made by small business
1.1. Poor Job Description
The first step in hiring is to prepare a clear job description. That shows what you’re looking for in a new employee and the benefits the company offers the candidate. However, many small business owners do not take this seriously and do not have a clear and specific job description but want their employees to be able to do it. Many potential job candidates are willing to skip the job without specific job information, so you need to focus on building a clear job description.
1.2. Unorganized recruitment process
Any process that is not codified will create unwanted complexity and delays. So to remove these complications from your recruitment process, the second step is to set the standard for your hiring process, even if you are hiring a few employees. You have to plan how to start and end well, otherwise, you may find yourself in a hurry in the process and hiring the wrong way. Focusing on development and hiring quality candidates will call for AI tools here. With this user-friendly interface, you can quickly filter candidates for opportunities. You can track your progress and it will also give you the best chance of hiring the best candidates.
1.3. Passive recruitment
Instead of relying on job seekers to find you, take the initiative to find them. Active recruitment is one of the steps you can take to avoid common hiring mistakes. We can start by determining where the ideal candidates spend their time such as professional conferences, online groups, etc. Gather information about candidates from these sources and save them in your pocket for future reference. When there is an opening for a related post, you can contact them quickly.
1.4. Not recruiting enough positions
Most small business owners often hire very few employees to save money. This is an understandable general mentality for a startup with limited resources, but once you decide to expand make sure you have the required number of candidates. Small business owners often have their current employees multitask before looking for new candidates. This may sound beneficial to you, but as time passes, under the stress of the job, the old employees will be discouraged and choose to leave while the new hires are not much experienced. Therefore, do not be foolish to exploit your employees’ labor.
1.5. No training for employees
Small businesses do not realize how important the training aspect is. Providing training to employees will enhance their skills. The result is increased productivity and better business. Training should play an important role in the staff referral process. If you want to see your employees as company property, provide mandatory training.
Above are some common hiring mistakes that small business owners often make in the recruitment process. When you own a small business or startup, you will be busy with many things. However, to grow your business you need to have a thoughtful investment right from the recruitment stage to hire great new employees.
1.6. Misclassification of employees
Employees and independent contractors are handled differently, so it's vital to understand which one you're working with. There are substantial consequences for classifying an employee as an independent contractor by mistake (or on purpose), including penalties, fines, and other costly tax-related consequences.
The Fair Labor Standards Act defines what constitutes an employee or independent contractor, and understanding the distinction can help you deduct the correct taxes, comply with overtime pay rules, and keep your firm running efficiently.
If your HR department consists of just you, and you're too busy operating your day-to-day operations to become an employment law specialist, consider outsourcing the duty to a business that can assist you in staying in compliance with the regulations governing employee classification. Several excellent organizations assist small businesses handle HR without the oversight of a dedicated in-house specialist.
1.7. Inadequate workers' compensation coverage
As tempting as it may be to forego some forms of small company insurance to save a few dollars, those few pennies will not be worth the large expense afterward if you are caught without having workers' compensation insurance. Most states demand worker's compensation as soon as you hire even one employee.
This small company insurance coverage is intended to assist in covering missed earnings and medical expenses if an employee is injured or becomes very ill. It's not just prudent to have a safety net in place to save your employees from drowning in debt; it's also mandatory if your state demands it.
It doesn't take long to be insured and the cost isn't nearly as high as being caught without it. So, if you believe you might hire even one person shortly, seek inexpensive workers' compensation insurance and get compliant as soon as possible.
1.8. Not preparing for turnover & onboarding costs
High turnover rates and onboarding expenses may be a headache for any firm, but they are especially damaging to small enterprises. Knowing how much it will cost to hire a new employee (in terms of training, perks, and so on) and predicting the cost of losing an employee might help you preserve some buffer between you and the expense of having staff.
Keep in mind that these prices will alter as your company expands, so you should reassess them as required.
1.9. Ignoring the importance of culture fit
On paper, an applicant may appear to be the "ideal" candidate for the position, but if he or she does not fit neatly into the culture you've been cultivating for your company, the connection is unlikely to last.
You could need to locate a replacement, which can slow down operations and cost money in onboarding. Worse, an employee who slips through the cracks and turns out to be a lousy cultural fit has the deadly capacity to poison your company if you let it. Make sure you thoroughly evaluate new personnel before allowing them to join the company.
Concentrate on selecting someone with the necessary experience to execute a great job, but more importantly, someone who reflects the values and traits you specify as essential to preserving your ideal workplace culture. After that, this new employee will become a part of your company's culture and help shape its future.
1.10. Leaving out background and reference checks
Another area where small company owners frequently disregard best practices to save money is properly investigating and assessing potential new workers. After all, background checks are costly, and if you own a restaurant, you might not need security clearance or caliber workers.
However, if you own a daycare, you must feel that the integrity of your new hire's past is significant and extremely vital to your consumers.
Reference checks, on the other hand, are free of charge and should be included on your new hiring checklist.
When recruiting a new employee, always request both professional and personal references, and follow up with each one before making a job offer. Even a two-minute phone call to confirm a reference can save you money in the long run.
These are just a handful of the most typical blunders small company owners make when employing personnel. The good news is that they are largely avoided. It makes sense to invest a bit extra upfront, follow the insurance laws, and take a few minutes to assess each application before bringing them on board. Outsource when necessary, and take the time to establish a staff you can rely on in the long run.
2. Tips to avoid common hiring mistakes for small business
2.1. Create a well-defined hiring plan
Determine the number of processes and people involved in your hiring process, from applicant sourcing through screening and interviews to onboarding. After all, top prospects leave within 10 days of being hired. Making a strategy will help you prevent last-minute chaos.
2.2. Identify the job requirements and expectations
Understand what looks nice for the role. Make a list of your expectations for the applicant. This phase is critical since it will determine if you should recruit a full-time employee or a freelancer/contract employee. It also assists you in avoiding problematic recruits and establishing the proper hiring calibrations with management.
Furthermore, if you outsource employment to external contractors, this step will assist them in discovering qualified applicants for you.
2.3. Write a compelling job description
Before you write the job description, consider what the candidate expects from you. Investigate the most recent applicant expectations, competitive offers and benefits, jobs given, courses and training materials, professional advancement chances, and so on. It is not just about what you can get from the prospect, but also about what you can provide them. Explain why they should join you.
2.4. Use the power of referrals
Your staff can be of great assistance in locating a suitable individual. They understand what the organization is seeking and may recommend people that adhere to the corporate culture.
Companies generally reward staff to recommend additional people. For references, you may also leverage your LinkedIn network or contact your business mentors and ex-colleagues.
Get top-notch Staffing and Payroll solutions from TSC in Asia. Our services, including Staffing and Payroll Outsourcing, BPO/RPO, and BOT model, enable businesses of all sizes to hire and operate cost-effectively. Since 2018, our recruitment team has provided candidates in diverse fields catering to specific client needs, from junior to management positions.