How to find & hire staff for my small business

What are the advantages and disadvantages of hiring staff?

Hiring staff has advantages and disadvantages attached to it – and it’s important that you go into hiring with open eyes. So, let’s explore what some of the benefits and drawbacks may be:

PROS

Expertise
While you’ve surely worn many hats as a small business owner and learned a lot of skills that go beyond the actual product or service you sell, there may be some elements of running a business that you’re not as comfortable with. Hiring someone who is an expert in those areas will mean they’re done better and more efficiently than before.
More hands on deck
If you’re bringing on more people who are working on the main business, it may allow you to take on more customers and grow your business. Eventually there’s a plateau on how much a business can grow with just one person and more hands will allow you to begin a growth phase.
Developing the business
New people can contribute fresh ideas to the business. Gaining another perspective could lead to development of new products and services or even highlight things that could be done better. A new hire could help you think of new ways to expand or improve the business.

CONS

Less flexibility
There can be less agility or flexibility associated with having staff as you need to be available to them at certain times. If you’ve grown used to working any hours you want, that might not be feasible anymore. You’ll also have to consider how any decisions you make will affect staff, so it’s an extra layer to contend with in decision making.
More legal stuff
There’s some extra admin that comes with having staff such as dealing with PAYE, P60s, P45s and other financial documents. It’s a few new things to learn that you may not deal with if you’re currently a sole trader.
Extra stress – after a certain number of employees
According to our 2022 SME Wellbeing Report, 63% of businesses with more than 10 employees agree that worries about the business have held them back from doing as well as they would like due to the stress they feel. Only 34% of businesses without employees thought the same.

How much does it cost to hire staff?

The cost of hiring your staff will vary depending on their pay – remember you don’t always need full time staff and that part time employees, interns and apprentices might be an option with lower salaries that still help take some duties off your hands.

It’s important to note that wages aren’t the only cost you’ll need to think about. You’ll also need to factor in essential costs such as: employer’s liability insurance, employer’s national insurance contributions, pension contributions, sick and holiday pay and other statutory pay such as parental leave.

These can add up, so make sure you crunch the numbers before committing to a new hire! You can also consider freelancers or self employed contractors who will do work for you but aren’t strictly classed as an employee. This means your responsibilities for them are less and you won’t need to do national insurance contributions and won’t be legally required to have insurance that covers them.

Step-by-step guide to hiring staff

Hiring someone can be quite a process, so it’s important to do it right and get the best candidate possible.

Nearly 55% of candidates believe that it should take 1 to 2 weeks from the first interview to being offered the job. In fact, some studies have shown that 60% of job seekers abandon the application process if it takes too long or is too complex, so knowing what your next steps are and how to proceed in a timely manner is important.

Let’s look at some of the steps you’ll go through when making a hire so that you can be prepared when the right candidate comes along.

Think about the type of employee you want:

Each one of these options has benefits and drawbacks, so what will be best for you business is entirely up to what you need. Have a long think about whether you need temporary help or if short-term assistance is enough for now. Here’s a few things to take into consideration for various types of employment:

Full-time employees

Tend to be a longer-term investment and will often expect benefits that other workers don’t receive. They will be more productive and consistent than other workers though as this is their main job focus and they work on it regularly. You may develop a better rapport since you’ll be working together more frequently.

Part-time employees

There’s no set definition on what part time means so the amount of hours can vary. They have reduced compensation and benefits in line with their reduced hours so they may be a more affordable option for certain role that don’t need an employee working 40-hours a week. However, if you need a task done promptly it may be harder to navigate with staff that don’t work consistently or solely for you.

Freelancers

You only hire these people as and when their services are needed and strictly speaking, they aren’t employees. You would still want to interview and vet them before hiring, so the process is similar to that of an employee but once they’re on board, you have less responsibility toward them than you would an employee. However, they can be a bit more expensive since they deal with their own overheads and taxes.

Interns

Usually interns are still students, so they may not have as much professional experience as the employee types listed above. However, they usually cost less to hire for tasks because they have not yet achieved a qualification. Typically, they’ll work for a short time such as the summer break or one school term, so they’ll particularly useful as an extra set of hands on a specific project or a task that needs an extra push to be completed.

Apprentices

When you take on an apprentice, you’re committing to training this person to do the job you’re doing. Typically their pay is lower in exchange for training hours and you can keep them on once they’re fully qualified, know that they’ll do the job exactly how you want.

Write a strong job description:

Before you sit and write the job description down, make sure you have a clear reason why you’re hiring in mind. This will help you refine and focus the job description so that it really meets your needs.

Get the job title right

Make sure it’s one that people will actually be searching for – nothing too obscure or niche. Make sure the title also reflects the level of responsibility in the job duties.

Be flexible about the location of work

Consider where the person will be based. Give details on the city and whether or not they will be needed at a certain location. Certain roles such as a gardener or a hairdresser will be needed on site, but perhaps an accountant could work remotely. According to 2019 research by IWG, 80% of candidates said they are more likely to work a job with a flexible work option than one without. So, you should consider whether or not you can create a hybrid arrangement where relevant.

Give a clear role and responsibilities

Give prospective employees an idea of what a day in the life of this role would be and how their work would contribute to the business goals. This section is the most important as this will ensure you get someone with the right skills and interest in the job you need done.

Don’t go overboard on the qualifications and requirements

If there are any requirements for the role such as a qualification, experience, or a driving licence, be sure to list them. Don’t add to many requirements as you may deter qualified candidates from applying. Only make it a requirement if it is truly necessary to do the job!

Be upfront about remuneration and benefits

Detail a salary range and any benefits that you’ll be offering. Listing a salary in the job description can help get the right candidates and reduce the chances of pay discrimination. If you’re unsure what’s a reasonable salary to offer, try using an online salary tool.

Chat about your company culture

Talk a bit about your company and what makes you special. You love your business, so make sure that passion comes through.

Promote the job – online and offline

Once you have a great job description and title, it’s time to put that out into the world. According to a 2021 study by Career Arc, utilising social and professional networks were some of the most popular recruiting strategies followed by referral programmes. Job boards and job ads were the third and fourth most popular, respectively.

Using a combination of these methods will give your opening a pretty wide reach and enable job seekers to find you in a variety of ways. Some of these methods will cost money, so be sure to include that in your hiring budget.

Prepare to interview candidates

First decided whether you’re having in-person or virtual interview. Where possible, virtual interview can be more convenient and easier for your interviewees, but if you need a candidate to demonstrate certain skills during the interview, then it may be necessary to conduct them in person.

You’ll also want to prepare a list of questions for candidates. It’s recommended that you have the same questions for each interview that way they can all be compared fairly, and it reduces the risk of bias.

Make sure your questions directly connect to the skills needed for the job. Often asking for examples of when they have done similar work or how they have approached a comparable task will really help you understand the candidate’s thought process.

At the end, always ask the candidate if they have any questions for you. Remember, an interview is a chance for both parties to gauge if they can work together so you want a candidate to feel your business is the right place for them as well.

Top tips for hiring employees

Before you sit and write the job description down, make sure you have a clear reason why you’re hiring in mind. This will help you refine and focus the job description so that it really meets your needs.

Avoid biases:

When hiring, you need to make sure that bias doesn’t affect the process. Bias happens when you form an opinion about candidates based solely on first impressions or assumptions rather than on their merit and ability to do the job.

Affinity bias

This means hiring someone who has similarities to yourself and who you may feel an affinity with due to similar backgrounds. Asking candidates about their personal life, hobbies, or things that aren’t related to the job can contribute to this bias.

Confirmation bias

This means subconsciously seeking evidence to confirm our initial impression of someone was correct. Even to the point of ignoring signs that our initial impression was wrong. Having a scoring matrix that is used in every interview can help keep you on track in evaluating candidates rather than relying on a gut feeling.

Beauty bias

It is statistically proven that beautiful people do better in the world of work. You may unconsciously assume that the most attractive applicant is the most qualified or likely to be successful in the role.

Conformity bias

This is essentially a form of peer pressure where you hire someone because you’ve been influenced by the opinions of other assessors or interviewers. To avoid this bias, it can help to have everyone complete their scoring or notes on the candidate prior to any group discussion.

Generally, standardizing your interview process can really help to avoid these biases, though it’s hard to eliminate them entirely. Asking the same questions and scoring candidates to the same criteria matrix can really help, as can taking notes so that you’re not relying on an impression later.

Where possible, also having more than one person interviewing can help avoid bias as there’s more feedback from diverse people, rather than having just one, possibly biased, interviewer.

Build a diverse team:

There are many ways to make your hiring practices more inclusive, starting with avoiding any gendered language in the job description and reducing the paperwork and hurdles people must go through to get hired.

Having a simplified and relatively short hiring process can really help make your job application more accessible for people.

Diversify your network through online or in-person groups talking about diversity in your industry and make sure you’re intentionally putting job postings in places where a diverse group of people can see them.

For more ideas on building a diverse team, check out our articles on disability inclusion and diversity in small businesses.

Remember people can be trained:

Some degree of flexibility in hiring can really help you find the right candidate. Consider accepting transferrable skills from other industries. Spend some time thinking about comparable experiences and how they fit into the role rather than only looking for directly matching experience.

It’s also important to remember that many skills can be learned on the job, so requiring minimum qualifications may deter applicants who would be a great fit after a bit of training. Oftentimes, requirements like minimum years of experience can contribute to bias against younger applicants who could do the work but don’t have as many years of work under their belt.

Should I hire a manager?

Sometimes you’ll need a senior staff member to join your team rather than an entry level employee. They can help if your team has gotten big enough that you need some help with handling other staff members or you want them to manage a specific part of the business for you. Having manager in the title can attract more experienced employees, but it usually comes with a bigger price tag as well, so there’s quite a few things to consider.

Managers don’t need to be full time either, so that may help when planning the costs of taking one on. If you’re in the service industry, a part-time manager could help fill in that leadership gap when you’re not in. Or if you have a specific project that needs a leader on it and you don’t have the time, a contract-based manager could be really helpful for you.

If it’s someone to look after employees or day to day operations, then a full-time manager may be your best option. Carefully consider your needs and choose based on that!

What skills to look for in a manager

The skills you’ll look for depend on what kind of manager you need. For example, a finance manager will need to be adept in financial planning, cash flow analysis, and budgets while a marketing manager would need skills such as social advertising and branding.

In general, though, a manager should be able to be self-directed, make decisions confidently, manage and allocate budgets and have excellent communication and leadership skills. Usually, a manager will also have a bit more experience in these areas than the average worker.

What is the cost of hiring a manager?

You’ll have the usual costs of hiring an employee such as the cost for posting the job adverts, paying national insurance and more. However, the salary for a manager tends to be a bit higher than the average employee. According to the Office for National Statistics (ONS), the mean national average salary in 2021 was £38,131 for a full-time employee and £13,549 for a part-time role.

It is worthwhile to research the average salary for your specific area and then budget roughly 10% to 15% above that for a filling a managerial role.