Staffing Strategy for Small Businesses
Small businesses feel the effects of bad staffing strategies more than larger corporations. Although the hiring budget may be smaller, bad hires or missed opportunities have an outsized impact because the staff is smaller.
It’s never too late to begin implementing a more thoughtful long-term staffing strategy. If you plan on scaling your business in the future, the right staffing is paramount. Read through this guide to learn everything small business owners and managers need to know about strategic hiring.
Staffing Small Businesses vs. Large Corporations
Studies by the Wall Street Journal indicate that as many as 60% of American workers had jobs at firms with fewer than 2,500 in 2014. Creatives, in particular, enjoy working at smaller companies because they usually have more freedom alongside more responsibility and thus more limelight.
For managers and other decision-makers at small firms, that makes hiring policy even more important. Large corporations typically craft their hiring strategies as they grow and are more likely to make case-by-case exceptions to rules when the conditions suit. Small businesses may decide to take a similar approach, or they can have a less defined hiring policy overall.
However, some elements must be taken into consideration for a hiring policy to be as effective as possible. At a small business, individual team members are more likely to carry projects or share larger proportions of responsibilities. With the surge in remote work, hiring quality employees has become even more important.
Large corporations have the luxury of numbers. New hires can be onboarded and monitored by experienced employees or introduced to the team at a lower-level position and then work their way up once they have proven themselves. At small businesses, new hires often have to do more on-the-job learning and take on duties on a reduced timeline.
Key Components of an Effective Staffing Strategy
Outlining how job interviews are performed is only one aspect of how small businesses hire. Getting quality information about job candidates is vital, but to hire strategically a company needs to have definite goals set and build mechanisms for ensuring that staff remains at the top of their game.
Here are some of the things that small businesses should take into consideration when crafting or making changes to their staffing strategy:
- Big Picture Priorities
Every small business should have a mission statement that highlights its unique position and contributions to its customer base. What are you doing that no one else can do? Why are you uniquely qualified to provide the goods or services in your product line?
Designing new roles and hiring talent to fill them should always relate to this original mission statement. Although the company may take on new shapes as it scales, small businesses should continuously compare their hiring actions and their mission statement.
Prioritize positions based on the long-term goals of the company. For example, if you’re a company that endeavors to provide high-quality homemade goods, you might be better off contracting high-tech work when it’s needed rather than keeping designers on staff full-time.
- Quality Or Quantity?
Some small businesses need more hands available while others operate sophisticated systems that require more specialized skills and education. Restaurants and other small businesses with primarily customer-facing employees are likely to need larger teams while a software company would probably focus on having a smaller group of more specialized employees.
Whatever the primary product is, your small business needs to consider what kind of team structure will be most effective. The majority of companies will likely need a mixture of entry-level positions and highly skilled ones, but the exact proportion depends on the mission and industry of the particular company.
How will your small business attract the best applicants when a vacant role needs to be filled? Job boards have made it more convenient than ever before to find and apply to job postings, but they also create lots of noise and don’t guarantee that companies will find the highest quality applicants.
Teaming up with a specialized staffing agency is a great way to find top talent while also saving time and money. For instance, icreatives has many years of experience monitoring creative industries and connecting with the best creative talent. Companies who use icreatives as part of their staffing strategy find top-tier talent with a fraction of the effort.
Building an employer brand is another way to attract the best talent. When people connect your company with great jobs and fair benefits packages, they’re more likely to keep an eye out for new postings and apply when vacancies are advertised.
Once you have the best talent you can find, you need to be able to keep them around. Teams that work together for longer are more cohesive and streamlined to continue producing the best possible work without delay.
Consistent messaging is likely a goal of marketing and products for the majority of small businesses. Maintaining talent is a fast way to keep the voice and branding of products and services consistent over time.
Not to mention retaining staff for a longer period is also better for the bottom line. Hiring costs are kept to a minimum and there is a reduced need for training and onboarding brand new employees.
- HR Strategy
In addition to recruiting and retaining the best talent, staffing should also include considerations for training, managing, and rewarding employees. All of this falls under the umbrella of human resources.
One common mistake small businesses make is not putting effort into building their HR departments until their staff reaches a certain level. This can work out alright if there is someone on the team who is responsible for HR duties, but in many cases, companies build up a backlog of HR services and drop them on the first HR hire.
Building an HR strategy is the best way to show that long-term planning and a real staffing strategy are in place. It also makes things easier for employees and management, making the company better to work for and boosting the employer brand overall.
How Many Employees You Need For Success
A central concern for small businesses is how many employees you need for optimal operations. Hiring and staff costs make up a large part of small business overhead which means taking on too many new hires can sink a budget. On the other hand, being understaffed usually impacts profits and the business process overall.
Striking the right balance between understaffed and overstaffed is a challenge particularly when a small business is scaling or adding new services. Generally speaking, small businesses have fewer than 1,500 employees. But how many a given company needs depends on the circumstances.
A single family-owned restaurant may have just a few employees while a chain of gas stations could have dozens. Larger operations than span regions or countries likely have hundreds and may expand to the thousands or tens of thousands in the future, leaving their small business status behind as they grow.
To identify how many employees you need, a specific chart and list of needed duties and the roles responsible for satisfying those duties need to be made. Updating this list as new roles are created and filled will help the company stay on top of its staffing needs in the future.
Keep an eye on industry trends to reach a ballpark figure of how many employees you need. Many large companies formulate a certain revenue number that signifies when new employees are needed – for example, every $50,000 in newly generated profits indicates a new hire is needed or will be soon.
Other factors that may impact how many employees you need are advancing technology and automation. Some duties that formerly used to be done by humans are now performed by artificial intelligence or automated software, which gives many companies additional breathing room with regards to their hiring budgets.
Outsourcing & Insourcing for Staffing Small Businesses
Outsourcing is nothing new for most professionals. In almost every industry, technological advancements allow for certain parts of the business process to be taken on by other teams or companies outside the central company.
There is usually a large cost savings benefit that incentivizes businesses to outsource parts of their business process. But too many companies stop the train there without also benefiting from insourcing as well.
Insourcing is bringing outsourced duties back in-house. However, that doesn’t mean it’s always directly opposed to outsourcing. The trick is knowing what is most cost-effective. Sometimes building an entire team for a service that only forms a small part of the business process is not worth the time, effort, or risk. Other times bringing it in-house is cheaper and makes internal communication that much easier.
Advantages of insourcing also include more advancement opportunities for current employees, increased data safety, and more control over the final product. It would be ideal to have everything done under one roof from a control a communication perspective, but it’s often much less expensive to outsource at least part of the duties required to get products into the hands of consumers.
Key Roles In Small Businesses
Calculating how many employees you need and whether you should be outsourcing or insourcing duties requires a knowledge of the most essential roles. Different small businesses will naturally consider different roles to be indispensable. But there are some general positions that almost all small businesses are going to need.
1. HR Manager
We’ve already touched on how essential HR duties are and the unfortunate effects of waiting too long to hire someone responsible for them. Very small teams may not have enough HR work to support a position that is solely responsible for human resources, but HR should still be taken care of as part of a role somewhere.
2. General Manager
One of the most important key roles in small businesses is the general manager. Other employees need someone to come to with ideas and problems. Small companies may blend the general manager position with the owner/CEO role and take on a general manager as soon as the company is successful enough to begin scaling. In the earliest days of many small businesses, the general manager and HR manager may be the same person.
No matter how much business sense you may have, it’s unlikely you are also a highly skilled accountant. Keeping track of the books is imperative for any business and many accountants also know strategies for maximizing profits and staying within the law regarding taxes and other regulations.
Whether you’re a very small upstart or on the larger side of small businesses, you need to have effective messaging that informs your target market about your products and services and ideally entices them to buy. Marketing is important for bringing in potential customers and also the main way your brand presents itself to the general public whether they become clients or not.
It could be HR or it could be other parts of the day-to-day business process, but all companies will need people around who take care of the minutiae of short-term duties. Phone calls, mail, and supplies are some of the most common administrative duties that almost every small business has to consider.
6. IT Tech
With the huge increase in computers, software, AI, and remote working, hiring somebody to make sure all the technology works the way it should is a key part of making sure the company can continue working smoothly into the future. Other employees might be able to keep the phones and computers connected in the earliest stages of the business, but a cohesive tech strategy will almost definitely require a dedicated IT employee later on.
How Small Businesses Hire
The general procedure for creating a new role, advertising it, and performing interviews is nothing new to people who have been in the workforce for some time. However, moving through this process strategically is something else altogether.
To save money and take pressure off managers and other important decision-makers, outsourcing your staffing needs to a creative staffing agency is the smartest move. At icreatives, we have the industry experience and professional connections small businesses need to get the best creative talent on board.
If you want to know how small businesses hire in the 21st century, you have to understand how the internet has shaken things up in the last few decades. Rather than scanning newspapers or walking into small businesses to fill out paper applications, most people find job listings on online job boards or through social media networks like LinkedIn.
How small businesses hire with these social media and online platforms varies with the specific company, but there are some commonalities. The best results come from involving current employees as much as possible when creating new roles and hiring talent to fill them. This improves morale and helps build an internal company culture.
Staffing small businesses is easier than ever with the internet, but the human element of talent acquisition mustn’t be ignored. If you want applicants to stick with the process without giving up, make sure they have a contact within the company and have a comfortable interview experience.
Communication is key for staffing small businesses. Not only do prospective employees need to know who they should be talking to, but employees who already work at the company should also be talking and working together to define what new key roles in small businesses are needed and who the best candidate for the job is. Managers are responsible for communicating the mission statement and long-term company goals to the rest of the team to ensure that all of these goals are met with each new hire.
There is no uniform process that defines how small businesses hire. Filling key roles in small businesses requires a strategic approach to be as effective and affordable as possible. Luckily, as long as this essential duty is taken into account early on, hiring the best staff for a small company is easy to do.
Some roles are indispensable from day one and others only become necessary as the business grows. Prioritizing duties and aligning them with the company’s mission statement is key to effective hiring.
Small business owners and managers can use the tips and other considerations in this hiring guide to make sure they have the best talent possible and the small business has its long-term goals prioritized in every decision.