Why Small Companies Need to Implement HR Strategies to Improve Employee Recruiting and Retention
Being an entrepreneur is exciting—from the thrill of creating your own product or service to building your business your way without having to answer to someone else. You call the shots and you use your expertise the way you see fit.
This is such a popular path that according to the US Small Business Administration there are over 28 million small businesses in America and they employ 55 percent of U.S. workers and have continued to create two-thirds of the new jobs in America for nearly half a century.
With all of the energy, drive, and passion that entrepreneurs possess, does that also indicate small businesses have figured out how to attract and retain top talent? ADP Research Institute published study that consistently shows the two of the top concerns from small business leaders are recruiting great people and retaining top talent. Many entrepreneurial leaders wrestle with these common pain points concerning talent.
So what is a small business leader to do? One factor to acknowledge is even though you may not be able to compete head-to-head for talent with larger companies on every aspect of the recruiting and job offer process, small business leaders should leverage and highlight the aspects that make working for their business superior.
You have an opportunity to attract and retain great talent if you institute an HR strategy for both. Here are key areas of focus that have proven successful for small businesses regarding the battle for talent:
Be on the lookout for passion
Focus the recruiting efforts on people who are passionate about your business or market space, and hire those with a great attitude. This will mean different things to different leaders and businesses. If you have candidates with the requisite skills and a positive attitude, they will usually take you farther than a technical guru in your particular discipline with a mediocre to poor attitude.
Know your talent attraction
The knowledge worker and Millennial are often the target hire for small business in the U.S. Many are attracted to the entrepreneurial opportunities, smaller environments, and work/life balance over significant financial rewards. Those are great candidates, however, to make the best hiring decision, you must identify the skills, attributes, and behaviors that are critical in your company to find the right fit.
Developing and training talent
The challenge after employees are hired, is that it is incumbent on the business to provide professional and personal learning and development opportunities to advance and drive their career. There are many first-rate online training resources available at reasonable prices to offer your employees. To make the most of these investments of money and time, it is important to have a structured process in place in which these training resources are rolled-out and measured.
Promote your differentiating factors
Small business owners need to understand and market what they have created and instilled in their company that makes them standout against its (larger) competitors. This may include key items like transparent communication, consistent and equitable goal setting, feedback and accountability model, opportunities to contribute in broad aspects of the business, cool technology, fun activities or events, and maybe even food.
These are critical components to success for small companies, and yet many business leaders are unaware or uncomfortable with how to imbed these into their culture to drive their business.
Reward your talent
Granted, not every small business is able to match compensation packages with some of the big companies, however utilizing some type of bonus structure for exceptional results and some type of company equity as a retention and incentive, can go a long way when combined with some of the items listed above.
Entrepreneurs usually venture out on their own to start companies because they have a particular expertise and can deliver a distinct product or service into the marketplace. For as great as they are at delivering on their area of expertise, those same leaders also need to acknowledge that HR strategies or practices may not be their wheelhouse. There are plenty of professional networking and online resources in which leaders can utilize and begin building their own HR strategy.
Often business leaders attempt to implement an HR strategy, underestimating all that is involved and the challenge that it can entail, thinking “It’s just people stuff, right?” When things are not working out the way they had envisioned, or worse they have BIG HR ISSUES, they usually need to hire a professional HR expert to correct the problems.
Needless to say, contacting someone who has that HR background and expertise to help develop and implement a sound HR strategy before they have lost their best talent, or have an unruly employee issue, can save a lot of time and money, and isn’t that important to every business?
This particular type of HR strategy goes far deeper than transactional and statutory components; it is about relationship management as well as the alignment of the company vision, mission, values, and people practices. Ultimately, it is a mindset that your talent is the most important asset in your business, and the investments of time and money need to be considered ‘Capital Improvements’.