How your business can win the race to recruit new staff
Smaller companies can’t offer huge cash incentives for new staff, but they can still compete effectively for labour. David Prosser explains how.
How can small businesses compete in a labour market where so many sectors are struggling to recruit staff? Some large employers are tackling the crisis by throwing money at it, but at small firms spare cash is in short supply.
Still, small businesses do have certain advantages when it comes to recruitment and retention. Firstly, small can be beautiful: people, especially younger generations, increasingly want meaningful roles. It is much easier for small businesses to ensure all staff feel part of the company, with an important part to play, than for larger ones, where employees often feel like tiny cogs. And secondly, smaller employers have much more opportunity to be flexible and nimble.
The key for small firms is to play to these strengths. Can you use your flexibility to streamline recruitment processes so that people are interviewed and offered jobs quickly? Can you offer more flexible types of contract – part-time working, for example, or job shares? And, importantly, can you be flexible on how and where people work? Employees are increasingly keen to work more from home and to arrange their hours to suit them. This may be easier in smaller businesses that don’t have to manage a very large workforce.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Be imaginative about how you recruit. Traditional advertising can still work, but consider other channels, such as social media. Build links with local schools and colleges, as well as the government’s employment services. Drive word-of-mouth recruitment too. Can you get your staff involved in finding new candidates?
Casting the net more widely may also help. Focus on the personal strengths you’re looking for from employees, rather than their qualifications or experience. Technical knowledge, after all, can be taught. This might help you access a broader range of candidates – staff returning to the workplace after a period of caring, say, or people with disabilities, ex-offenders or refugees.
Your firm’s culture is also vital. Can you offer valuable learning and development opportunities, as well as career development options? Do staff feel their wellbeing is a priority? Is your workplace diverse and inclusive? Don’t answer these questions yourself: staff surveys and independent audits can be an excellent way to find out how people feel about working for you. Then you can make positive changes if required.
Getting this right means you’ll find it easier to retain staff, while happy employees can become ambassadors for your company. They may play that role informally, talking about your business as a good place to work, but also in more formal ways; for instance, getting good ratings on the growing number of websites where staff rank their workplaces can be a useful recruitment tool.
As for pay and benefits, be as competitive as your finances allow – and understand exactly what rivals are paying for staff you might recruit. If you can match that, great, but don’t be afraid to sell the other attractions of working for your business, which may be more important to many candidates. And if you’re struggling with headline rates of pay, there may be other benefits you can explore: everything from discount schemes with local retailers to more generous holiday terms, all of which might help sweeten the deal.
David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
Private school fees soar and VAT threat looms – what does it mean for you?
Rising private school fees could see more than one in five parents pull their children out of their current school. Before you remortgage, move house or look to grandparents for help, here’s what you need to know.
By Katie Williams Published
-
Best and worst UK banks for online banking revealed
When it comes to keeping your money safe, not all banks are equal. We reveal the best and worst banks for online banking when it comes to protecting your money from scams
By Oojal Dhanjal Published
-
Should your business invest in a VoIP phone service?
Here's what you need to know about VOIP (voice over IP) services before landlines go digital in 2025.
By David Prosser Published
-
The end of China’s boom
Like the US, China too got fat on fake money. Now, China's doom is not far away.
By Bill Bonner Published
-
What is the future of Royal Mail in the UK?
With fewer of us sending letters and parcels, the Royal Mail is finding dealing with the nation’s post is an increasingly unprofitable and costly business.
By Simon Wilson Published
-
What's the secret of Manolo Blahnik's success?
Fashion maestro Manolo Blahnik shows little sign of slowing down at 81, and his company notched up a record financial year in 2022. What is the secret of his success?
By Jane Lewis Published
-
Michelle Mone's "tough year of pain"
Michelle Mone liked to portray herself as a working-class heroine who worked her way to the top through grit and determination. But her pedestal is built on sand.
By Jane Lewis Published
-
Trevor Milton, the Elon Musk wannabe, is jailed for fraud
The former CEO of Nikola, Trevor Milton, has been found guilty of lying about the development of the company's electric trucks.
By Jane Lewis Published
-
Directors should think twice before waiving limited liability
Should small-business directors ever provide a personal guarantee in return for bank finance?
By David Prosser Published
-
Why Russia's economy is doing better than predicted
Sanctions were supposed to strangle Russia’s economy, but it seems to be thriving. What’s going on?
By Simon Wilson Published