How to Hire the Right Employees: A Guide for Small Businesses
Last updated: 2021-05-27 (originally published on 2017-10-03) — by Alex Tanglao
As a small business owner, the process of selecting and hiring new recruits can be both exhilarating and stressful. Every hiring decision that you make incurs time and resources, and you will only see a return on your investment further down the line. Here, we give you the top tips for optimising your hiring process to select the right talent despite limited resources.
Decide between an employee or a freelancer
The first step to hiring the right employees for your company is to determine whether you really require a full-time employee to fill the role. It may be the case that hiring an independent contractor (otherwise known as a freelancer) may offer greater flexibility and better meet the needs of your business. For example, an independent contractor can provide an independent opinion or give you access to a wider network and cheaper resources. There is also the option of converting a freelancer to a full-time hire if you like the work produced.
Related reading: The Differences Between An Employee and Independent Contractor
Hiring a Full-Time Employee vs a Freelancer
- Cost. Given that freelancers may not be entitled to certain statutory benefits (e.g. insurance), engaging a freelancer for a fixed-term project may help you save on costs (e.g. office space).
- Risk. Engaging freelancers may reduce your risk as an employee since they may not have the right to statutory benefits and are easier to terminate and replace if the engagement is not working out.
- Quality. As freelancers do projects for a range of clients, they typically come with more experience and strive to put in their best work in order to maintain a good reputation.
- Global Reach. If the work can be done remotely, engaging a freelancer gives you access to more options, especially if you want someone with a specific skill set, background or prior experience.
- Availability. Compared to freelancers who may be working for a range of clients at any given point in time, employees are committed to be available on your schedule and you can manage their workload accordingly.
- Relationship Building. If the nature of the role is one that involves building and maintaining a client base, it is beneficial to have a full-time employee who knows your company inside out and can leverage that knowledge to their advantage.
- Training and Supervision. If the role is one that has long lead time for training and requires oversight, it might be better to recruit a full-time employee whose progress you can monitor.
- Commitment. A full-time employee is more likely to feel a greater degree of commitment to your company and therefore be more motivated to add to the bottom line.
Adapted from Recruiterbox
Be aware that there are also different rights and obligations your business has when hiring an employee or an independent contractor. The Employment Contract you sign with your employee establishes an employment relationship and creates a legal duty that your business has towards the employee.
In contrast you will sign a Consultancy Agreement for a freelancer, which should make clear that there is no employment relationship created.
Further readings: How to Select the Right Freelancer for the Job
Use job portals to find potential candidates
Job portals allow you to reach a wide audience and help you find the best applicants for the next stage of the hiring process. In Singapore, apart from Jobs Bank, which is a free government-run platform managed by the Workforce Development Agency, there are a whole host of other job portals that you can check out. In Hong Kong, there is Jobs DB and Career Times.
Related reading: 4 platforms to source freelancers in Australia & New Zealand
With the increasing popularity of freelancing among millennials, there are also a number of online platforms as well. As a small business owner, you can capitalise on this trend by leveraging portals such as Freelancer and Upwork. These allow you to link up with freelancers with the relevant skills, and evaluate them over a number of assignments.
Build a compelling case for your company
Remember that planning ahead is also key to optimising hiring. Whether or not it is an employer’s market, your potential recruits are evaluating you just as much as you are evaluating them. It is thus essential to articulate the requirements of the role and why your company is an attractive proposition. The key component of this is job descriptions. According to a Wall Street Journal article, job descriptions that read like laundry lists of requirements and qualifications may alienate jobseekers.
What Do Employees Stand to Gain?
Apart from setting out what your company expects from the candidate, also include what your company can do for potential employees. This in turn may help you attract higher quality candidates. Insert statements such as “We seek to provide employees with constructive feedback to foster their career growth,” and “You will have many opportunities to collaborate with talented people” when advertising the opportunity.
What Makes Your Company Unique?
Additionally, keep in mind that job seekers are scrolling through a ton of job opportunities. Showcase what is unique about your company in order to be memorable for applicants. Effective examples are by sharing recent media coverage or stating upfront your benefits package. If you don’t want benefits packages to be the focus, emphasise your unique company culture. Do you have a collaborative work environment or provide a lot of opportunities to gain exposure to a range of tasks?
The hiring process is often a two-way street – while you are looking to hire the right employees, people are looking to apply to the right companies and jobs. Many potential applicants will head over to your website to learn more about what your company does and what the role entails. This is typically a candidate’s first impression of the company, so ensure the website is accessible, presentable and easy to navigate. Give potential applicants an idea of what it would be like to work at your company. Including a Careers section or putting up profiles of team members are all good starts to building a good website.
Build a rigorous screening process
Having shortlisted applicants and reviewed their CVs, the next step is to put them through a rigorous screening process. Who seems to be a good fit for your company?
While the face-to-face interview is a staple of the hiring process and seems straightforward, there are many things to keep in mind. When conducting interviews, ensure that you focus on soft skills as much as technical competence. Factors such as coachability, emotional intelligence, temperament and motivation are all equally important for employee success.
Apart from interviews, it is key to establish other steps in the screening process. Here are some tips:
- Review a candidate’s CV critically. For instance, look out for gaps in employment, and ask your candidate about this. This could be an opportunity to learn more about your candidate’s priorities.
- Check with references. If possible, reference check across different levels. Look for direct reports, peers and managers – each person will give a different view of the candidate’s work ethic and work product.
- Evaluate personal portfolios. Ask candidates for a portfolio of highlights. See whether they are able to articulate their success and how they achieved it with quantifiable information.
Adapted from Entrepreneur
As mentioned previously, candidates are also assessing your company to ensure that they are applying for the right job. Give them the chance to ask you questions. It is crucial to give a realistic picture of the work environment in your company – a mismatch in expectations may cause disappointment for both parties later on. In short, be generous with information and make the hiring process an experience and not just a process.
Leverage on digital trends & social media
According to a survey by MIT and Deloitte, people want to work for digitally enabled organisations. Businesses have to stay ahead of the curve in order to retain employees and attract new hires. Make sure that your career site is mobile-friendly. Many individuals use their smartphone in some way for their job search. Browsing job listings, filling out online job applications, creating resumes or cover letters, people are increasingly using their phones to look for jobs.
You can also use the Internet to do a quick background check. See what comes up about your candidate online and on social media platforms. Things like professional blog posts or online portfolios provide an additional avenue of skills assessment.
Leverage software solutions to keep up with employment regulations
Throughout the hiring process, make sure that you stay in compliance with evolving regulatory requirements. For instance, amendments to the Employment Act in Singapore in 2019 imposed additional requirements on employers, including issuing key employment terms (KETs) and itemised payslips and maintaining detailed employment records. Changes to employment laws in New Zealand made earlier this year also modified the requirements for trial periods in Individual Employment Agreements (IEAs), among other changes.
Want the lowdown on what legislation you have to comply with when hiring employees? Download our free eBook on Employment:
Simplifying the Legal Process
With employment legislation constantly evolving, it can be a challenge to stay up to date. Using online legal software such as Zegal would simplify the process. You will be able to select from a library of legal contracts, policies and forms that cover the different HR processes, generate contracts that are legally compliant and send them to your employees for signing and online storage. Ultimately, this software allows you to:
- Protect your business by laying out clear expectations and legal obligations between employer and employee;
- Speed up your HR processes by gaining access to a host of contracts, policies and forms that you can tailor to your needs;
- Stay up to date with legal changes in the HR field as our employment contracts, policies and forms are reviewed and approved by qualified lawyers; and
- Focus on improving your business. Concentrate on hiring the right employees rather than trying to keep up with legal documents.