10 Steps to Hire the Right Employees for Your Small Business

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Reviewed by Matt Pelkey
• 9 minute read
Small business owner interviewing candidate

Hiring an employee is exciting — but finding a great employee can be one of the most challenging and important things a small business can do. You want to find a candidate who can do the job but will also contribute to the growth and culture of the company.

Finding an employee can take time and money (the average cost to recruit a new employee is about $4,700). You most likely don’t want to waste the resources to hire someone who isn’t a good fit.

Let’s explore a few steps you can take to prepare your small business to make a great new hire.

10 Steps to Hire the Right Employees

1. Consider why you need an employee… and if you can afford to hire one.

Before you post a job listing, take a moment to consider the need for this role. Does your business need a full-time employee or just an extra set of hands for the busy season? You should also consider whether you want to work with an independent contractor or hire someone directly. Each of these options comes with different rules, tax implications and costs. You should also think about the financial impact of hiring someone. Beyond paying a salary, you may need to provide benefits, equipment and training.

2. Define the role and expectations for this position.

Clearly defining a new role and its responsibilities and expectations can help you attract and retain quality candidates. It will also help job seekers understand the skills they’ll need to do the job well and how their work will contribute to your company’s goals. This clarity can help attract the right talent and ensure their success within your business.

3. Study up on the legal and tax requirements.

Before taking on a new employee you should be sure to understand the necessary employment laws, tax obligations and insurance needs. Depending on the type of employee you hire, these can look very different. Having a thorough understanding of these things is important for compliance and protecting your business. Small business owners should invest time into learning these requirements. It may be beneficial to seek professional advice.

4. Craft a great job listing.

A job listing is your first interaction with potential candidates. You should choose the right job title and give a thorough job description so the candidates know what the job entails and what kind of work they will be doing. You should also include information about the perks and benefits that come with the role. Be sure to highlight your company culture and your values — tell them why it’s a great place to work.

5. Decide where to post your job listings.

Choosing the right platforms for your job posting can help you find the most qualified candidates. Large job boards, like Indeed, can attract a wide audience but niche job sites and industry-specific forums can help you find job candidates with specific skills. You can also leverage your professional network,employee referrals and social media platforms like LinkedIn to fill open positions.

6. Screen Your Candidates

You don’t need to interview every person who applies. Be sure to review resumes and cover letters for relevant skills and experience. You can also set up a quick phone call or set a small task or test to complete to get a better understanding of their skill level. This can help you pick the right candidates.

7. Conduct Interviews

The interview process lets you dive deeper into a candidate’s qualifications and experience. They also allow you to get a feel for how they will fit in with your company. You should prepare a list of questions that will help you assess their technical abilities, soft skills and values. Keep in mind that an interview is a two-way street. You should be ready to answer questions about the role and why the candidate would want to work for you.

8. Create Your Short List

After conducting the interviews, you can narrow down the list to the best candidates. Assess each potential employee’s skills and culture fit. At this point you may also want to do a quick background check or check out their references. If you have other team members, it may be beneficial to get their input as well.

9. Make an Offer

Once you’ve decided on the right person, you can make a job offer. Remember when you hire employees it’s often about more than just agreeing on pay. Be sure to consider information about the entire compensation package — health insurance, paid time off, retirement plans, bonuses and other benefits.

10. Onboard Your New Employee

The hiring process doesn’t stop on your new employee’s first day. A well-structured onboarding process helps new hires adjust to their role and integrate into the company culture. A positive onboarding experience can significantly impact an employee’s effectiveness and long-term relationship with the company. For many companies, this process can take a few months. It could also serve as a probation period for the company and the new employee.

What Are Some Common Mistakes Small Businesses Owners Make While Hiring?

There are several mistakes small business owners can make during the recruitment process. If you want to hire the best employees, be sure to avoid these traps.

Rushing the hiring process. Companies often want to fill roles quickly to keep business running smoothly. This can lead to a superficial assessment of candidates, where hiring decisions are based more on gut feeling than on a thorough evaluation of the new talent. This can lead to a mismatch between the employee’s skill set and the job’s demands. This can be frustrating for both sides and can contribute to a higher turnover rate.

Not accounting for unconscious bias. Unconscious bias can skew decision making in subtle ways. It can influence the assessment of candidates based on factors unrelated to job performance such as age, gender, ethnicity or even personality traits. This limits the diversity within the team, which stifles innovation and problem solving. It can also lead you to overlook the best candidates. To avoid this and follow the best hiring practices, you should consider a structured interview process and get input from a diverse selection of team members and hiring managers to ensure a fair and inclusive selection process.

Not having a recruitment strategy. It can be difficult to attract the top candidates without a solid recruitment strategy. A well-thought-out recruitment strategy should include everything from employer branding and targeted outreach to a simple application process. This can help ensure that you get the top candidates.

What Are Some Good Interview Questions?

Good interview questions can help you gain insight into a candidate’s experience, skills and personality. It offers them an opportunity to highlight their problem-solving skills, adaptability, teamwork, motivation and compatibility with your organization’s ethos. Here are some good questions to consider.

  1. Can you share an instance where you had to overcome a challenge in your previous role? What steps did you take and what was the outcome?
  2. How do you handle your workload when faced with tight deadlines and multiple projects? How comfortable are you reaching out for help?
  3. Have you ever had to work closely with someone whose personality was very different from yours? How did you manage that relationship and ensure effective collaboration?
  4. What keeps you motivated in your work?
  5. Give an example of a goal you didn’t meet and how you handled the situation.
  6. Do you stay up to date with the latest trends in our industry? How?
  7. Describe a project or idea that was implemented because of your efforts. What was role and what impact did it have?
  8. When making a decision at work, what are the key factors you consider and can you provide an example?
  9. How do you approach giving, receiving and implementing feedback?
  10. What are you looking for in your next role and how does that align with our company’s mission and values?

How Do I Make Sure the Good Employees Stick Around?

Employee retention is important. Hiring new talent is expensive and time consuming. Plus, finding the right people can be hard. Here are a few ways you can help ensure your best employees stick around.

Offer competitive compensation and benefits. Keep your compensation package aligned with industry standards. Include health insurance, retirement plans and flexible schedules.

Create a great company culture. Promote inclusivity, diversity and open communication to make employees feel valued and a part of the team.

Invest in employee development. Provide employees with opportunities for professional growth through training, workshops and clear career paths.

Recognize and reward contributions. Be sure to acknowledge your employee’s hard work and achievements.

Encourage work-life balance. Support flexible working hours and remote work when it’s an option.

Give feedback. Conduct performance reviews and offer guidance to help employees reach their goals.

Foster open communication. Create a culture of transparency and encourage employees to give you feedback as well.

Expert Recommendations: What Can You Do During the Hiring Process to Mitigate the Risk Involved With Bringing on a New Employee?

“Other than checking the references, which I always forget to do, the best way is to ask the right questions in the interview. I like to ask questions about their mother, father, friends, interests, or anything that has nothing to do with work. These are things that applicants don’t practice whereas the usual interview questions people can get pretty good at and can use their answers to create a more favorable and less truthful impression. In short, when you talk shop, people’s guards are up, but when you talk family, you’ll usually see the real person.”

Barbara Corcoran

Barbara Corcoran’s Business Unusual podcast offers real-world advice to anyone running their own business. She’s been there, done that and more. This wildly successful, insightful and entertaining podcast will inspire you to take on your next business opportunity or manage through everyday challenges.

Create a consistent hiring plan. Creating a consisting plan will take a little bit of time, but this will ensure candidates have the same interview experience across the board, which will help you compare and assess candidates fairly.

Pay attention to nonverbal cues. Look for indications of positive body language: Sitting up straight, smiling, eye contact, upbeat attitude. Most candidates put their best foot forward during an interview, so if they’re not excited about the job during the interview, you can be sure they won’t be excited once they’re hired.

Sincerity. Find out if they are truly passionate about your mission, the role, and the impact they can have at your company. As a small business, every employee counts and you need to make sure that they want to be at your company doing that job.

Prioritize intelligence over experience. There are some technical positions that will absolutely require the experience necessary to be successful, but if a candidate has most of the critical skills you are seeking and displays enthusiasm with the potential to learn the nice-to-have skills. This is someone you should hire!

Always be recruiting. As a business owner, you should never take your recruiting hat off. The better your employees, the stronger your company will be. This includes networking events, conferences, social media, etc. The people you connect with could be your next hire and/or introduce you to someone in their network that would be a great fit.

Interviews are a two-way street. Be mindful of how you represent yourself and your company as the employer of choice. You want everyone to have a great experience and sing your praises to their friends and family. Remember the 3 P’s to keep in mind: Be Polite, Professional, and Punctual.

This is fun! You are growing your team and there are endless possibilities for how this new hire will add value and impact to your organization. Get excited!”

Lauren Barnes

Lauren Barnes served as talent acquisition specialist at OnDeck.

DISCLAIMER: This content is for informational purposes only. OnDeck and its affiliates do not provide financial, legal, tax or accounting advice.