The ULTIMATE Small Business Hiring Guide: Everything you need to know about hiring an employee

the ultimate small business hiring guide

Small business hiring is an essential (and often challenging) facet of entrepreneurship. Any business owner who’s made a bad hire (and most of us have) can tell you the pain of realizing your mistake and trying again and again to “fix” the bad hire, before you finally fire them. Not to mention the money and time you’ve spent interviewing, training them, and then fixing their errors! It’s no doubt that bad hires are expensive.

Image via grasshopper.com

So, to save you all that heartache, toil, and money, we’d like to share our 8 step process for hiring with you. You’ll find that this process is a little different from the one most business owners use. You know the one: where they meet someone they like, then they think about a problem in their business and they hire that person they just met to fill that need. That kind of quick pick-up fails just about 100% of the time! Instead we need to be more methodical. Let’s start by defining success!

Step 1: Define the job with a stellar job description

Before you can find the right candidate, you’ll need to know exactly what you’re looking for. This stage is like making your shopping list before going to the grocery store. If you skip it, you are likely to spend your whole grocery budget and come home without any main courses!

When you hire without a job description it makes it much harder to figure out if the candidate is a fit (fit to what?); and the candidate isn’t even sure what job they are taking on. It’s easy enough to recycle an old or existing job description—or to even use one you found on the Internet. But creating even just a one line job description–that really shows what success in the role looks like–will provide the necessary direction and focus for you (as the person doing the hiring) and for the possible job candidates (who need to know what the job entails).

Every job description should answer three main questions:

  • What do you want me to do?
  • Why am I doing this?
  • How do I know I’m doing a good job?

Answering these questions creates a clear path for both you and the candidate to decide if they are right for this role.

Constructing the perfect job description doesn’t have to be difficult. In fact, with this template, you can craft a quality job description in less than two hours. Not so bad, huh?

employee job descriptions
The secret: Be clear. A 3-page-long list of tasks really doesn’t help candidates know what’s important or where to focus. Start with the larger roles, and leave the smaller tasks up to them.

Before you leave this step, don’t forget: the power of a well-defined job description goes beyond the small business hiring stage; it becomes the mission statement for your new employee and guides them to accomplish goals throughout the year.

Step 2: What salary do you need to offer to attract good candidates?

Now that you have a better understanding of what you’re looking for in the perfect new hire, you’ll need to do some research to decide how much you are willing to spend on him or her. You may have a number in mind that you want to pay, and that may be a good place to start, but ultimately you don’t decide what a fair salary is. The market determines the salary that you have to offer in order to attract the talent you need.

[Many small business owners feel that they can’t “afford” experienced candidates and so they “settle” for wooing junior applicants. If this is you, don’t feel so bad. There are benefits to hiring a more “junior” employee. While young applicants may have less experience, they may also bring unique abilities as well as greater drive to learn and improve their skills].

When considering experience and skill set, you don’t want to offer too much, but you also want to pay enough to attract the talent you need—right? There’s a process for that.


This process helps you:

  • Discover an average salary range for the type of role you have
  • Find out what similar types of jobs are paying in your geographical area
  • Tweak your job description so the level of duties fit within the salary range

Perks

Once you’ve identified the appropriate salary range, you’ll need to see how that fits in with your allotted budget. Sometimes, that means you can only offer a salary that falls in the low end of the market average. If that’s the case, we need to think about what we can offer, besides money, to attract the best talent.

That’s when you highlight the other perks you can offer, like:

  • Flexible scheduling
  • Value of work-life balance
  • Great company culture
  • Opportunities for advancement
  • Stock options or bonus scheduling

Regardless of the type of perk you can offer, there is always some sort of benefit to leverage; it isn’t always “about the money”. Small business hiring is all about being agile and offering a unique opportunity that can compensate for a lower salary and smaller benefits package.

Step 3: Begin the search with a compelling job posting

With your job description and your salary range in mind, you can now start writing the job advertisement that will attract your excellent candidates. No, you can’t just post the job description – it looks lazy and isn’t designed to attract the best candidates. If you want great candidates, you need a compelling posting.

A well-written job ad will:

  • Highlight the challenges and opportunities involved in the position. An ad that highlights challenges and opportunities attracts more high achieving candidates who want to work hard and excel. (Does it show how their hard work and smarts will pay off?)
  • Stand out from the others. Job boards have tons of similar job postings. Make yours more interesting. Use a creative job title (but include the traditional one for search purposes). Include some personality. It’s OK if some people are turned off by it, your ideal candidate will be attracted by it. (Does it resonate with the kind of candidates you want?)
  • Have some character. Your company is one of a kind – show folks what they are missing by not being a part of it. (Does it showcase your company culture and voice?)
  • Include the important information. Tell people what they need to know in order to evaluate if this is for them. Talk about travel, odd work hours, or other quirks of the position. Job postings with the company name and a salary range get more applicants, and the applicants are more likely to be qualified – don’t leave those out. (Does your audience know who you are and how much you are willing to compensate for this position?)
  • Entice the appropriate generation of candidates. Don’t forget that you have very different audiences out there. Speak in the language of the audience that’s most likely going to fill this role. (Does it speak to Millennials, Gen Xers, or more experienced candidates?)

When you’ve reviewed and completed your job ad, ask yourself, “Would I want to apply for this job?” or “Who will find this attractive?”

If it doesn’t sound all that appealing to you, it’s likely that others won’t find it exciting, either. Strike a balance: make sure you’ve eliminated overly jargon-y words and get to the point, while still showing off your company’s unique personality.

Here’s a sample job ad we’ve used. Use it for inspiration as you craft your own ad:

LinkedIn also has some great job ad examples that work well.

Remember: you want to attract candidates who will be engaged at work.

Your goal for this step is to envision life before as well as after you hire your new great fit employee. Only after you’ve really articulated what you need and what you can offer the right candidate, will you be ready for the next step.

Step 4: Write your interview guide

Most business owners wing it when it comes to interviewing. When I ask them about it, they’ll tell me how good they are with people, how they have a “gut feel” that never fails them. But then when I ask about their hiring track record, it’s usually a very different story…

If you are going to compare candidates accurately, you need to have a written interview guide. By preparing questions in advance, you insure that you ask all the candidates the same questions, that you cover all the skills and issues that you want to cover, and that you don’t make bogus assumptions about how the candidate will answer (because when you follow the interview guide, you ask the question and let them answer!)

What should you ask?

In the interview, you need to get to know the candidate and assess how they will likely perform in this role in your business. The best way to make this assessment is by reviewing past performance. So I start every interview off by reviewing the candidate’s resume from bottom to top.

For each role I ask the same questions:

  1. What exactly was your role? What did you do?
  2. What obstacles did you overcome? What results did you achieve?
  3. Tell me about your boss? What made him/her a great boss? What would you change about him/her?
  4. Why did you leave?
  5. What was your salary?

By going through every job in this methodical way, I can see the career progression (or lack of progression) that the candidate made. By listening for repeated themes I will discover what they are good about, what they care about, and what kind of supervision they need. I can also track their earnings so I can more accurately assess their salary demands at the end.

The second half of the interview I use behavioral questions. These questions usually start out with “Tell me about a time when…” You want the candidate to respond with an example. By using actual historical examples you find out how a candidate really behaves. Most interviewers use hypothetical examples, like “Suppose we were doing something like X? You could do that, right?” How do you think that candidate is going to answer?

Take your job description and think about what the 10 most important behavioral traits for this role are. Then write (or, borrow, or find) questions that address each of these traits.

Employee Interview Guide

This is a good time to remember that if you’re your own HR department, you need to make sure you know some basic HR guidelines and the mistakes to avoid when hiring (just to ensure you don’t ask any illegal questions that could get you into hot water). I’ve listed a few of them below.

Questions you CANNOT ask job candidates about (aka, it’s going to get you sued)

  • Personal relationships (marital status, children, sexual orientation)
  • Personal debt
  • Race, religion, language
  • Military discharge
  • Drinking/drug habits
  • Age

By writing your interview questions out ahead of time, and sticking to the interview questions, you can avoid accidentally stepping into any of these off limits areas; and you can focus on just listening to the candidate during the interview.

Step 5: Screen the resumes

Now that your job ad has been out for a few days, it’s time to start sorting through the pile of applicants. If you’ve done a good job on the posting you should have 50 – 100 applicants in a few days.

So how do you know when an applicant is really special?

Great applicants are ones that not only meet your skill requirements, but also demonstrate a sincere interest in the role. So first, sort out the ones who didn’t bother to customize a cover letter, and put them aside. Then scan through the cover letters and only look at the resumes of candidates that spark your interest. After you’ve done that, go back and evaluate based on experience.

Strong applicants will showcase a track record of motivation, loyalty, and accomplishments. They have given you specific reasons why they are right for this job. In fact, Business Insider showcased an A+ resume that might serve as a great comparison during your review process.

As you get to the resumes, keep in mind a few red flags that might help you to narrow down the pile more quickly.

Those indicators might appear as:

  • No cover letter (I only look at these candidates if I’m desperate.)
  • A skills-based resume (usually covering up a spotty history, or a change in career)
  • Silly or made up job titles (like “Chief Smiles Officer”)
  • Missing contact information
  • Spelling errors
  • Overly designed resumes (if you can’t read it, toss it.)
  • Gaps in employment
  • Skills that don’t align with those outlined in job ad
  • Extremely long resumes (if they can’t be brief here, they never will be.)

Know your pet peeves and trust your gut when it comes to a good resume vs. a bad resume.

Another way to screen applicants: Google them. That’s right, check out their social media presence and other work on-line. CareerBuilder found that two in five employers are screening applicants through these outlets. If the interviewee is willing to post content for the world to see—it’s free reign for you as an interviewer. If they are making an effort to get their best work found – that’s a good sign.

As you work your way through the applicants, keep these concepts in mind, too.

You won’t always find the perfect match of experience and qualities, but when you’ve narrowed down the applicants to a small pool, it’s time to get a better idea of who to hire via the interview stage of the small business hiring process.

Step 6: Interview your applicants

It’s day one of interviews. You have a list of questions to ask your interviewees and you’re prepared to study body language and other unspoken cues.

I always like to interview with two interviewers – one asking questions, including follow up questions, and keeping the candidate engaged, the other focused on taking notes. This is an important decision – get as many sets of eyes and ears involved in the process as possible.

Take note of your first impression, but don’t let it dominate your thinking. Just sit down and ask the questions on your interview guide. Maybe the interview isn’t going well and you are thinking about cutting it short? Keep going to the end; some candidates take time to warm up. Similarly, if you are wowed at the start, keep going. A good interview is going to uncover both positive and negative things about each candidate. You want to persist until you discover both!

Also note if they committed some of the interview faux pas, like:

  • Having a cellphone buzz or ring during the interview
  • Badmouthing former bosses or co-workers
  • Dressing too casually
  • Not bringing a copy of their resume
  • Not doing their homework about the organization
  • Asking questions about salary, time off, etc. in the first interview

Once the Q&A session is done, consider using some of these supplemental tools that will help you better understand your applicant’s character and hard skills, too.

Writing samples & testing

Some companies have all of their top candidates complete general tests like WonderlicTM to get a basic overview of their competencies.

Personality profiles

Personality profiles include Myers Briggs (MBTI), AVA, and OAD tests. We’ve used all of these before; but we like DISC and PDP profile testing the best. These tests help us get inside the candidate’s head so we can see what drives them, how much energy they have, and how their personality will fit – or not – with the role and within the company culture. For example, if you are hiring a Lead Sales Person, you need someone who is great at taking initiative, very personable, very actionable, etc. DISC and PDP (among the others) will tell you if that person has those qualities or not.

When you review your findings, it will be easy to narrow the search down to one or two of the best possible candidates from the first round of interviews. On the second interview, have the interviewee speak with other employees and get outside feedback on their perception of the candidate.

Step 7: Make an offer 

You’ve talked with your team and thought long and hard about which candidate to hire. You’ve weighed how different candidates fit within your office culture, their different experience levels and skills, and their communication styles.

Once you’ve identified the best possible candidate, it’s time to make an offer and get that person on your team.

During this stage of the process, you’ll be negotiating several important facets of the new person’s role:

  • Salary (How much will they make?)
  • Vacation time (How many days can they take off during the year?)
  • Benefits (What perks–like healthcare and retirement–do you offer?)
  • Flexibility (Do you allow work from home days or flexible scheduling?)
  • Timeline (When will the person start?)

There may be some back and forth between you and your potential new hire, so be prepared to answer questions and consider proposals.

One of the most pivotal points during this stage is likely the salary negotiation. A few tips for negotiating as the employer:

  1. Know your budget. Have a concrete salary range in mind and stick to it.
  2. Show the numbers. Be prepared to explain your first offer with salary comparisons from similar roles you’ve found in your area.
  3. Let the potential employee explain why they feel they deserve a certain salary.
  4. Make realistic promises. If the negotiation includes a future pay raise or promotion, follow through on that promise and stay true to your word.

When you’ve settled the details of the offer, the candidate might need some time to weigh the offer and talk it over with his or her family. However, be sure not to allow too much time in between—that’s one of the easiest ways to get your offer turned down.

If you can both come to an agreement—guess what? You just filled the position!

You may think your small business hiring process is complete, but actually, you’ve just reached the training and onboarding stage.

Step 8: Post-Hiring: Training & Onboarding

Hiring is only the first part of your employee’s journey. During the training stage, you’ll be onboarding your new team member and getting them comfortable, informed, and eventually engaged at work.

Consider an onboarding process that includes:

  • Calling the employee the night before his/her first day to reinforce excitement
  • Connecting with your new hire’s support system (family, significant other, spouse)
  • Having an office or work space prepared
  • Making the training materials available or getting training scheduled
  • Encouraging and providing opportunities for the employee to participate
  • Assigning a mentor
  • Celebrating the first day as a team
  • Visiting with them throughout their transition period

Why is onboarding important?

In order to be successful, your new employee needs to be equipped with the right tools, training, and historical information to really understand their role within the business. In fact, one study found that 75% of employees felt that thorough new-hire orientations were important and worthwhile.

Yes, training takes precious time. But think about it: If your new hire isn’t properly trained, you might spend even more time going back and fixing their mistakes. Or worse—they might sit at their desk unsure of what to do for the few first months. Bottom line: Training is essential and will save you money in the long run. Develop a training and onboarding program so they can hit the ground running.

Thought you were finished at this last step? Not quite.

Not only do you need to train—you also need to retain. Developing your new employee is an on-going process. But as a small business owner, you probably already know nothing is as easy as it seems.

Small Business Hiring: In Conclusion

Use these steps as your road map while you move through the small business hiring process and you’ll be prepared for each and every phase. By having a solid pool of candidates; by screening and interviewing carefully; and by finishing through to training and onboarding, you will have a team of rock stars in no time!

Yes, it’s an involved process with many different steps and stages. But hiring for your small business will not only equip you to make better hiring decisions–it will ultimately help you better understand your business.

Your turn: What would you add to this small business hiring process? Are there other tools that help make your small business hiring process run smoothly and effectively?

EnMast small business owner community

Devan Perine

Devan Perine works with small business owners on their marketing and multimedia efforts. She's passionate about helping businesses build their presence online, and giving Gen Y a voice in the workplace. When she's not working, she loves to make a mess in the kitchen, and play with her band around Chicago. She loves to chat! Give her a shout on Google+, Twitter or LinkedIn.

Speak Your Mind

*