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In the face of competition from larger rivals, small firms may often struggle to hire the people they need. But there are several reasons that potential staff might actually find smaller employers more appealing, writes Jo Faragher
After the dark days of the economic downturn, many small businesses are now back in expansion mode. The problem is, so
are many others, including larger rivals which are capable of providing bigger salaries and better packages, meaning small firms can find themselves at an immediate disadvantage in the battle for talent.
So as a small business owner, once you’ve drummed up the budget and decided the time is right to grow your workforce, the challenge is how to position yourself to attract the people to help take your business to the next level.
Fortunately, there are several reasons why working for a smaller organisation may appeal, at least to a significant segment of employees. “The advantages of working for a small company are often the disadvantages of working for a big corporate,” says Emma Williams, Managing Director of HR Initiatives, a consultancy that works with several small enterprises. It’s important to sell to candidates the breadth of experience they’ll get – experience that they’ll be able to use when going for future roles or as basis for promotion, she argues. “With a small company, you’re visible and everything you do is more recognisable. You can acquire a lot of skills because you may be doing multiple roles.”
Because there’s often a nervousness around hiring when you’re a small business, it’s tempting to go to a recruitment agency, but this could mean paying commission fees of anything up to 25 per cent of a new employee’s salary, warns Ms Williams. If attracting suitable candidates is the challenge, it could be worth broadening your talent pool or being more flexible about the structure of the role – offering part-time hours or the chance to work from home, or supporting someone to learn while they earn.
Jo Tomlinson, Managing Director of Yorkshire-based accountancy firm Business Works, found this flexible approach worked for her. “When it was just me, I did everything,” she says. “But then someone I used to work with told me she was looking for a better work-life balance, so I took her on to do as many hours as I needed, working remotely. Meanwhile, I could spend time building up my network and attracting new clients.”
The company now employs seven people, and only two work full-time. “As long as the resource is there, and the work is done, it doesn’t matter how,” says Ms Tomlinson. An extra perk is that Business Works saves money because it pays less National Insurance on earnings overall – there may be more administration, but there are considerable savings for the business.
Nadia Biles Davies, managing partner at Rayden Solicitors in St. Albans, says that the more flexible opportunities available from this small family law firm have helped to attract high-quality legal talent from the City, looking for a different pace of life. “Lots of large law firms pay lip service to flexible working, but there’s still a perception that this will limit your career progression,” she says.
“We offer a high level of family law work, similar to what someone would get in the City, but we offer a much better employment package in terms of work-life balance.”
Rayden’s attitude to work-life balance appeals not just to women looking to move away from better-known legal employers where they have not been offered the flexibility that they need or want for their family. The firm also employs a triathlete who has qualified for the world championships, and a partner who has made Team GB in jujitsu – both require a less rigid working schedule so they can compete and train.
While Rayden may not offer candidates the same as London law firms in terms of salary, this is a “more rounded package, a lifestyle choice” – a selling point when looking for staff, says Ms Biles Davies.
For businesses looking to develop their own skills as opposed to bringing in already qualified staff, it can pay off to build relationships with local schools and colleges, or to look into Government-sponsored schemes such as apprenticeships. A recent survey by the CIPD found that around one-third of employers are looking to take on apprentices to help them overcome their recruitment challenges.
Furthermore, firms with fewer than 50 staff qualify for a £1,500 apprenticeship grant to help cover the cost of recruitment. So most training costs will be covered while apprenticeship wages are also lower, which can mean long-term savings for your business.
That said, some companies are reticent to take on candidates straight from school because of their lack of experience in the workplace. Nearly two in three small business leaders in a recent FSB survey said that youngsters had a poor attitude to work, and almost half said they had concerns over school leavers’ self-management skills.
Organisations such as Hastings Furniture Service, a social enterprise and registered charity, help young people build those skills to make them more ‘work-ready’. “We treat them as adults, and give them a grounding in the basic skills they need at work,” says Naomi Ridley, the charity’s Chief Executive. “These young people may have had an unstable home life or not had great results at school, but want to get their foot on the career ladder.”
The pre-apprenticeship scheme takes young people on for six months, in which they learn to deal with customers, work as a team and solve problems. “There are schemes like ours all over the country, so I’d encourage small businesses to take someone on – in return, they’ll be loyal and work hard,” says Ms Ridley.
Another overlooked source of skills is disabled people. Research by the charity Scope found that 74 per cent of disabled adults feel they have lost out on a job opportunity because of their impairment, and the government has committed to supporting a million more disabled people into jobs. Registering for schemes such as Remploy or Work Choice could open your business up to enthusiastic candidates who might otherwise not find a role elsewhere. Older workers, too, are often more suited to small businesses because they will have had a broader range of experiences.
Keith Turner, Managing Director of health and safety consultancy TAWSA, took on Chris, who has a mild disability, full-time recently after a short trial in which he worked three days a week. He met Chris through a contact at a networking event, and he has already “become a real asset to the company”. Mr Turner, who also employs a single mother, says being more open-minded about recruitment has led to better retention. “If you take someone on who is looking for something that’s not the mainstream eight-to-five, you get so much commitment in return,” he says.
Wherever you source candidates, what is paramount is emphasising the greater control they will have over their career in a small business. “One thing to highlight is that you can offer a more bespoke training framework and more control over how candidates develop their career,” says Ms Williams. “This could involve putting someone through a professional qualification or allowing a day out to study, and there’s a long-term pay-off in loyalty and commitment because you have helped that person shape their role.”
There will always be hurdles when recruiting as a small business – jobseekers may perceive that bigger companies offer better training, higher salaries or greater security – but the challenge is to turn those perceptions around. Decisions get made quicker, management will be right by your side, and the work will be more varied and challenging. What’s not to like?
For most small businesses, day-to-day operations often take precedence over long-term strategy development, particularly when it comes to training and recruitment.
But as the economy continues to improve, growing companies should look towards building and bringing in skills that will create sustainable growth, says David Pollard, Education, Skills and Business Support Policy Chairman at the FSB.
“Management requirements and skills will inevitably need to change as a company grows, so owners need to recognise when and what training is needed to boost leadership and management skills, for both themselves and their employees,” he says.
The FSB believes that the education system offers opportunities to include management skills, and that support could be strengthened for entrepreneurs looking to start and grow their businesses. After all, ineffective management could be costing the UK more than £19 billion per year in lost working hours, the Chartered Institute of Management estimates.
Businesses should focus, then, on identifying the skills they need, says Mr Pollard, and invest in developing the workforce to improve both productivity and long-term performance.
Jo Faragher is a freelance business journalist
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