Small Business Hiring Guide

As a small business owner, hiring the right people at the right time will have a huge impact on the long-term growth and success of your business. This guide is designed to walk you through the hiring process and help you find employees who will make your business thrive.

Plan to Staff Your Business

Once you’ve determined that hiring employees is essential to the growth of your company, it’s time to sit down and make a plan. This plan should primarily address three major questions:

  • What does my business need?
  • Who can fill these needs?
  • What is my budget?

The answers to these questions should guide your hiring process from beginning to end.

Identify Your Business' Needs

The most important thing to consider when hiring employees is what your business needs. If you haven’t already, think about what you most want to accomplish with your business.

  • What are your short-term and long-term goals?
  • Where do you want your business to be this time next year, in two years, in five or ten years?
  • What are the biggest obstacles preventing you from being there right now?
  • How will bringing new people onto your team help you accomplish these goals.

With these things in mind, begin your search by focusing on two main questions:

  • What positions need to be filled first? This will vary a great deal for each business depending on your industry and what skills you and your current team bring to the table. However, no matter what type of business you run, your first priority should be getting your product or service to market. Look for gaps in productivity or talent where new hires can make the biggest impact.
  • Who you want to fill these roles? This is the time for some introspection. If you haven’t already, take some time to consider the company culture you’re cultivating and what types of people thrive in that environment. Company culture can touch on a lot of things, from the pace of your work day or your office floor plan to your business’s core values and mission statement.

To successfully hire you’ll need to know not just what you do as a business, but who you are. What makes your business unique? What essential qualities are you looking for in new team members? Keeping this vision for your business culture at the forefront of your mind while entering the hiring process will help you develop a team that works well together and is excited about your business goals.

Know Your Budget

Now that you have a good idea of what you’re looking for in an employee, it’s time to consider who you can afford to hire. While a tight budget can remove some options from the table, setting realistic financial parameters early on will save you time and money throughout the hiring process. Strong financial planning is a key component to long-term success. Trying to grow too quickly can ruin a business. The first thing to determine is the true cost of each employee. This will include more than just a salary. At a minimum, additional costs will include:

  • Payroll taxes
  • Unemployment insurance
  • Workers compensation
  • Additional benefits you plan to offer your employees

A good rule of thumb is to budget 120% of a new hire’s salary. Be sure you have a steady cash flow to keep up with the costs of new employees, or at least enough funds saved up to cover these costs for one year.

Develop a Recruitment Strategy

When you’ve worked your way through the planning stages and have a good idea of what positions you’d like to fill and how you’d like to fill them, it’s time to begin developing a recruitment strategy. While there are a great number of resources available to business owners today, the best method for you will depend largely on your particular business and the type of candidates you’re looking to recruit. Regardless, you’ll need to determine where to find the best candidates and how to write effective job posts to attract the more qualified applicants.

Finding New Talent

Word-of-Mouth Recruiting

No matter what type of business you own, word-of-mouth recruiting is a tried and true method of finding quality employees. In fact, the vast majority of positions are filled through word-of-mouth referrals. For this reason, your first step when looking for talent should always be to tap into your social and professional networks.

For your first few hires, you can find high-quality, prescreened candidates through friends, industry colleagues, and other associates like your attorney, accountant, or members of any professional organization.

After your first round of hiring, employee referrals will become an invaluable resource, providing several advantages:

  • Current employees know your business’ culture and may already know someone who would be a good fit for the role.
  • Your team members are invested in your business’ success, so they are likely to bring in quality recruits.
  • Recruits referred by your current team members’ are more likely to stick with the job.
  • A simple incentive program for referring a qualified candidate is often cheaper than the costs of hiring a recruiting agency.

Recruiting via Online Job Boards

Nearly four out of five Americans use online job postings as their primary resource when seeking employment, so this is absolutely a resource you should not ignore.

Here are some of the best websites for finding new recruits:

  • Indeed— One of the most popular job sites out there, Indeed.com brings listings from multiple other job boards together on one platform. It attracts around 200 million unique visitors per month. You can post your job listing here for free, or pay extra to have it advertised on the site.
  • Glassdoor— A job board website known for its company reviews and highly informative user-interface, including useful information such as an estimate of the salary range you should expect for any position.
  • Workable— One of the newer but more innovative online recruiting options, Workable.com is a paid service that lets you simultaneously post your job listing on all of the top job boards. Their platform also lets you create an attractive profile page for your business, schedule interviews, and evaluate candidates.
  • LinkedIn— A social networking site for working professionals. Employers can send out a referral request to their professional network, search through profiles to compile a list of ideal candidates, and, for an additional fee, post job openings to LinkedIn’s job board.

While all of these sites can be excellent places to advertise your job openings, for very small businesses it may be difficult to manage the number of resumes you receive. If that becomes the case, consider finding more niche online job boards that cater specifically to your industry. This can save you a great deal of time and resources.

Recruiting Agencies

Most recruiting agencies specialize in a specific industry and are most helpful when looking for highly specialized talent.

The upside of recruiting agencies is that they only get paid when they successfully match a candidate with your business. This allows you to budget a certain amount for the roles you need and let the agency take care of the grunt work.

While recruiting agencies can be effective ways of bringing great talent into your organization, their fees can be steep. Some charge up to 35% of a new hire’s first year wages, but different agencies have different billing models.

For most, this tool will not be necessary and is not advised in the early stages of the hiring process. However, for some fast-growing companies, bring on an agency to fill high-level positions can be beneficial.

Recruiting Within Your Own Company

Finally, do not overlook the talent you have cultivated within your business when looking to fill positions. Once you complete your first round of hiring, your current team members can be great candidates for promotion into positions of increased responsibility. When chosen wisely, internal hires can save you a great deal of time and resources in hiring, onboarding, and training.

Writing a Standout Job Listing

A well-designed job listing is a great opportunity to advertise your company. All the work you’ve put in to this point will be for nothing if you can’t attract the candidates you want. Below are some key things to consider when putting together a successful job listing.

  1. Choose a job title people want. When looking for jobs, the first thing that jumps out to candidates is the position title. This is the job title they will add to their resume if they’re hired by your company. You can get an edge on your competitors by using the most current and popular language when referring to the role you want to fill.
  2. Sell your company. The best recruits are those who are excited about being a part of your team. Use the introduction to your job listing to share what you think sets your business apart from others in your industry. This section should not only make clear what your company does, but what it’s like to work there. Share your story and what your business cares about most.
  3. Ask for what you want. Take a few sentences in your introductory paragraph to describe the type of person you’re hoping to recruit. This should include both skill set and personality. Do your employees have to work closely as a team or spend a great deal of time doing independent research? Should a new hire be willing to work long hour, travel, or participate in company-wide activities? This will help weed out job seekers who know right off the bat that they’d be a bad fit.
  4. Be specific about the role and its requirements. A great job listing gives a vivid picture of the role and what it looks like on a day-to-day basis. The job requirements and qualifications sections should be as clear and specific as possible. This helps encourage qualified candidates to apply and dissuade unqualified candidates, thus saving you valuable time.
  5. Be clear about what you want from applicants. Do you want to see a resume? A cover letter? A headshot? All three? Be clear about what you need from applicants. This saves your time and theirs.
  6. Get a second opinion before sending it out. Every great writer needs a great editor. It’s always worth it to have a business partner or friend take a look at your job listing to make sure everything came out how you wanted it to sound.

Browse our 500+ sample job descriptions.

See All

Still need to set up payroll for your new employees? Read our Gusto review to learn about our recommended payroll provider.

Read Our Gusto Review

Featured Articles

Once you’ve posted your job listing and begun receiving applications and resumes, you’ll need to spend some time sorting through to select the best candidates for interviews. The interview process can take up a great deal of time, so taking steps to understand who to invite, what questions to ask, and what to keep in mind when making a final decision will help guide you through the process more efficiently.

Who To Invite For An Interview?

No matter how well you execute the planning and recruiting phases of the process, the success of your hiring attempts comes down to you. Faced with a pile of applications, you’ll need to be thoughtful and methodical when it comes to who makes the first and final cuts. When selecting applicants for interviews, keep the following in mind.

  • Does their resume match the role? When looking at a person’s resume, it should make sense why they are applying for this job. Their education, previous work experience, or extracurricular interests should indicate that they are a good fit. While the perfect resume isn’t a guarantee of success, you should be able to eliminate a good selection of candidates who are obviously not qualified based on resume alone.
  • Does their cover letter match the role? The cover letter is a great metric for identifying serious applicants. Many applicants will either send a form letter or skip the cover letter all together. The best candidates are those who are interested enough to learn about your business and explain what they will bring to the table. This can also be a good glimpse into personality and communication style.
  • Are they attentive to detail? Resumes or cover letters that are poorly organized or filled with typos can be a red flag. While the odd typo may not be a deal breaker in your industry, carelessness in the application process can be a strong disqualifying factor.

What To Ask During An Interview?

Job interviews can be stressful for everyone involved. The applicant is anxious to put their best foot forward and say what they think you want to hear, and you are worried about finding the best fit for your business. The best way to take the edge off is to be prepared. Going into each interview with a clear idea of what you want to learn will help you make the most of this face to face time with your applicants.

Below are some things to keep in mind when beginning the interview process.

  • Prepare. Take enough time beforehand to read over the candidate’s resume, cover letter, and anything else that is part of their application. You may be seeing several people each day, so it will help to refresh your memory before each interview.
  • Get to know the candidate’s character. As helpful as it is to become familiar with the applicant’s general background and professional skills, the quality of their character is extremely important. This will determine how well they can work with you and the rest of your team. Prepare questions that highlight the qualities most important to you and your business.
  • Determine their enthusiasm for the role. Finding an enthusiastic candidate who is likely to stick around for a year or more is extremely valuable. It’s important to learn not only whether someone is capable of doing the job, but why they want to work for you. Asking an applicant why they applied to your company specifically can help you locate the most enthusiastic candidates.
  • Give them an opportunity to ask questions, too. This can be one of the most useful portions of an interview. The type of questions people ask says a lot about how they think, their level of interest in your business, and their motive for being there in the first place.
  • Have multiple team members meet the candidate. You’re not the only one who will be working with the new hire, so get an opinion from others on your team. Not only will your teammates bring additional insight into the candidate, this will also give you the opportunity to see how each candidate interacts with different people and personalities.
  • Remember: they are evaluating you, too. An interview is not a one-way interaction. Quality candidates often have several job opportunities in the works. They will go for whichever one offers the best all around experience. Spend a portion of the interview sharing highlights of your company and your culture.

What to Keep in Mind When Making a Final Decision

When sitting down to make your final hiring decision, you should keep two things in mind.

  • Can the candidate do the job?
  • Are they a good fit for your business?

If you are able to confidently answer both of those questions by the end of this process, you are in a good position to select your new employee(s).

Before making an offer be sure you have everything in place to make their onboarding as smooth as possible. You should be prepared to add them to your payroll, set up any benefits you’ve offered, and integrate them into the fold. This means ensuring there is physical space for them to work and someone available to train them if necessary. No matter what type of business you run, new employees should feel welcomed from day one.

Hiring the best employees for your business will have a long-term ripple effect on your company’s productivity, culture, and morale. This, in turn, will determine the types of candidates you attract in the future. For this reason, the hiring process is one of the most critical aspects of growing a business. Being prepared with the knowledge and tools necessary to make the best hiring decisions will set you on the path to success.