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The Recruitment Quandary for Small Business: To Outsource or Hire In-House?

Recruiting for the first time is a significant task for a small business and it can be scary. If you get the right people in your team they will make a massive and positive difference to your business. Great people take a while to find so it’s worth putting some effort into sourcing them and into the selection process itself.

The first question to ask is whether a permanent employee is necessary or whether you can use staff on a self-employed basis. Hiring on an outsourced or self-employed basis may be ideal if you have a requirement for occasional work that is beyond scope of your existing resources. For example, you may use an external consultant to present, teach or implement new business ideas or procedures. This may work well in terms of managing budget requirements, since you pay only when assistance is required.

Alternatively you may prefer to recruit an employed worker. This means he or she will have an employment contract with you and you will both have to fulfil a range of obligations. Employees could prove suitable if you need more control over your resources on a regular basis. They can ‘slot in’ and provide your business with a degree of predictability. They are present during business hours, increasing efficiency and freeing up your time. While expensive, employees have the following advantages over outsourced workers.

  • They have to turn up and work for you.
  • Employees tend to have greater buy-in to your business.
  • The knowledge and skills developed by working on your projects remains in the business and is available for later use
  • An employee develops greater familiarity with your company and this can be helpful when you need to tackle a piece of work quickly.

Once the decision is made whether to employ or outsource, the next challenge is to find the talent. Unlike bigger organisations, who may have the advantage of brand recognition, a recruitment department and greater benefit packages, recruiting for a small organisation may not be an easy task. Research shows that many workers have a preference for working in large organisations. However, small businesses have a number of advantages (variety, flexibility, opportunity to work with senior managers, career growth, closer and more effective team structures) and you can promote these in your recruitment process.

Before you go out to market decide very clearly what the right skill sets are. You should be able to distil these from the job description. Decide how you will capture the data that will tell you whether this person can do the job. Arrange for candidates to carry out a range of tests to determine skills and knowledge. Ask relevant competency based questions. An example would be “Tell me about a time when you had to resolve a problem with a customer”. The better the factual information gathered the more accurately you’ll be able to make a decision.

The cost of recruitment can be very high, but there are plenty of free or very cost-effective options. Social media such as Facebook, Twitter are free as is LinkedIn (there’s also a paid for option there). Consider using ex-offenders and ex-service personnel. There are agencies which support both categories in the getting of jobs once they’re back in circulation. If you belong to any industry based networking groups you may find that you may get some leads that way.

Last but not least give some thought to apprentices. We have been developing our own team internally for the last two years and the results have been excellent. We are now working closely with the business studies departments in a number of local universities.

If you need help getting HR problems resolved in your business, get in touch.

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