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Sales Wolf Blog

Top 5 Challenges of Hiring Employees in a Small Business

Posted by Chris Young

Jan 18, 2013 9:00:00 AM

challanges of hiring in a small businesFor over 15 years I have advised small businesses and startups.  One of the greatest challenges small businesses have – especially in their early stages – is hiring top talent to propel the business forward.

Nothing is as important for shaping the future of a small business than who is hired – especially in management and sales. 

I know from direct experience.

In 1999, I became the VP of Sales for a small online training company.  I was charged with building the sales team and its' systems from scratch.  I had no experience, no budget (other than their starting salary) and no clue how to complete these tasks.  I did what everyone who is in the same position does – I researched and winged it.  I made some pretty significant mistakes, but I learned from them.

If I had a time machine, here is what I would have done: 

  • Hired a sales recruiter, which would have saved me valuable time. 
  • Have a sales systems consultant help me build sales systems overnight. 
  • Got a talent management consultant that could help me identify top sales talent.

Due to my limited resources and lack of experience -  I winged it.  I thought I was a team player by figuring it out as I went along.  Winging it cost us valuable time and lost opportunity.  We would have been better served hiring fewer sales people and allocating those dollars to outside recruitment and consultants.

Knowing what I know now…  We would have grown the business model much, much faster if we had the right people selling with the right sales processes immediately.  We thought we were growing as fast as we could but the harsh reality is we were not.

Following are common challenges of hiring employees in a small business:

Limited resources.  For small businesses – early in the business model – resources are tight.  Obviously every dollar invested must yield the best possible return-on-investment.  I recommend investing more resources into hiring and developing talent.  The best strategy is to hire the very best you can afford – even if it means reducing headcount expectations. 

Sacrificing quality for quantity.  Business plans often call for a projected headcount.  Quality is implied yet I see few small businesses make wise hiring decisions because they are focused on the quantity of talent.  In an SHRM article, Ken Abosch of Aon Hewitstated states, " . . . above-average performers contribute almost twice the value of average performers to an organization."  If the high performer contributes double than the average performer, you are actually getting more bang for your buck by sacrificing quantity for quality.  Get things done in your business with the right people not with more of the wrong people.

Budgets based on price not value.  Small businesses live and die by cash flow.  In the online training startup, I had to answer to an accountant shareholder who almost always said, “No.”  Every expenditure was based upon spending the least amount of resources and that can often lead to very poor outcomes.    Our due diligence was more focused on beating someone down on price than getting the best service value.  Price is what you pay – value is what you get.   Expenditures need to be looked at in terms of ROI – return on investment. 

Having little expertise in talent management.  Most small business managers develop their own employee selection process and have no clue how to do so effectively.  They hire based on "gut-feel" and the typical process.  While this may seem like a valid approach to hiring at first, most managers find out later on that it consumes time and almost consistently acquires talent that is below average.

It is okay to hire externally for some things in business instead of heading it yourself, especially something as important as the employee selection process.  For example, we recently had some issues with our internet and phone systems.  We attempted multiple times to fix the issue internally, but we inevitably failed.  We finally called someone in to do the work who was able to fix the issue in just a few hours due to his expertise.  I only wish we would have called in "the wolf" of IT when the problem arose initially because it would have saved us a lot of valuable time.  

Elicit the experience of an expert talent management consultant at the onset of hiring, and you will not regret it.

Small businesses lack the "vavoom" to attract great talent.  At times, small businesses do not have the reputation to attract higher-level talent.  The result is a small businesses struggle to find candidates that have potential to be high-performers.  A small business has to be willing to pay competitively to attract higher-level talent.  Offering competitve pay may be spendy, but the ROI is worth it.  

From experience, I can tell you that investing the extra time and dollars into talent management is well worth it.  The Rainmaker Group would not be as successful as it is today, if I neglected to invest in talent management.  The team members at the Rainmaker Group are brilliant, they fit with the culture, and they take ownership in everything they do. I was able to see the characterists and attributes of these individuals with the use of pre-employment assessments, and the ROI has been well worth it.

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