If you are struggling to recruit and keep good staff and freelancers, it might be time to take a look at the whole picture of how you Recruit, Induct, Employ and manage staff to see if there are any improvements you could make.
A 2014 Study found that the average cost of replacing a member of staff when they leave is more than £30,000.
The survey found that two main factors make up this cost:
- the cost of lost output while the replacement employee becomes productive (on average it takes 12-24 weeks in smaller companies to reach optimum productivity) and
- the cost of physically recruiting and absorbing a new worker (which includes advertising costs and agency fees; time to do interviews and admin; hiring temporary replacements).
As a small business owner you do have control of EVERY part of how your business operates. The way you recruit, manage, promote and reward your staff has a direct effect on their productivity and so your own profitability and effectiveness. Staff are an expensive investment but can be your biggest asset; get the whole picture right (maybe not the first time!) and your business can flourish.
The areas you can look to review are:
- Job Adverts – Is the style right for your company, does it represent how you want to appear? Does it ask the right questions to attract the right candidates, does it enthuse them about the Company?
- Where do you advertise, is this the most appropriate place? Can you consider candidates with different types of backgrounds to do the jobs you need doing well?
- Is the advert ‘legal’ and not discriminatory (about age, abilities, physical fitness etc).
- Are you recruiting staff with the correct employment ‘status’ and giving them their full employment rights?
- Salary Levels and Benefits – Consider what motivates the type of staff you employ – are you offering the right benefits? Is the salary level correct? What training is attractive to candidates and crucial for you?
- What is your industry norm for benefits and can you do better? For e.g. Paying slightly more may attract better candidates that need less intensive management (but will it keep them motivated in the long term?). Or is pay less important than time off (offer more holiday) or work-life balance (allow flexible working)?
- Don’t make a name for yourself as a bad employer who doesn’t give staff the employment rights they should have or treats them harshly and unfairly.
- If you are employing Freelancers and Contractors do you treat them well, communicate with them about their project and pay them on time. Integrate them into your normal team and ensure the rest of your staff know what the Freelancer is there to do. Read our advice on working well with Freelancers here.
- Application Form and Admin – Is it capturing everything you need from candidates before the interview?
- Consider what skills and qualities you are looking for carefully – ask them to explain why they are a good fit for your Company.
- Who is responsible for receiving, shortlisting, and generating replies/invites/feedback/rejecting? Can this be streamlined i.e. bits of the job given to other people, to save you time?
- Be mindful of complying with GDPR legislation by making sure all the job applicants have access to a copy of your Job Applicant Privacy Notice.
- Job Description/ Person Specification – Is it ‘tight’ enough to indicate what you absolutely need in candidates?
- Shortlisting – Do you have a shortlisting sheet to ‘score’ candidates, so it’s consistent? How many people do the shortlisting, 2 people is recommended? On average, how many people do you shortlist – is this too much or not enough?
- Don’t recruit in your or your teams’ own image – consider candidates with slightly different skills that are different to what you already have, as they may complement and enhance existing ones.
- Interviews – Do you have a template of interview questions that cover all the skills you need? Do you keep a score-sheet at the interview so you can compare candidates? (and keep the info).
- Are there any tests you could carry out, not necessarily practical ones, to test things like attitude, flexibility, their fit with your values? etc.
- First impressions are crucial so consider how you stand out against your competitors? The Recruitment process is not just about assessing candidates it’s about selling your company so ensure you tell them of the highlights of your organisation and the job itself.
- Consider what impression the interview and location give the candidates (no interruptions etc).
- Do you give them a quick tour of your premises/introduce to others when they come for interview to gauge their reaction, interest etc?
- Make sure you don’t ask questions that are illegal! You can’t ask discriminatory questions at the interview such as age, retirement, marriage/civil partnership or other relationships status, having children now or in the future, disability, health, weight, race, religion, sex or sexuality.
- Consider whether you need to concentrate on competency based questions or Company value ‘fit’ questions.
- Do you ask them for their feedback at the end of the interview and if they are still interested in the job?
- Induction for new Starters – Getting induction right is crucial – it gives new starters the idea of how the company operates and the ‘culture’; what is acceptable and what they are expected to achieve.
- Have you formalised your induction plan so everyone gets the same and nothing gets forgotten – which includes the policies they need to know about, pay, holiday, sickness, behaviour, dress codes, facilities and amenities, customer service standards, ID badges, Health and Safety, access and security, car parking, introductions, job purpose, who your customers are, Company mission statement, values, communications, supervision and appraisal, training and so on……?
- Do you nominate 1 person to do each new starters induction? Are they the right person? Do you need a ‘buddy’ system for new starters (some staff enjoy doing this)?
- Probationary Reviews And Appraisals – How often do you do these? Every month or just at end of probation? A quick monthly review is better to solve any problems quickly.
- Do you consistently conduct Appraisals and are you using the right format and providing a meaningful system for all those involved (rather than just box ticking/form filling boredom!)? There are many styles of Appraisal and one will fit your company.
- Management of staff – Consider what sort of training or coaching would benefit individuals so they manage by example. Do any seniors/supervisors/ managers need training on any aspect of management? Are they capable of ‘leading’? Consider coaching or mentoring for managers and supervisors rather than just practical skills.
- A confident, experienced Manager is key to a successful business. Your staff will be the ones who embody your Company’s Mission and Goals. Managers who are inexperienced, ignore policies that are in place for the benefit of the business, bully staff, fail to learn from their mistakes and set precedents that are not appropriate, may damage the business as it grows, with expensive consequences.
- You need to have realistic expectations of your staff (its not their business after all!), but don’t put off reinforcing hard messages when staff do something wrong because you are busy, as this will make the problem worse in the long run. And be consistent if you have problems with staff – treat staff the same in how you handle problems.
- Set out clear responsibilities, goals and objectives for staff and freelancers, and review them regularly.
- Read our Leadership Tips for Entrepreneurs here.
- Communication – It might be very simple! In a 2014 survey by a recruitment website of 2,000 workers and 500 employers / managers, more than 58% of British workers don’t believe they were thanked enough at work. Over half said this made them feel unappreciated and 41% said they felt demotivated as a result of this.
- Share your business’ plans, challenges and opportunities and give employees the opportunity to provide feedback about their work and share their own ideas for improvement in all aspects of your business.
- Consider how you communicate and how often – via technology, paper (!), face-to-face and how you will respond.
- Maximise the opportunities to provide work that is fulfilling and challenging (but achievable) and review all the company’s policies and procedures and systems, including technology, with your staff, so that staff are able to do simple things quickly.
- Turnover Rate – What is your annual turnover rate? Is it too high?
- Do you conduct exit interviews? What are the reasons people give for leaving, is there a consistent (honest) theme? Do you have consistently the same problems with staff, what is causing this, is there a different way you can manage staff, encourage and motivate them?
- Staff don’t usually leave because of pay alone, they leave because they dislike their boss, their colleagues, their job, the employer, or think their career and development prospects, their work-life balance are not enough.