Through conversations with management teams and our experience operating in the lower middle market, we’ve found that hiring and retaining talent is typically the number one challenge small businesses face.
In a world of escalating wages, enticing bonuses and perks, as well as remote work flexibility, it is tough to differentiate one’s company and ultimately land top talent.
People drive businesses, and critically thinking about the best ways to approach the prospective candidate pool is essential.
This article will discuss the importance of culture, candidate sourcing, the interview process, ways to make your company stand out come offer time, and much more!
Start by determining where the candidate will fit
The first step to kick off a search is to think about the future organizational structure of the company.
- Where does this hire(s) fit into the short, medium, and long-term business plan?
- Will this hire cause any necessary adjustments to the current team?
A clear, concise job description is crucial to ensure candidates with the appropriate skillset apply for the open role.
There are several avenues where you can source talent, such as LinkedIn, Indeed, executive search firms (Robert Half, Insight Global for example) as well as internally through your company’s network.
We have found that some of our most successful hires were through an internal referral, which makes sense given the current employee has a solid grasp of the company culture and what the day-to-day responsibilities might look like. Therefore, he/she can source talent accordingly. Incorporating a referral bonus for employees can be powerful as well.
Digging deep to assess potential new hires
To state the obvious, there is not much to go off of beyond one’s resume in the early stages unless the candidate was internally referred.
This is where digging in deeper will be helpful by triangulating a candidate’s previous contributions and how he/she arrived at a certain accomplishment listed.
In our part of the market, we emphasize professionals who are doers as compared to managers. This is not to say that a candidate with managerial experience is looked upon unfavorably, but rather it is important to ensure that he/she has a workhorse mentality and will step up for whatever needs to get done.
After you receive these responses from your candidates and learn more about their goals, hopefully you will be able to start your preliminary rankings.
So where do you go from here?
This is where culture comes into play and becomes a differentiating factor. Ultimately, competitors can replicate products or closely mimic services offered, but culture is unique to every company.
The importance of cultural fit when hiring
At Lancer, cultural fit is by far the most important factor we consider during our interview processes, be it internally or for our portfolio companies.
Culture drives everything from day-to-day interactions with team members to communicating your company’s values to building trust with your business partners.
So how do you ultimately know if someone is going to be a cultural fit?
First, we typically ask a candidate to fill out a personality assessment. We like the workplace profile that is offered by DiSC. These exercises are instrumental in our process as we gain more in-depth knowledge of a candidate’s overall behaviors, tendencies, communication style, and work environment preference.
As we continue to have more conversations with a candidate, we start to envision how he or she may interact with other team members, management teams, advisors, and investors.
It is helpful to propose scenarios to a candidate and see how they would react to and handle certain situations.
Another helpful trait to focus on is self-awareness. Strong candidates can discuss their strengths and weaknesses, times they’ve failed, and lessons learned.
In the world of business and especially with small businesses, there will be plenty of ups and downs. A candidate who displays previous experiences where they’ve had to pivot and adapt their approach will stand out.
After discussing feedback internally, we typically have a good sense of whether or not to proceed.
Focusing on technical experience of the candidate
Considering the above, culture should not be the sole factor in a hiring decision. It is also necessary to home in on the technical aspects of the open role. It will be key to figure out what are the must-haves vs. nice-to-haves.
To reiterate, lean in on what a candidate performed in their previous roles. It is easy to list credentials, but figuring out how much value and impact he/she had on certain projects will be helpful.
Some skills can certainly be taught, but some are necessary on day one. Circling back to a point made earlier, each company has its own unique culture and organizational structure.
A company’s employee base could have a lot of depth and be able to extensively train incoming candidates; however, it is more common in the small business world to encounter lean teams with professionals wearing multiple hats and not having the capacity to run a robust training program.
Time to present an offer to the candidate
Now comes the fun part: offer time!
Similar to a job description, a formal offer letter should clearly define salary, incentives, benefits, and any material, associated conditions. Depending on the company, there may be flexibility across these aspects.
Ultimately, the goal is to put forth an attractive yet fair offer and not overextend the company budget, given doing so could cause some headaches down the road or resentment internally if the pay package was somehow revealed.
We recommend extensively researching what the role or similar roles are commanding on the open market. It will also be useful to leverage one’s network to get a better feel for the current job environment.
To make your company stand out beyond compensation, think through any additional pieces that can be offered, such as work-from-home flexibility, additional PTO over time, etc. When all is said and done, if your offer is in the ballpark, company culture very well may be the deciding factor.
LCM Note: This is our inaugural content piece where we will be discussing relevant topics in the world of small business. We hope you find our insights to be helpful, and we welcome any feedback. More to come!