The Battle for Talent
A strong economy is a good thing. But for small businesses, it brings a fresh challenge: When the unemployment rate is low (it hit 4.4% in October), how do you compete for talent? How can you convince candidates to choose you rather than that Fortune 500 company that may be offering signing bonuses and stock options, in addition to gold-plated benefits and high salaries?
First, make sure that recruiting is a high priority. "Many small business owners see hiring as the thing that gets in the way of their doing their real job," says Steven S. Little, author of The 7 Irrefutable Rules of Small Business Growth (Wiley 2005). "My response is, 'This is your real job.' Hiring the best and the brightest is the most effective way to grow your business."
The most successful business owners recruit continuously. Wherever they go-on a client call, at a trade show, or at the Rotary-they keep an eye out for individuals who someday might fit into their organizations. They get to know them-over coffee, say-then keep in touch. When an appropriate opening appears, they start with a strong candidate.
Two: Work your network, says Robert W. Wendover, author of Smart Hiring: The Complete Guide to Finding and Hiring the Best Employees (Sourcebook 2002). A referral from a trusted associate is worth 100 responses to a recruiting ad-and you avoid employment agency fees, too. Tap your trade and college alumni associations, which can clue you in to skilled talent, too. When an opening appears, make a list of 25 people you know and call each one to tell them about the search, Wendover says.
And don't forget to tap your own staff for recommendations. They should have a keen sense of who can do the job and fit your culture. As head of two consulting companies, Wendover says he gave bonuses of $500 to $1,000 when a candidate referred by an employee was hired-plus a kicker if the new hire lasted a year.
To land the best candidates-and keep them--you have to make a competitive offer. David Wood, president of Watchfire Signs in Danville, Ill., uses Illinois Compensation Data from the Illinois Chamber of Commerce to benchmark salaries and benefits. As a result, the manufacturer of electronic signs has sweetened its benefits, including providing paid leave for family illnesses and improving a short-term disability plan. The company also pays 75% of the premiums for the family medical plan and has instituted a bonus plan for high-level personnel.
Like many small businesses, Watchfire is located in a small town. There isn't a large labor pool and not many qualified candidates want to relocate to Danville, a town of 33,000 that lies100 mile south of Chicago. So Wood grows local talent, by offering paid internships for engineering and computer-science majors at nearby community and four-year colleges. That has helped fill positions, but he concedes there is a risk of giving ambitious young Danvillites the skills to get out of town: "Last year we lost three top interns to Fortune 500 companies," he says.
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