8 Common Pitfalls in Small Business Hiring You Need to Avoid

Published by Matt Brady | June 18, 2018

Hiring new employees is one of the most rewarding — and challenging — components of being a small business owner. So much effort goes into recruiting interested persons, collecting resumes and interviewing candidates that business owners often get lost in the midst of the process. The obvious result might be a mistake in hiring, but in reality the more common challenge is a failure to retain a solid hire who gets off to a rocky start. Here are eight common pitfalls in small business hiring and how you can avoid them:

1. Make sure you actually need the new hire.

Feeling overwhelmed is not a strategic basis for making a hiring decision. As a small business owner, you’re going to feel overwhelmed a lot, simply because that is what goes with the choice you’ve made to start and run your own business. If you make an emotional decision to add a staff member on the basis of your feelings, you run the risk of introducing chaos and failing to address more substantive underlying issues.

Are you overwhelmed because you’re a poor delegator, perhaps? Or maybe your business processes are not well-defined and as a result, you’re spending too much time fighting fires. In the first case, you need to give more responsibilities to existing staff and in the second case, you need to hire a consultant or task a key employee with a special project to sharpen your operations before you add to the headcount.

Before starting a hiring process, make sure that hiring is really the right solution to the needs you are perceiving – and that the needs can be concretely documented and defined, with data to back them up.

2. Determine if this needs to be an in-person role.

Assuming you’ve determined through rigorous evaluation that you need a new position in the company, and that the time to pull the trigger is now, ask yourself how this position needs to be structured. Does this need to be an in-person, in-office hire? Or can the work be outsourced to a third-party firm (such as a human resource services company or an outsourced accounting firm)?

In addition, consider the advantages of hiring a remote employee or testing the waters first with a part-time freelancer who can reduce stress and take on some workload, while you more thoroughly evaluate your long-term needs. Remember, of all of the options noted here, hiring a full-time, in-office employee is the one with the most cost, most time demands and most risk. Choose carefully.

3. Define the responsibilities and duties of the position clearly.

You’ve decided to hire an FTE, and start recruiting for the position. You may be encouraged to write a very short position description for the job ad or for online recruiting, to keep things simple — and that may be a good move to attract candidates and emphasize the positive aspects of your culture. However, don’t confuse simplicity in your recruiting posts and ads with the very real need to be extremely precise and detailed in writing up the responsibilities and duties of the position.

Just because you run a small business, does not mean you can expect employees to just ‘roll with the punches’ and do whatever you think needs to be done. People need structure, and they need clarity about how they are going to be managed, evaluated and made responsible for the essential tasks of their jobs. Take time to document those points with precision and depth.

4. Make sure your hiring process is up-to-snuff.

So, now that you’ve started recruiting and advertising for the position, resumes are coming in. You’re about to schedule your first round of candidate interviews. Great! Now what?

Do you have a written process in place for how candidates will be evaluated? Have you defined the methods you will use to conduct each interview? What factors are you looking for in the candidates, and how should they demonstrate that they can meet or exceed them? What indicators will you regard as disqualifying a candidate, or alternately, putting a candidate at the top of your list?

In addition to these fundamental steps in defining a clear hiring process, you also need to give serious attention to hiring compliance. For example, in some cities and states, you’re not allowed to ask questions on your employment application or in your initial interviews about whether or not a person has been convicted of a crime (these statues are commonly referred to as “Ban the box” laws).

In other localities, new statutes are being passed to restrict employers from asking candidates about their previous salary or pay history (to reduce gender and racial inequality in how much people are paid for the same job). Are you aware of other provisions and restrictions, such as what you’re not allowed to ask or what candidates should be told not to share with you (such as their religion or marital status)?

Before you hold your first interview, you’d better know what you need to do to comply with federal, state and local laws.

5. Listen, listen and listen some more.

You want to know what the number one problem with job interviews is? Simple: it’s hiring managers who don’t stop talking. This may sound counterintuitive, since most hiring managers will say that the number one problem they have with interviews is candidates who don’t stop talking (thanks largely to being so eager, and nervous, to get their talking points out and make sure they share their story with you). But no, that’s not the number one problem. You’d be surprised how much hiring managers over-talk in the one environment in which their goal should be to talk very little.

In small businesses, this is particularly acute because hiring decisions often involve such a high degree of stress — and hope. Small businesses depend upon each team member so heavily that owners and managers often get excited about solving their pressing needs with a new hire and spend too much of the interview process expressing this to the candidate.

While enthusiasm is great and it can help generate enthusiasm with candidates to boot, you won’t have a successful interview unless you actually conduct an interview! Create a list of questions, prepare to write down notes from each answer provided by your candidates, and practice avoiding the temptation to interrupt, so that you gain as much as you can from each interview, successfully.

6. Take time on the background check and employee references.

Now the interviews are largely behind you and you’ve found the “perfect” candidate, who is eager to start and ready to join the team. You’re excited and would love for this person to start ASAP. You’re particularly impressed by their perceived trustworthiness and professionalism, so you don’t really need to stop for a background check and employer references, do you?

Yes. Yes, you do. You absolutely need to take that time – with every candidate you want to hire. Research demonstrates that hiring managers have an unconscious bias to assume that people who look, talk and act like them (and are typically from a similar educational or cultural background) are automatically more trustworthy than other people. While this is a deeply ingrained unconscious social convention, it’s also dead wrong in reality. None of these factors have anything to do with a person’s actual, statistical likelihood to be trustworthy and professional as an employee.

If the background check process will take a week and a half, then let it take a week and a half. If you struggle to reach some of the employee’s references or former hiring managers and you are getting impatient, take a deep breath and exhale slowly as you regain your patience. This is the most important step in your process — verifying that what you perceived of the employee’s character and demeanor is likely to actually be true.

7. Prepare for life after the hire, not just life before it.

Many small business owners fail to prepare effectively for the hiring process itself, but even fewer attend to what happens after the hire. Remember that the number one objective of hiring an employee is to…keep that employee! If you lose staff routinely after 90 days, six months or a year, there’s something fundamentally wrong with your business — and you’ll not only lose customers over it but you’ll lose countless sums of money as you spend new dollars every time to start from scratch.

Take the time now to plan for a successful onboarding experience for each new employee. Welcome them with open arms, and give them a fresh experience on their first day and first week. Consider assigning all new employees a mentor, so they have someone to turn to for neutral and reasonable real-world advice as they learn and navigate your office culture. Give them early goals to hit that help them feel that they are making a contribution, and clearly define training and skill development requirements so that new hires can grow quickly and effectively over time.

8. Start now to prepare for the next hire, and the one after that, and the one after that…

Now that you’ve successfully built effective processes to recruit, select and hire new personnel — and processes to onboard and retain them — it’s time to put this knowledge and commitment to good use.

Don’t just start the process now for one hire and then stop after the person is selected and on the payroll. Now is the time start preparing, and potentially recruiting, for each hire you’re going to need in the months and perhaps years ahead. The earlier you start, the more prepared you will be and the stronger your applicant pool will be, too.

In addition, smart companies that are ready for more advanced strategies know that often the best candidates are those who are not actively looking for a new position, which means that taking more time to recruit target candidates directly can be highly valuable, even though it takes a great deal more time than traditional recruitment marketing and resume gathering. In addition, many small businesses have regular openings for hourly staff or for part-time needs, and for these positions you should never stop recruiting.

What these eight strategies demonstrate is that avoiding pitfalls in small business hiring begins with a clear strategy and continues with a thorough and carefully defined process. Begin now to work with your team and build effective hiring processes that can serve your small business and help dynamically grow your team for the future, today.

Image Credit: Riley Yandt (Flickr @ Creative Commons)