No matter the size, the time in business, or the industry, every small business faces a myriad of challenges daily. Access to capital is arguably the biggest roadblock to every business owner’s ability to address these pains and problems.
This 5-part series, How Smart Financing Can Solve Big Problems for Small Businesses, pinpoints some of the most common bumps in the road for small business owners as well as smart, effective solutions for navigating these challenges. Learn how to deal with hiring frustrations, cash flow woes, business owner burnout, customer retention issues, and time management struggles, as well as how to be proactive rather than reactive when it comes to accessing the funds you’ll need to face these issues head on.
4 Hiring Challenges and Solutions for Small Business Owners
Small businesses can face any number of challenges from the size of their company to its lack of resources, and very few of these challenges are as unavoidable and difficult to overcome as finding the right employees. According to The Megaphone of Main Street Small Business Jobs report, half of small businesses say hiring new employees was the top challenge they faced in 2017.
Key highlights from the report show a variety of issues among small businesses when it comes to hiring:
51.3% cannot find qualified applicants (when it comes to skills and expertise)
26.2% need to raise salary or wages to be competitive
12.9% need to offer other benefits to attract workers
Hiring the right employees can be overwhelming, but understanding the challenges you’re up against can help your small businesses proceed strategically. Here are four of the most common hiring frustrations for business owners and how to overcome them:
1. Finding qualified applicants
It’s not uncommon for small business owners to have a limited pool of qualified applicants to choose from versus larger companies with more recruiting resources. If you want to recruit new talent without a lot of cost, often your best bet is to actively search for candidates using social networks such as LinkedIn or Facebook, and encourage your friends and employees to do the same—word of mouth is powerful and doesn’t cost you a thing.
You may also need to turn your approach away from hiring the cheapest labor you can find—such as recent college graduates—toward seeking candidates with more experience. You’ll find that by hiring more experienced workers who are mature, self-starters that don’t need constant supervision, you’ll free up your time for more important work.
Casting a wider net is worth it to find the right candidate. As hiring is a long-term investment in your company and can significantly accelerate growth, it may be well-worth proactively seeking funds to invest in the process. Once you’ve carefully calculated the return on investment, you can create a smart borrowing strategy to help you bring aboard the right talent that will help your business grow.
2. Offering a competitive salary
One of the biggest hiring challenges for small business owners is offering competitive salaries. While you may be tempted to offer new hires minimum wage from the get-go, start by conducting thorough research in your industry to determine the average pay for the position. You don’t need to pay the highest salary, but compensating new employees fairly will help you recruit quality employees and ensure they want to stay.
In addition to competitive compensation, consider investing in your employees through other benefits such as a generous time off policy, flexible summer hours, a dog-friendly environment, happy hour, remote work opportunities, or a fully-stocked kitchen. While pay is important, remember there are creative ways to level the wage playing field to attract and retain top talent.
3. Lack of training
Training is crucial in any size business, both for getting new employees up-to-speed and for helping your current staff build new skills. While larger businesses tend to have the means and resources for larger-scale training programs or initiatives, small business owners have to be more innovative when it comes to getting employees ready to work.
Think of training as an important investment in your business. Though it will cost you, offering courses and educational opportunities to help your employees advance professionally will immediately benefit the business as well. And advertising these types of benefits will help you attract those qualified candidates you’re seeking.
At the very least, you should invest in resources such as welcome packets, employee handbooks, and dedicated training time for new hires to shadow more senior-level employees. You can also host learning sessions for the entire team so employees can learn from each other while also promoting teamwork.
4. Wearing too many hats
Small businesses are just that: small. As a business owner, you wear many different hats, and so do your employees. When you don’t have the means to hire dedicated staff for every department, your small staff will need to be willing to pitch in and work as a team to make the business successful. It helps to be upfront about what the job entails from the beginning.
Consider investing in a recruiter who can help you find prospective employees with diverse backgrounds and across-the-board experience that will be a good fit for your needs. While it may cost you more money up front to recruit and vet out the most well-rounded candidates, finding the perfect match will pay off in the long run.
Check back next month for part 2 of our series, How Smart Financing Can Solve Big Problems for Small Businesses, where you’ll learn helpful strategies for managing cash flow crunches.
_This guest post was written by Sara Amato of Lendio, for Fundbox.