When you own a small business, every decision is a big decision. Every choice causes a ripple effect throughout the company. One of the biggest decisions is how to approach hiring new employees.
A good team can turn a small business into a Fortune 500 Company, and a bad team can turn a small business into a less fortunate one. It sounds dramatic, but the cost of a bad hire can be very high. A quick internet search tells you everything you’d ever want to know about companies that failed due to bad employees.
To save time, let’s just say that you don’t want to be one of the less fortunate businesses. With so much at stake, you must take the hiring process seriously from the beginning.
Unfortunately, hiring can be expensive. Every job listing, interview, and training day represents money. When you’re on a tight budget, it adds up quickly. So what’s a small business with a budget to do?
It can be challenging, but it’s not impossible. Here’s how to approach hiring when you own a small business that’s on a budget.
Temporary staffing is when you hire employees to work for your business for a short amount of time. This can be done internally or through an employment agency.
There are several things to know before hiring temporary staff, but for now, let’s stick to the budget benefits.
Hiring a temporary worker allows you to assess the importance of the role and what skills are necessary. With that information, you can find the ideal candidate for the role, assuming that it’s necessary. If you discover the role is unnecessary, you’ve saved the cost of hiring and firing a permanent employee.
While you’re making your decisions, you can save big on medical and dental benefits, vacation and sick pay, retirement, and other benefits that are reserved for full-time and part-time workers.
When you’re on a budget, temporary staffing is a great way to cut costs and buy yourself some time to create a permanent hiring plan. This form of staffing is also a great way to handle seasonal roles or bulk up your team if you suddenly have a busy period.
Independent Contractors / Freelancers
Independent contractors and freelancers are very similar, but there’s one difference to be aware of before we continue.
Independent contractors usually work for one company at a time, while freelancers often work for multiple companies. This becomes important if you have a non-compete clause in place, as freelancers often work for companies that are in the same field. Make sure there are no conflicts of interest before doing any hiring.
With that out of the way, let’s talk about how independent contractors, and freelancers, can have a positive effect on your budget.
Independent contractors and freelancers are responsible for their own health insurance, and you don’t have to provide paid vacation, sick days, or holidays. That adds up to big savings for your budget.
Additionally, independent contractors and freelancers can be hired on an as-needed basis. This means that you can have qualified professionals perform tasks for you, without worrying about maintaining a permanent employee.
This option is ideal for when you need someone with particular expertise, but you don’t need them often enough to justify a regular hire. For example, let’s say you need a graphic designer to create your logo. That’s a job you want to be done by a professional, but it’s unlikely you’ll need the service more than once.
Independent contractors and freelancers give you the high-quality work you need, with a lower price tag than traditional hiring.
Traditional Hiring With A Twist
You know about traditional hiring. It’s the standard practice of hiring full and part-time workers to stay with your business until they leave, or you ask them to. It’s the preferred way to build a talented, loyal staff, but it’s also costly.
Listings, interviews, training, benefits, it all adds up. Hiring the wrong full or part-time employee can really take a chunk out of your budget. On average, you spend a fifth of an employee’s salary on hiring. So if you hire a bad employee, and then have to replace them, the cost rises quickly.
Luckily, there is a twist to traditional hiring that can help you can find qualified, talented, and loyal candidates, without having to spend a fortune. The secret is making them come to you. You want your ideal candidates to think you’re the perfect place for them to work so that they’ll seek you out.
This is accomplished by implementing recruitment tactics, which is a skill you can learn right now in Recruitment marketing 101. The basic principles are that you attract employees through your storytelling, technology, and strategy. By taking advantage of these tools, you can hire qualified candidates right away instead of cycling through expensive new hires.
Building a reputation and strategy that attracts the right kind of employee saves you countless energy, time, and money that can be better spent. Your budget will thank you for taking the time to make sure the permanent employees you hire are actually permanent.
These three approaches to hiring employees will find you the right team without breaking your budget.