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The following topics will be discussed in this post.
- 1. Think it through first
- 2. Get on with the costs
- 3. Know your legal responsibilities
- 4. Hire for track record and potential
- 5. Don't skip the reference check
When it comes to small- to mid-size enterprises or SMEs, each country and industry has its own definition and criteria. But in general, running an SME is much like managing a business that falls below a specific level of assets, revenues, and number of employees.
Despite that, SMEs still undeniably make up a big percentage of the entire business population. In general, SMEs may include businesses such as trading companies, retailing, small manufacturing facilities, rental, and service companies.
The catch is, many SMEs fail because of lack of experience, money problems, and most of all, poor planning. One important key to running a successful SME is choosing the right people on your team.
If you haven't planned yet the employment part of your SME, these tips can help you out:
1. Think it through first
Before anything else, you need to first think if you really need to hire employees. This will greatly depend on the type of SME you're looking to start. Services such as marketing and accounting, for instance, can now be easily outsourced.
For expansion, the web is typically the best option. You can maintain a business website by hiring a freelance website designer instead of getting a full-time one.
You can now virtually hire administrative assistants too. Avoid hiring employees more than you need. You should have a specific number of employees in your business plan. Every employee you hire adds to the overhead costs such as training time, workspace, and compensation.
2. Get on with the costs
Once you've made a final decision about the number of employees and outsource services you need, it's time to factor in the costs. First, determine if the employees you'll be hiring are for full-time or part-time positions.
Include in your business place the entitlements for every employment type. If you're planning to use a recruitment firm, take note of those costs plus the other advertising requirements.
Other financial costs to consider include payroll tax, training materials or courses, workers' compensation, and equipment such as devices and uniforms. Don't forget to factor in the non-financial costs, like the time you need for the new roles' training and management.
3. Know your legal responsibilities
The third thing to look into is your legal obligations. This always goes hand in hand when you hire a new staff member. Ignoring the importance of these legal responsibilities is one of the biggest mistakes of many SME owners.
The first thing you should look into is your tax liability. You need to check the employee's Social Security number and work eligibility. If you're offering employee benefits, check the particular rules and regulations for it in your state or country.
There are also off-limits interview questions, so only ask the legal ones on the interview process. The same goes for background checks. Many states have limitations on the information you can access.
In most cases, you can run a criminal background investigation but not credit checks.
4. Hire for track record and potential
Some experienced business owners suggest hiring based on educational background and work experience, while others recommend focusing on the candidate's potential. Why not consider both, right?
Let's first talk about the track record. In general, the candidate's degree and other educational credentials should complement your SME. Take note of positions that would require advanced educational programs or postgraduate degrees, whether taken online or not.
These may include a master's or doctorate degree.
Next, you may consider the work experience of the employee. This might not be essential, but a candidate with a solid work background can be a great asset to your new business.
Lastly, hire an applicant with strong passion and interest in the missions or causes your SME has. Look into the potential of the employee and avoid turning down based on track record alone.
5. Don't skip the reference check
Checking the references of the potential employees can have more impact than you expect. On average, an applicant should provide at least two professional references and one personal.
Do not miss calling these references to get more information about the applicant's character. When talking to professional references, focus on objective queries only. They should directly relate to the duties and job performance of the applicant.
For personal references, you can ask about the work ethic and character of the candidate.
Regardless if you're an online retailer, a freelancer, or a contractor looking to have your own SME, this guide can help you out. Remember that your employees are your business' lifeline, so make sure you choose the right candidates.
Incorporate these tips into your business plan and implementation, and you'll have the best team to run your SME.
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