SMEs are the backbone of the economy. With 21 million of them employing some 33 million people across Europe, (1) and the figures being even higher in the USA, the World Bank stated that ‘formal SMEs contribute up to 45% of total employment and up to 33% of national income in emerging economies’. (2)
One of the inherent strengths of the SME as opposed to bigger companies is the agility they have to respond to opportunities, but conversely this speed can increase their risk of making mistakes – especially when it comes to recruitment.The cost associated with re-recruitment is startlingly high, with studies (3) finding that the loss of an employee on £25,000 per year has an average financial impact of £30,614 in terms of rehiring costs and loss of productivity.
Thankfully, there are steps you can take during the recruitment process to minimise the risk of such costly errors, and even if you are part of a larger organisation, there are lessons you can take from SME recruitment and implement in your own company.
Look for People Who are the Best of Both Worlds
The best recruits are the ones who can balance working autonomously with following processes. Those who don’t recognise the benefits of autonomy will have issues with the independence required within a growing SME, whilst those who can’t follow instructions will perform poorly and you won’t achieve efficiencies of scale. Autonomy is key to motivating and engaging people, as well as to mastery and purpose, according to research.
You may think that employees who have come from larger organisations are at a disadvantage when joining an SME, but this isn’t true. In fact, the knowledge they bring with them can be scaled down to use in a smaller organisation that can lead to business growth. When working in small teams, individuals are often required to wear several hats, so to speak, and employees often enjoy the transition from a large company to a smaller one or vice versa, as it expands their expertise and skillset.
Be 100% They are Right for You
In a smaller company where everyone’s position and performance is magnified, it is more important than ever to make the right recruitment choices. This doesn’t refer necessarily to skills, as these can be taught, but to attitude, and this can be gauged during the interview process using a structured assessment centre process combined with a behavioural interview.
First consider the behaviours that correlate with your ideas of success, and from here design assessments and tasks that can measure a candidate’s suitability. Assessments may include role play, presentation, group exercises and psychometric testing. A good interview technique is to lay out the behaviours you are looking for, ask for specific examples of when the candidate has exhibited these behaviours, and evaluating their suitability form there.
Break the Mould
Recruiters often instantly disregard the underdogs in their CV pile, and this can be a big mistake. Those with employment or education gaps, or who have experienced unfortunate disruptions to their lives, are often the ones who feel they have more to prove, and are willing to show loyalty and graft to make their point.They are also more likely to have a wider perspective of the world, and can bring some interesting viewpoints that may never have been recognised before.
Make it Sociable
Skills are important, but those who have got ‘it’ will make themselves known when they mingle with the rest of the team and everybody gets on well. SMEs tend to have smaller premises and fewer opportunities to move people around if there is a clash, so it is more important than ever to achieve the right team dynamics straight off the bat. For this reason, getting your current employees’ input when recruiting, and giving prospective employees the chance to associate with the people they might end up working alongside, should be a priority.
As highly as you might think of your company, don’t oversell it to new recruits.The best working relationships are open and honest ones, without discrepancy, so give them a realistic idea of what they could expect from being part of your team, so that they know exactly what they are in for when they accept an offer. People are in a far stronger position to make good decisions when they have all the relevant information.
Recruitment matters more than ever to SMEs, and it can be hard to get it right, so put thought into your recruitment process and consider the reality of the position you have on offer. Taking some time now to get it right will pay dividends in the future.
About the author: Olivier Herold joined The Oxford Group in 2009 and has been CEO since 2016, leading the global expansion of the company. He is a trilingual leadership and organisational change expert with a passion for leading & facilitating complex projects that provide smooth, integrated and sustainable solutions. Olivier’s experience spans a range of functional and cross-functional roles in public and private sector organisations. For more information, please visit: www.oxford-group.com.
(1) Fact Sheets on the European Union – Small and medium-sized enterprises: www.europarl.europa.eu
(2) State of SME Finance in the United States in 2015
(3) The Cost of Brain Drain, February 2014: www.oxfordeconomics.com