Recruiting for the Small or Home Business

Tim writes: In my experience as the owner/director of 3 small businesses I have found that the best way to recruit staff is through word of mouth or from existing contacts (people we know). I find these routes to be the most practical for the follwoing reasons.

1. We are a small team and the person will need to fit into an almost family-like environment.
2. We have a good idea of the skills needed and the sort of person who would fit in.
3. We don't have a budget to spend on a recruitment agency.
4. We do have the time and skills to interview the candidates.
5. We cannot offer a high salary but we do offer perks (free language holidays abroad, for example)
6. We also have the added advantage in Italy of being able to start people off on a trial work-experience for a few months for little or nothing.
7. Sometimes the right person is someone we know and who is actually looking for the kind of job we are trying to fill. We just have to realise who they are.
8. People who we know and live near to us will have less travel time to work. This is a very important factor in Italy.

What do you other small business owners think or do?

In Answer:
Tim - good words!

Most recruiters will take any brief, but the issue as you point out comes down in small scale organisations to as much about "fit (in team)" as "function."

I have a hard rule now not to deal with organisations below 30 employees for permanent placements. Often, below that line the business is still run in the spirit and fashion of the original and successful owner - who hence does want to change a successful system for fear of failure, and who wants people who do things their way; and there are as many off-agenda issues outside as on job description. Bringing in a recruitment company means often they will advertise the place, which means getting into more regulation - small companies often have weak HR procedures, only found out when an ambulance chasing lawyer or bitter ex-employee wreak their wroth. I find the pensions policy question is the easiest test of depth of HR procedures - "what" being the normal answer!

I think what you have suggested is the best way of recruiting for a small company - fit is far more important, and the wrong personality will be at least three times as costly as average stat's state, probably more like ten in reality.

The best thing I learnt on my MBA was about Anderson steps - its about how people relationships and management structures change as organisation grow. HP employ this a great deal, as no group there gets above 120 people. At the start, you need people you know and can work with as a team (Mike Southon's model is the best here for an early stage team) - you will not only know how these people work, but also a lot about them. I like applying the "coffee" test for stages up the steps: at the early stage you will know what they drink and how, which mug they use, the dates of their kids birthdays, the way they drive to work/to home, what they do on the weekends, the colour of their lounge carpet, etc. At about 30 people you'll be doing well to know what everyone drinks - hence the need for stronger management procedures, controls and corporate communications. Hence, in what you state and in my view - a lot of early stage choice has to be about fit over function. As long as you have a good tick somewhere in the basic function boxes, fit and energy can provide more - processes and roles can come later!

If you do run a sub-10 person company, and have to approach a recruiter, consider using contracting methods and temporary employment as the basis of testing fit. That won't always be possible with some positions/some candidates, but - it will be far less costly from choosing the wrong fit; and it will mean you end up with a better chance of a proven long term hire. If you use this method, don't fall for the recruiters "X% on contract, and Y% on permanent" fee's - that's two bites of the apple (its how the High Street guys make their money), and if they want a long term relationship, a bit of a discount against fee's for an exclusive relationship is wholly fair to all parties