Industry Market Trends

Hiring Tips for Small Business

Sep 01, 2009

Finding the right candidate for a position is hard enough, but hiring for a small business presents additional challenges. What strategies can small businesses use to attract the best and the brightest?

When it comes to hiring new employees, small businesses have traditionally struggled to compete with larger firms. A small business might not have the resources or time to devote to a large-scale recruitment process, and it may also lack a human resources department to take on the brunt of the work. But with recent layoffs among major companies and the shift toward an employer's market in the world of job-hunting, now may be the best time for a small business to secure the best candidates.

According to a recent survey from, more and more workers are targeting employment opportunities within small business. Among workers who were laid-off from full-time jobs in the last 12 months, 22 percent found new positions at small businesses, while another 59 percent said they are interested in working for a small business.

When asked what appealed to them most about working for a smaller company, survey respondents cited a familial work environment (56 percent), a greater level of individual recognition (49 percent), the impression that one's work makes a noticeable difference (48 percent) and a lack of corporate bureaucracy and red tape (46 percent).

Approximately half of all private-sector workers are employed by small businesses, which pay almost 45 percent of the total private payroll nationwide, represent 99.7 percent of all employer firms (those with one employee or more) and have generated 60 percent to 80 percent of net new jobs annually in the last decade, according to the United States Small Business Administration.

The latest Small Business Scorecard released by SurePayroll, a small business payroll and tax-filing firm, showed that small business hiring increased by 0.2 percent in July, with a 21-point improvement in the hiring index since June. This means that the average size of the small business workforce has increased relative to the previous month.

Now that candidates are being drawn to smaller companies, how can a small business take advantage of the opportunity to hire the most qualified people?

According to the newly released Small Business Hiring Guide from, "employment branding" may be one of the most beneficial strategies for embarking on a hiring program. This involves cultivating the image of being an excellent place to work. When your company has a positive reputation, it becomes easier to attract new talent.

"Factors important to candidates in evaluating a potential employer include company culture, stability and longevity in the market, company reputation, career advancement opportunities and flexible scheduling options," the Small Business Hiring Guide explains.

Having knowledge of the job market is also important to the hiring process. suggests obtaining statistics on the types of candidates that can meet your company's needs, reaching out to them through targeted messaging or social media networks and trying to understand the recruitment process from the applicant's perspective.

According to, writing an effective job description is a crucial first step in finding the right candidate: "A proper job description will identify the job's title, the range of tasks involved, and any requirements in terms of education, work experience, professional certifications and technical skills." But employers should be careful not to over-define the role, as some flexibility in the skill set may come in handy.

Likewise, switching from a conventional interview process, which focuses on a candidate's background and credentials, to a behavioral interview method, which concentrates on how a candidate would handle real work situations, can help employers sort through the labor pool.

But knowing where and how to look for candidates requires a specialized approach. offers the following tips for searching the applicant pool:

  • Use personal contacts. Some of the best candidates may not even be looking for a new job, but if you can leverage a personal connection with them through an associate, customer or even competitor, it may be an excellent way to attract them to your company.
  • Accept referrals. When a trusted colleague or friend recommends someone for a position, use their judgment as validation to pursue the candidate.
  • Purchase professional help. Although it may be expensive, hiring an employment agency or search firm can be worth the price if they secure an excellent employee for you.
  • Consider a temp. It's not unusual for temporary employees to prove themselves capable of filling a role full-time, so hiring on a short-term basis may lead to long-term results.
  • Target your advertising. When posting job openings, try to target outlets, such as trade publications or Web sites, that seem appropriate for the sort of the candidate you're looking for.

As the market for private-sector hiring improves and smaller companies become increasingly competitive with larger firms in attracting qualified employees, we may see more top talent migrating to the modest end of the business landscape.


Building (and Rebuilding) a Reputation

Making the Right Hire


Four-in-Five Workers Looking to Small Businesses for Jobs..., Aug. 13, 2009

U.S. Small Business Administration: Frequently Asked Questions

Small Business Scorecard

SurePayroll, July 2009

Small Business Hiring Guide, July 2009

How to Find and Hire Good People, May 1, 2008

Hiring and Orienting a New Employee

by Martin E. Davis, 2009