There is nothing more crucial to the success of a start-up business than the skills and attitudes of the first few people it employs.
Every time you recruit someone, you take a risk. But if you put in the time and effort needed to find the right people, your investment will be repaid many times over.
This briefing explains how to:
- Decide on the type of person you need.
- Attract the right applicants.
- Select the best candidates.
Before you start looking for a new employee, be sure you have answered four key questions.
1.1 Do you need to recruit?
- Do you have the time and ability to do the work yourself?
- Would you be better off using an outside contractor, eg a maintenance company?
- Is the work that needs doing temporary?
If so, should you bring in a temp?
- Can the work be handled by sharing the task between existing staff?
1.2 What does the job involve?
- What major responsibilities does it carry with it?
- What parts of the job are routine and what are occasional tasks?
- What equipment has to be used?
- Who will the new person work with?
1.3 What kind of person do you need?
- What skills are essential and what are desirable? For a small business, practical skills and experience are often more valuable than formal qualifications.
You need people with the right attitude - reliable, flexible and willing to learn.
- Which skills can you teach, and which skills must candidates have already?
- How much experience is required?
In a start-up business, you need to recruit people who will become productive as soon as possible.
- Basic qualifications are a rough guide to people's ability, interests and the standard of work you can expect from them.
However, previous jobs and experience may provide a better indication of people's strengths and skills.
- What kind of personality does the job require?
From this you should draw up a list of criteria against which you can assess candidates during the interview process.
Note that it is illegal to discriminate on the basis of race, sex, sexual orientation, disability, gender reassignment, pregnancy or maternity, marital or civil partnership status, religion, philosophical belief or age.
Do not require applicants to have attributes that rule out a particular group.
1.4 How much are you prepared to spend?
- You will have to pay the cost of recruiting the employee.
- Once you take someone on, you will pay a salary and other continuing costs.
These will include employer's National Insurance, any pension contributions you make and any other perks you provide.
- How will your offer compare with other employers? Will the value of the salary package be high enough to attract the right candidates?
2.1 Advertising can attract a wide range of applicants (see 3).
- New opportunities are opening up with the development of large and sophisticated job sites on the Internet.
If you have a website, list your job vacancies there. You can guarantee that anyone who sees the ad has at least a passing interest in your company or your products.
2.2 The right people for a start-up business are often found via recommendations and unsolicited applications (eg people walking in and asking for a job).
- Keep a file of potential candidates and a record of the date each applied, so you can call them when you need someone.
- A quick interview - even when there is no job available - will tell you whether someone might be suitable in the future.
2.3 Foster links with local schools and colleges.
Get to know them, so they send you their promising candidates.
- Many companies hire bright, enthusiastic trainees to fill junior positions, with the intention of promoting them later.
2.4 Jobcentre Plus is most often used for the recruitment of temporary and permanent staff earning up to £20,000 a year.
- Jobcentre Plus can screen applicants for you, and select the best for you to interview.
They can also provide you with interviewing facilities.
- The service is free to employers.
2.5 You may need to use employment agencies and consultants.
Agencies may specialise in anything from van drivers to research scientists.
Good agencies will have a wide range of suitable candidates registered with them and provide a fast and effective service.
- Specify clearly what you are looking for.
- Most agencies offer temporary and permanent staff.
- Many will test for personality and skills (eg use of particular software packages) and carry out interviews to select a short list, or a suitable person.
- Recruitment agency costs can be high - sometimes up to 25 per cent of the employee's first year's salary.
- Check any agreement you sign.
- If an employee is unsatisfactory, the agency should find you a replacement, free of charge.
- Most agencies will give a refund if the employee leaves within 12 weeks.
Advertising is the most common method of finding job applicants.
3.1 Include all the basic information.
- A description of the job, including the employer's name and location.
- What the pay and benefits will be. It is fine to just state 'good package'.
- What experience, skills and qualifications are required - and what are desirable.
- How to apply and the closing date.
3.2 Sell the job, by stating:
- What makes the work interesting.
- What the promotion prospects are.
- What training will be given.
- What makes your business so good - eg expanding, financially sound, good working environment.
Make the ad less impersonal by using 'we', instead of 'the company', and 'you', instead of 'applicants'.
3.3 Choose the right newspaper, magazine, website or other advertising medium.
- Local papers are best for local employees.
- Special recruitment sections in trade magazines and national newspapers will help you find skilled staff.
Many papers run recruitment ads for specialists in different fields on particular days of the week.
4.1 Tell applicants to apply in a way that will give you the information you need.
- A cover letter plus CV is usually sufficient.
- You can design your own application form to ensure you get the right information.
4.2 Select the most promising applicants.
- Rank them in order, starting with the best.
- Decide how many are worth interviewing and send polite rejection letters to the rest.
4.3 Arrange a time and place to interview the selected applicants.
- Interview as soon as possible, in small batches.
This makes it easier to compare everyone.
- Consider offering some evening interviews.
A good interview will allow you to confirm the facts given in the application, assess the candidate's personality and suitability, and sell the idea of your job.
5.1 Preparation is important.
- List the questions you want to ask.
How does the candidate compare with what you are looking for? What essential information needs checking? Arrange to see any relevant documents or certificates.
- Be ready to answer questions on subjects like pay, benefits, starting date, hours of work, promotion prospects and holidays.
5.2 Make full use of the interview to find out what you need to know.
- Start by putting the candidate at ease.
- Tell the candidate about your business and the job.
Then ask a question that lets the candidate do the talking.
- Be prepared to wait in silence for the candidate to speak.
- Use open questions that do not lead to a simple 'yes' or 'no'.
- Do not prompt the candidate to give you the answer you want.
For example, "Are you reliable?" will be answered "Yes." You learn nothing.
- If the candidate seems evasive on any subject, probe a little deeper.
- Avoid questions that are discriminatory - for example, about health, age, marital status, religion or belief.
- Suspend judgement until the end of the interview.
- Ask if the candidate has any questions.
- Check the candidate understands what is involved. Ask what appeals about the job.
- Check the candidate would take the job if offered it, and what notice is necessary.
If certain skills are essential for the job (eg computer skills or cold calling), always set up a practical test as well.
5.3 Evaluate the candidate - against the criteria (see 1.3) and then in comparison with the other applicants.
- Make your notes right after the interview (see 5.4).
- As well as general comments, give marks for each characteristic you are looking for.
For example, presentation skills 3/10, IT literacy 10/10, and so on.
- Compare the candidate with what you need, not with yourself.
- Assess how the candidate would fit in.
5.4 Carefully consider each candidate and take care with notes you take during interviews.
Under the Data Protection Act candidates can ask to see any notes you have taken.
6.1 Take up references for the best candidate.
- Before checking references with a current employer, confirm you have the applicant's permission.
- Ask previous and current employers for evidence to support claims made by the candidates.
6.2 Send an offer letter.
- State the pay and benefits you are offering and when the salary will be reviewed.
- Specify any conditions.
For example, subject to a trial period, satisfactory references or after a medical (for physically demanding work).
- Indicate how much time the candidate has to decide whether to accept.
- Say when the job starts.
6.3 When the offer is accepted, it becomes the basis of the contract of employment.
6.4 Write courteous rejection letters to all the unsuccessful candidates as soon as possible.
- Thank them for their interest in the job.
- If you have to reject some good people, keep their details in case you need to find more employees quickly. Under the Data Protection Act it is best practice not to keep these details for longer than necessary.
6.5 If none of the shortlisted candidates meets your requirements, you must start again.
- Try to identify what went wrong.
- Do you need to offer more money to attract a higher quality of applicant, or do you need to advertise differently?
Do not throw away all your good work now by forgetting about your new employee.
7.1 Plan a warm welcome.
- Make sure other people know when someone new is joining your company.
- Show your new employee round and introduce his or her new colleagues.
- Arrange an induction sequence that allows time in different parts of the business.
7.2 Set up any training that is needed.
- Who is going to explain what to the new employee?
7.3 Arrange periodic reviews.
- Schedule regular meetings to discuss the new employee's progress, problems and plans.