Recruiting describes the processes companies use to find qualified candidates to fill job openings. Some types of recruiting, such as college recruiting and networking, also serve to bolster the company's image among certain groups of potential employees. Effective recruiting is particularly important for small businesses, since finding and hiring talented employees is a key ingredient for growth. The Small Business Association publication Human Resources Management outlines three main steps in the recruiting process: assessing future personnel needs; developing a detailed description of the position to be filled and a corresponding profile of the person needed to fill it; and selecting the sources that will yield the best possible candidates. Throughout the recruiting process, small business owners must remain aware of the legal issues involved in hiring employees.

Assessing future personnel needs involves taking a close look at the company's expected workload, the capabilities of the current work force, the anticipated turnover, and the available labor supply. How the company stands in relation to these factors will help management to forecast future employment needs and develop a strategy to meet them. When a need has been identified, the next step is to perform a job analysis to collect information on all the tasks involved in the position and the types of skills, knowledge, and abilities required to do them. The job analysis leads directly to a job description, which defines all the duties and responsibilities of the position to be filled. Finally, the small business owner can use the job description to prepare a job specification—a written description of the person needed to fill the position. The job specification is the basis for recruiting, as it provides the standard against which applicants can be measured.

Next comes the actual search for candidates. In his book Hiring Winners, Richard J. Pinsker recommends that companies begin the search process as early as possible in order to generate a long list of candidates from which to choose. Even in the early stages of the hiring process, it is vital to consider the legal environment. The Civil Rights Act of 1964 and the Equal Employment Act of 1972 forbid discrimination based on race, color, national origin, sex, age, disability, veteran status, or religion. Therefore, it is illegal for recruiters to inquire about an applicant's age, marital status, children, nationality, or church, and employers must be careful to avoid any mention of such issues in employment ads. It is also illegal to require candidates to submit a picture along with their applications.


There are a wide variety of sources available for small business owners to use in finding qualified applicants to fill job openings. Some of the most common sources include:

* Current employees. Promoting someone from within the company helps keep employee morale high, but small business owners should take this approach only if the person meets the job specifications. In order to facilitate hiring from within, many companies maintain a skills bank on current employees, post notices about job openings and encourage employees to apply, and incorporate apprenticeship programs into employee training. Hiring from within may be difficult when there is a pressing need to fill a position and the required expertise does not exist in-house. Furthermore, Pinsker noted that it is a good idea for companies to fill at least 20 percent of job openings from outside, because outsiders tend to bring new ideas.
* Employee referrals. Many job openings in small businesses are best publicized by employees via word of mouth. Most employees will only recommend applicants with proven abilities. New hires can be an especially good source of referrals.
* Networking. Networking—developing a wide range of personal contacts within the industry and community—can provide a number of benefits to small business owners, including job candidates or referrals. Sources of networking connections include trade shows, associations, committee memberships, and charity functions. Pinsker suggests that business owners also encourage their employees to develop their own networks of contacts and to contribute names to the company list.
* Unsolicited applications. Most businesses receive unsolicited resumes and job applications when they are not hiring. All applicants should be treated courteously, but the materials submitted by qualified candidates should be kept on file for future reference.
* Schools and colleges. Depending on the type of position to be filled, high schools, trade and vocational schools, colleges, and universities can be good sources of candidates. Students are particularly good candidates for part-time positions or those in which prior experience is not needed. College recruiting is generally handled through a placement office. Companies usually send a representative to campus twice per year to meet with and interview students. Pinsker emphasizes that business owners should consider college recruiting as an opportunity to promote their company to both students and faculty.
* Alumni placement offices. Many colleges keep resumes on file for alumni who are seeking job or career changes. Alumni files can be a good source for companies seeking educated candidates with more work experience than recent graduates generally have.
* Job fairs. Job fairs can be useful for companies that need to hire several employees in a given specialty, such as engineering or computer programming. At a job fair, companies usually pay a booth fee and send representatives to collect resumes and pre-screen candidates. Like college recruiting, job fairs provide small businesses with an opportunity to promote themselves to potential hires.
* Associations. Most trade associations maintain a central clearinghouse of candidates who wish to change jobs. Trade shows, conventions, and seminars sponsored by associations can also provide valuable opportunities to meet potential employees.
* Public employment offices. The U.S. Department of Labor offers job placement services to some categories of workers free of charge. In many cases, public employment offices will provide small businesses with lists of pre-screened applicants for a certain opening.
* Private employment agencies. These organizations match job seekers with potential employers for a fee, usually paid by the employer once a candidate is hired.
* Outplacement agencies. Outplacement firms are similar to private employment agencies, but their fees are usually paid by former employers who have laid off or downsized workers. Small businesses with job openings can usually be placed on a mailing list free of charge to receive information on candidates who need a new job.
* Temporary services. These firms offer employees to fill a wide range of needs, from clerical to manufacturing to professional services. Hiring temporary employees can be a valuable method for companies to screen people before hiring them on a permanent basis.
* Advertising. Employment advertising includes everything from a "help wanted" sign in the window, to print ads in local newspapers or specialized publications like trade magazines, to classified ads on cable television or the Internet. For a small business, publicizing the fact that job openings exist is key to gaining access to a pool of applicants. Advertising can be expensive, however, so it is important to evaluate media carefully. It may be helpful to ask other business owners about their experiences advertising in various media. Small business owners must also be sure that their employment ads comply with equal opportunity employment laws and do not expose the company to charges of discriminatory hiring practices. Ads should concentrate on the skills and responsibilities of the position, rather than on the traits of applicants. In print ads, it is important to avoid nuances that suggest a certain gender or age of applicant is preferred. For example, the word "salesman" should be replaced with "salesperson," "waitress" should be changed to "wait staff," and "young" should be deleted in favor of "energetic." In addition, the recruiter should make certain that all the qualifications listed are actually necessary for effective performance of the job.
* Internet job banks. There are a number of recruiting sites on the Internet that allow employers to screen candidates online. The Internet can be a valuable recruiting tool, particularly in terms of locating potential employees. Experts recommend that employers use several of the hundreds of available sites in order to find the ones that best meet their needs.

Other possible sources of recruiting leads include bankers, accountants, consultants, customers, competitors, and other professionals with whom the small business has regular contact. If the recruiting process is successful, the small business owner will have a substantial list of qualified candidates from which to select the one person who best matches the job specifications. The selection should be made through a formal screening process that may include an employment application, employment tests, and a personal interview. Each step in the process serves to narrow the field of candidates until a final selection can be made.

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