Small businesses make up 99.9 percent of all U.S. employer firms, comprising the lion’s share of the U.S. economy. They also make up nearly half of all private sector employment. Even so, small businesses face different time and budgetary challenges than larger companies when it comes to recruiting, hiring and outsourcing labor. But small business hiring also has some advantages:

  • less bureaucracy to recruit and hire employees,
  • better management to employee relationships, creating a family feeling, and
  • smaller businesses offer more flexibility and opportunity for growth.

Smaller companies may not have as many job openings as larger enterprises, but the need to find and retain top talent is equally important.

The Small Business Administration’s (SBA) Office of Advocacy “defines a small business as an independent business having fewer than 500 employees.” According to the SBA report, about 8 out of 10 of America’s small companies have no employees. That leaves about 20 percent that make up the 8.3 million new private sector jobs.

Recruitment or Hire?

Hiring for small businesses can get expensive. You not only have measurable, direct recruiting, hiring and training costs; but also projected, indirect costs that are more difficult to quantify like time lost on poor recruitment or hiring strategies. Making mistakes in the hiring process eats into not only the HR budget but wastes time and resources. Your social media platforms and company website must be up-to-date and easy to navigate.

Don’t Settle to Fill a Void

Today’s collaborative businesses can’t afford to hire simply out of need. You need talent–a pool of talent. That’s where outsourcing labor with recruitment lies. Hiring falls within the recruitment process. Recruitment is vetting, solicitation, and benchmarking for the talent needs of your company. Small business hiring is often a time-consuming process that entails finding which talent fits your company’s internal job opening.

The Society for Human Resource Management (SHRM) provides an annual Talent Acquisition Benchmarking Report ; that lists tables customized to recruitment, selection, and quality of hire.

The Average Cost-to-Hire

The average cost-to-hire a non-executive employee ranges from $500 to an average of $4,425. It takes an average of 20 to 36 days to fill a job, depending on the size of your business and the industry, says the SBA Advocacy report.

Eighty to 90 percent of companies find their employees through their company website and employee referrals. The tried-and-true resume, work sample, testing, interview and references still make up the bulk of most small business’s hiring process. Three out of 4 small businesses, however, do not hire through automated resume prescreening resources like Internet resume sites.

Build Your Brand to Market to the Best Talent

Therefore, it’s especially important to build your company’s brand so you can market to today’s competitive talent pool. Present your company as the company to work for so you won’t lose the most viable candidates. If you’re not writing good job descriptions and using social media to get your name out, then you’re missing out as the best employees get snatched up quickly.

Outsourcing Labor & Human Resources

Outsourcing is a great way to get recruiting, hiring for your small business and HR administrative work done without all of the overhead. Selectively outsourcing tasks that your HR employees don’t have time for is a trend that can open them up to complete other projects and save your company time and money.

So, when do you need to outsource? New projects, recruitment, hiring, back-end work, day-to-day grunt work, phone work that bogs down human resources’ day-to-day business. Pricing can run from under $50 to around $1,500 monthly to farm out work. This can be cost-effective, even for a small business.

  • You don’t have to pay employee benefits like health insurance and vacations.
  • Subject matter experts may be more knowledgeable than smaller business HR staff

When hiring for your small business, if you outsource to an HR firm, you will want references, know how they will charge and on what terms that they will bill you for payment. Since the advent of cloud computing, subcontractors can work from anywhere in the world, although local is always best for many small businesses. Virtual assistants are also providing key ways to farm out administrative grunt work and labor.

Whether you outsource labor through a Professional Employer Organization (PEO), or a general or specialized HR firm, outsourcing can keep recruiting and small business hiring costs manageable, open your company to an entirely new talent pool, and allow you to focus on collaborative projects to grow your business.

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