Hiring new employees is a necessary aspect of managing any business, especially for growing companies. This is an especially important process for small businesses, where each employee consists a bigger part of the firm. SMEs must carefully approach the hiring process in order to meet their workflow needs and grow sustainably.
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Design a Concrete Plan
SMEs in Singapore face a tight job market, with an unemployment rate of 2.2% and 87 job vacancies per 100 unemployed individuals. These figures indicate a competitive market for employers, which requires businesses to be strategic in their hiring process. As your SME considers its growth, it is important that it has a clear hiring plan.
First, you should examine which task, project or department requires additional employees. Doing so should help you decide how many additional employees are necessary for the work and what type of qualifications they need to possess. Once you have defined the roles that you would like to fill, you should add the job postings to various career sites as well as reaching out to coworkers, industry colleagues, and friends to let them know that you are hiring.
Develop a Thoughtful Hiring Process
It is useful to design a process that identifies key characteristics that will determine whether each candidate has the ability to succeed and to identify any red flags of a potentially problematic employee. This process may include a multi-stage interview process.
First and foremost, your interview process should test the candidates' ability to do the job. To understand a candidates' capability, it is helpful to review their resume and ask technical questions that are related to the job itself. It is important to ask probing questions about candidates' previous job experience. If applicable, you may choose to give your candidates an in-person or take-home test to test specific skills like problem solving, writing or coding. To maintain consistency and the ability to differentiate between candidates, it is important to ask the same type of questions to each applicant and take notes during or soon after each interview. This will allow you to evaluate applicants more objectively and improve your interview process over time.
Also, in order to mitigate risk, it is helpful to reach out to candidates' former employers as references. It is helpful to ask about a candidate's strengths, but you should not underestimate the value of asking about their weaknesses. Often, you can learn more about a candidate's abilities from how they face challenges and failures. Any information that gives you a better understanding of how the candidates would fare as employees can be useful. Further, it is helpful to have several employees interview each candidate, and if possible interact with the candidates outside of the work setting (e.g. interview lunch). This will help your organization gain a more broad understanding of the candidates.
Prepare for The Costs
Hiring can be expensive and it is essential that your SME knows how it will cover the additional costs of new employees. It is important to research and understand the average salary for the roles that you need to fill. Additionally, you will need to consider the cost and benefits of the hire. Finally, as your business continues to grow, you may need to expand your operations beyond its current premises.
How will your business pay for all of these costs? If you have excess revenue or cash to cover the cost of a new employee, you may be fine. However, many SMEs do not have excess funds for new employees. Don't panic if your business falls into this category; you have options. First, consider alternatives to adding a full-time employee. Depending on the role you are trying to fill, you may be able to hire a part-time employee, an intern or a freelancer. These positions may provide adequate substitutes to bringing on an additional employee. If you truly need an additional employee, or several, and cannot afford to pay them immediately, you might consider some financing options for your for your SME.
There are many different financing options for small businesses in Singapore. Traditional bank loans typically offer the lowest interest rates, but studies indicate that 4 in 5 SMEs do not qualify for business loans from banks due to their stringent eligibility requirements. Luckily, there are alternative financing options, including P2P/Crowdfunding financing. Through P2P/Crowdfunding lending, SMEs can receive customisable financing options from pools of willing investors. Because SMEs do not typically have the strongest financial and operational track records, there is added investing risk and interest rates are subsequently higher. However, these alternative financing methods give small businesses access to significant funding amounts within a few business days.