Hiring employees is an art. Every company in the world, including the best, are looking for ways to solve the staffing and recruitment problem. For small businesses, hiring employees can be an incredibly difficult task.
To illustrate, try and guess how much it costs to hire waiters, cooks and servers at a small restaurant.
What is the largest single item in the food marketing bill?
Labour. Hiring employees and part-timers can be the single biggest cost segment for a restaurant.
Some marketing textbooks suggest labour costs make up 46% of the bill. The Cheesecake Factory, an American chain with 200+ restaurants, reported labour costs of 35-36% in 2018. Upserve reports that labour costs should be 20-30%, while other sources prescribe that Prime Costs should be 60% of total sales — that is, the fixed outlay for both labour and food.
When you consider that restaurant profit margins are in the ball park of 6%, you’ll understand why labour costs are huge considerations for restaurant owners — and other small businesses.
What to consider when hiring employees for small businesses?
Hiring and managing employees is one of the hairiest, most frustrating parts of being a small business owner, and part of it is how much it costs. But it can also be one of the most fulfilling things, if you do it right. So let’s talk about it.
“Great employees are not born, they are developed in a business atmosphere where training is stressed, individuality is encouraged and personalities are respected. Word travels about the work environment in all sizes of stores. The key to recruiting quality employees is promoting and possessing a positive work environment no matter how large or small you are.” – Anne M. Obarski, customer service expert
1. Hire with purpose – write clear, precise job descriptions
Image: Reddit
You’re busy, but you cannot afford to be vague when it comes to hiring employees. You’re asking somebody to spend their time working for you – you want to make sure that it’s worthwhile for everybody involved.
Before you even hire someone, be clear about what exactly the job is. What are you going to be hiring people to do? What tasks need to get done? What are the specific demands of the job? What are the commitments and obligations? What are the expectations?
Hiring is something you never want to compromise on, if you can. In particular, you want to make sure that whoever you hire fits well in the culture of your company. (This can be ensured by making use of the best ATS for small businesses.) An unskilled worker can be trained, but one with a poor attitude will be toxic for the rest of your working environment.
2. Make training a priority – or you’ll have to keep hiring
Image: LinkedIn
Once you’ve hired somebody decent, you can kick back and let them run the show, right?
Of course not.
It’s unlikely that you’re going to find somebody who’s able to perfectly perform all of the tasks that you require of them. Anybody who’s so amazingly qualified for your role is probably looking for something bigger and better.
So you’re going to have to train them. You need to spend time and energy coaching your employees to get better at their jobs. As a minimum, you should have an ‘onboarding’ process where you walk them through everything they’ll have to do.
3. Keep your staff motivated – or else
Image: Dilbert
Once you have employees, your business now becomes ‘a place to work’. And whatever your business goals are, you’ll want your business to be a good place to work.
You can vary in terms of how obsessive and particular you want to be about this, but you want to be on the positive side of this. The moment your place becomes a bad place to work, the whole operation begins to get toxic. Your employees are less likely to treat your customers well. The converse is also true – a great place to work lifts everybody’s spirits, motivates employees and may even help with hiring.
(Editor’s Note: That’s why we maintain a ReferralCandy/CandyBar culture blog, Bytes of Candy, purely for employee contributions & content.)
You want to develop a practice of recognizing good work. Thank them when they do things right. Listen to their feedback.
Creating a great work environment is something to be proud about as an end in itself. And it has so many benefits. Employees will want to refer their friends to work at your store. They will treat your customers better.
You hire the best people you can possibly find. Then it’s up to you to create an environment where great people decide to stay and invest their time.
― Rich Lesser
Small business success starts with hiring practices
Let us know what you think about hiring in the comments below.
As an additional resource, you may enjoy our guide to restaurant interview questions, or peek at our guide on best small business books for the best book on hiring for small businesses.
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