Learning how to hire right

Peter Switzer

Small business employers have a big problem. They can't find the workers that they want. This is a problem right now and it’s been that way for several years, as some intensive research shows.

To make matters worse, two out of three bosses don't even know how to hire properly.

Research shows that businesses which recruit smarter tend to grow faster. A report from accounting body CPA Australia and the Monash University's Family and Small Business Research Unit (FSBRU)* found the human resource management (HRM) practices used by small businesses — and in particular their hiring methods — were unprofessional.

It’s all about the process

Very few small businesses take a systematic approach to recruiting, training or developing staff.

CPA Australia says that small employers don’t align their HRM practices with their overall business strategy. Unless they formalise their HRM practices and include them as part of their business plan, they are less likely to reap the benefits of growth.

Only a few years ago, a damning report on the competency of bosses found 65% of small businesses have little structure or formality in employment practices. While there has been progress on business plans with more than 54.3% using formal plans, only one in five had a staffing plan with a budget.

The research, which examined 400 businesses, showed small business employers recruit using unimaginative, informal and ad hoc methods such as word of mouth or newspaper advertisements. Rowena Barrett, the director of the FSBRU, believes these methods are easy to use and convenient but not always effective in reaching a larger pool of suitable recruits and finding the right employee.

Other mistakes included interviewing candidates without using a written.

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