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Managing Recruitment for SMEs | NatWest Rapid Cash

BY Rapid Cash
02 Mar 2022

Managing Recruitment for SMEs

Many small business owners in the UK will agree that the most important ingredient in a recipe for SME success is people. There are various reasons for this, including that:

  • Your business needs employees with the right hard and soft skills to get the job done.
  • Industry experience can be useful in navigating SME challenges.
  • Or, that motivation, ambition, and drive are vital qualities in any business environment.

But getting the right people to plug the gap in your team isn’t always so easy. There are questions around how to find employee prospects with the right talents and temperaments, how to quantitively vet these prospects to check they tick all the boxes, and ultimately how to go about conducting your assessment of whether they’re the right fit for you.

There’s even an entire industry; the recruitment industry, built around facilitating this process. And that’s exactly what we’ll be exploring today, as we provide some tips on how small business owners can approach recruitment without breaking the bank.

What is recruitment?

Firstly, though, what exactly do we mean by ‘recruitment’? Recruitment is simply the process of hiring people with the right qualifications and experience to fill vacant job roles within a business.

It’s something that can be managed by an individual, for example a HR lead within an SME, or by an entire external organisation (i.e., a recruitment agency) running a sophisticated process that involves analysing and testing potential job candidates before recommending them for certain job roles.

The recruitment process: how does it work?

Let’s take a look at the key steps in the recruitment process that are relevant to virtually every SME – whether using recruitment agency or managing the process internally.

1. Finding potential candidates for a role

Depending on the industry and sector within which you operate, you may struggle to find the right talent to fill your vacancies, so understanding the major platforms through which you can identify prospective employees is key. These include:

- Jobs boards. Companies such as indeed.com and reed.com host online jobs boards through which employers can list vacancies, while employees can upload their CV and personal information. Employees can also opt into notifications for when jobs are posted that are relevant to their experience and interests. - LinkedIn. If you’re looking for experts within a specific industry, LinkedIn is a great way to make connections with other professionals and is also widely used for recruitment. Recruiters working for agencies will often look to contact professionals (often without having a prior connection) with news of jobs that could be relevant to them. - Google jobs. While this is essentially another style of jobs board, we feel it deserves a special mention given it returns a very specific type of search result. Through Google jobs, job seekers can see new listings posted in their area. - Direct applications. Perhaps the best way to receive a job application as an employer is via a direct application, which may indicate that the applicant has a specific interest in working for your business. With direct applications, employers can avoid paying any fees that are commonly associated with other recruitment channels or mediums.

If you’re managing recruitment internally (which we’ll get onto shortly), you can browse through these platforms to find candidates. Or if you choose to purchase the services of a recruiter, they will likely utilise a similar set of methods while also building up a database of contacts that are either employed or searching for work within a specific sector.

2. The recruitment selection process

Let’s say you’ve narrowed down your search into a list of 10 or 15 eligible employees for the role you’re currently advertising. How, then, do you go about trimming down that list to a point where it’s practical to start interviews? Then, how do you choose one candidate for the role?

The main steps could be to:

- Carefully examine CVs to find the most compatible candidates. You’ll have already had to consider whether people actually have the experience and qualifications you listed as essential, and so the next step is to qualitatively analyse their experience and achievements to find a person you feel could make a good contribution to your small business. - Design and begin your interview process. If you’re hiring for a digital role that’s heavily centred on pitching for contracts face-to-face, you’ll want to test your applicant’s presentation skills, or for a copywriting role it could be useful to set a written assessment. The format of your interview should sensibly match the role you’re hiring for. Having multiple interview stages can help you weed out the candidates that aren’t likely to be a good fit, while saving time. - Choose a candidate who matches your businesses and teams’ personalities if possible. Beyond ensuring they tick the obvious boxes for the job, ensuring that you’re creatively aligned, and that you’ll be able to facilitate their development goals could make for a good partnership.

3. Negotiation of terms

Under certain circumstances, you may want to negotiate employee contracts within a final stage interview. For the majority of businesses, however, a separate call is often required after the interview process has concluded, in which the successful candidate is formally offered the job role.

In this meeting, you need to make clear:

  • The contract duration.
  • The agreed salary – whether on an hourly or annual basis.

You can follow up later with an email to provide an overview of benefits, and relevant terms and conditions such as the details of your pension scheme.

Stage 1 of the recruitment process we’ve outlined (finding candidates) is often the most challenging, and that’s exactly the type of work you may look to outsource to an external recruitment agency. Let’s examine how this can differ to handling it yourself.

Internal recruitment

So, what is internal recruitment? It’s all about filling vacancies within your organisation using employees that already work for you. For example, promoting a current employee to a more senior role with larger responsibilities, or moving a capable employee from one team to another.

It's important to avoid discrimination while you’re recruiting, so ensuring that you have a set of written rules that describe how you advertise that and who you advertise to can make things easier. For example, if you’re advertising jobs internally and externally, that needs to be true for all roles that become available else you may risk breaking anti-discrimination laws.

Naturally, there are a lot of advantages associated with internal recruitment. Besides requiring less time investment, your new team member will likely have already built a rapport with members of the business and could potentially face less of a steep learning curve than someone who is entirely new to the company and its operations.

However, also consider the disadvantages of internal recruitment. You limit yourself to a significantly smaller talent pool than if you were to go to open market and embrace all prospective employees. In addition, moving an employee internally may result in creating a new vacancy while filling a current one- meaning there’s some complex resource juggling to be done.

External recruitment

In an external recruitment model, an SME will enlist a recruitment agency, or an external freelance recruiter, to manage the process of identifying and connecting with prospective employees. Having agreed a payment structure with the recruiter, staff within the SME can simply wait for the recruiter to go through the motions we’ve already outlined.

When the recruiter has connected with enough suitable applicants for the role in question, the small business can jump back into the process by arranging interviews that hopefully result in a new, valuable employee joining the team.

Naturally, the recruiter will take a fee for their work. While the exact fee structure can vary from agency to agency, you can expect a recruiter to ask for around 15 to 20 percent of your new employee’s annual salary as a flat fee. This is often only paid if they pass their probation, or stay at the company for a certain length of time.

Recruitment fees can become a substantial business cost, so it’s important to conduct a thorough cost-benefit analysis when determining whether external or internal recruitment is right for your small business.

How could Rapid Cash help?

At NatWest Rapid Cash, we understand that cash flow is key to SME success. If you have access to adequate cash at the right time, you could afford to hire a recruitment agency or make a vital promotion.

We specialise in helping with cash flow management. If approved, our innovative invoice finance solution connects with your digital accountancy package, then allows you to choose which of your outstanding invoices you’d like to borrow against. From there, you can receive a cash advance that allows you to mobilise your money without having to wait 30-120 days for the invoice to be paid. If this sounds like a solution that could benefit your business, read more about our product.

Eligibility

To be eligible for Rapid Cash you must be trading for more than 6 months, have an annual turnover of at least £100k and either be a Limited Company or Limited Liability Partnership in England and Wales. Additionally, you need to invoice other businesses and use one of the following digital accounting software: Xero, Quickbooks, Sage 50, Kashflow, FreeAgent and Netsuite.

Security and guarantee required. Product fees may apply.

Rapid Cash

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