Many small businesses struggle to grow because they can’t find the right staff. But there are solutions for those prepared to think differently.
Anthony Prior, owner of Bagelman – a four-shop sandwich chain in Brighton – is, as with many other successful small firms, keen to expand. Bagelman has doubled in size in the past three years, but aspiration isn’t a problem for Mr Prior. Instead, it’s the availability of people – good people. “Each new store needs eight to 10 staff,” he says. “People talk about SMEs fighting for graduates but even in the lower-skilled first-job market there’s massive competition for talent.”
Statistics bear this problem out. Last year a survey by the UK Commission for Employment and Skills found the density of skills shortage vacancies was much greater among small firms (29 per cent) than large ones (18 per cent). It also found 54 per cent of firms with fewer than five employees said difficulty recruiting people had affected them financially by causing a loss in business. With school/college/university leavers drawn to familiar high street names, small businesses can often find it difficult to get a look in.
“For some, there’s a perception small businesses are just that – small, not sexy enough, and without the resources for development that larger, more well known businesses have,” says recruiter Rob Blythe. As co-founder of Instant Impact, which specifically places graduates (10 per cent of whom are Oxbridge-educated) with small firms and start-ups, he says firms just need to be more creative.
“Small firms now have a big opportunity,” he says. “Since the financial crash, jobseekers are realising big isn’t always best, and that smaller businesses can offer a better culture, have a community spirit, and can give them more responsibility at a younger age.”
But, he adds: “they must decide and promote what makes them ‘them’. This could be providing innovative perks – such as ‘free beer Fridays’, family barbecues, volunteering schemes, flexible working, training or career development. It’s about developing their brand.”
The values of small firms can be appealing, says Mike Cherry, National Chairman of FSB.
“Huge, faceless corporations intimidate a lot of young, talented people. Small businesses are the opposite of this – they are run by people who reject the corporate model. Smart employers see the value of employing diverse, talented people who bring their unique perspectives and life experiences,” he says.
To access a pool of untapped talent, small firms need to expand their reach by creating a social media presence, including posting on LinkedIn, says Mr Prior. “Jobs boards weren’t working for us, so we decided to work on our proposition. Through the Eventbright website (where people search for experiences), we’ve started advertising sandwich workshops where people can come and experience who we are, while we can see how they work with people,” he says.
“It’s also where we can share things unique to us, such as our culture, which includes our ‘FutureYou Foundation’ – where 1 per cent of revenues are invested in projects to help people reach their potential. When people hear about this, they become interested, because they can see our purpose isn’t just about profit without developing people, too.”
Think outside the norm
Improving recruitment by reaching new audiences means thinking as broadly as possible about talent. Hiring hard-to-find-groups, such as disabled people, older and former Armed Forces personnel have all been proved to return above-average length of service, and a wider range of skillsets. Various charities will assist firms to connect with groups they feel are overlooked – including Nacro (ex-offenders); Action For Addiction (recovering addicts); Crisis (the homeless charity); the Prince’s Trust (which supports disadvantaged young people, such as care leavers); and Gingerbread (which helps single parents find work).
FSB member Rajan Amin – owner of insurance services firm Coversure, says he turned to apprentices after finding it hard to hold on to staff. “At times it’s felt like something of a revolving door, trying to replace good talent that leaves,” he says, even though he says the business is very competitive with pay and benefits, giving above statutory leave, plus birthday days off. “Now we’ve got someone who’ll be taking professional exams – since the start of 2017 he’s been in full-time employment,” he says.
Nothing guarantees good people, but what does at least stand firms in good stead is being different. A few years ago, small US games designer Red 5 Studios famously researched 100 ‘dream’ candidates – all gainfully employed elsewhere – and sent each of them an iPod with a pre-recorded message from Chief Executive Mark Kerr inviting them to apply. Ninety out of the 100 recipients responded, and three quit their jobs to join the firm. Not bad for a simple idea.
One idea that many small firms – particularly start-ups – could try is offering equity as a recruiting tool. Those already doing this include BOL, the healthy-eating start-up launched in 2015 by the former Commercial Director for Innocent, Paul Brown. For BOL, this tactic helped to attract talent from L’Oréal, Procter & Gamble and Unilever. Help with creating shares schemes for staff is available from organisations such as the Employee Share Ownership Centre (Esop).
A much easier initiative is to offer bonuses to existing staff if they suggest people in their network likely to ‘fit’ the company. If these recruits stay, the staff who have suggested them can pocket upwards of £500. It’s a cost, but it’s cheaper than paying a recruitment agency, and existing staff can be surprisingly accurate at picking people they think will fit the company culture.
Firms need to get better at pushing their virtues, believes Dominic Phipps, Managing Consultant at Brand Recruitment – recently named best SME marketing recruitment agency at the Marketing and Digital Recruitment Awards 2016. “Small firms need to shout about what they can offer that candidates want – often, this is the ability to grow,” he says. “Having lots of success stories helps, and creating a relationship with local press is a must.”
However, Mr Phipps advises flexibility. “Small firms tend to look for the ‘perfect’ candidate,” he says. “They need to accept they won’t always get this, but can often get someone who will grow with them if they feel they’re being invested in. This means being prepared to tailor positions around their current skills to engage them, and make working for the firm everything they want.”