Innovation and enterprise blog

04 March 2015

Hiring – The Hardest Choice

When is it a good time to employ someone for your new and growing business? This can be one of the most agonising decisions to make as a business owner and it can feel a risk that outweighs the reward.

In the last three years we’ve supported over 200 businesses on our Innovating for Growth programme at the British Library, and as a Relationship Manager I’ve had the privilege of seeing first-hand how this key decision can be the very thing that allows the business to grow to the next stage.

Why Employ?

There are only 24 hours in a day and we need a few of those hours to sleep, not least other commitments like family, friendships and dare I say some time to enjoy life outside the business! I’ve met a good number of super-heroes that some how juggle the lot, but the reality is that with so many spinning plates, one of them will eventually drop. Just hope that one of those plates doesn’t break the business itself!

So if you want the business to grow beyond being an artisan/owner, it’ll be you that needs to recruit.

Strategy advisor for Innovating for Growth, Uday Thakkar believes that what holds people back from employing people is a perception of too much risk.

“Is employing someone a cost or an investment? Your language often guides your perception of risk. An employee frees you to do more. An employee can do things better in areas where you are uncomfortable or unskilled. They assist the business to grow and increase profits. They should be regarded as an investment.”

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Uday Thakkar

Who to Employ?

Writing a good job description is of course vital. It’s the means by which you attract the right candidates and it serves as defining what the job is all about by clearly outlining the required qualifications, experience and abilities you expect from the jobholder. This acts as a safeguard if you find a recruit doesn’t fulfill expectations too.

But it’s not always possible to get recruitment right first time because it’s not just finding a good employee; it’s finding one that fits the values and behaviours of the company itself. Not finding that match can take away time and energy rather than add it. By having a clear expectation of the role means you can measure performance and take action appropriately if needed.

Terry Morgan, Director of Debaere, a business who has been on Innovating for Growth, acknowledges this and says recruiting can be time consuming, especially if applicants aren’t necessarily committed. He has some hard earned advice.

“When we go through this process we try to provide as much information as we can on the style of business we are, the type of work expected and the general conditions of employment.”

But there is an up-side.  “When we do get a new starter it does work out for the better. It is good to add new blood to the mix of employees and sometimes they bring new skills or ideas that help the business grow. Patience is definitely required in recruiting and I would suggest using an agency for senior staff as they tend to do all the vetting for you.”

 

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Debaere

Richard Marshall, owner of Pall Mall Barbers, has grown his business from 1 employee in 2005 to 25 employees in ten years, expanding to three locations in central London with a fourth opening up soon in Liverpool Street. Richard knows all about the difficulties and benefits too and has some sage advice around selecting the right people.

Crucial for him are employees with the right attitude. “Choosing the right person pays dividends and will multiply the time you have.” 

How to Employ?

Richard has found that having a robust selection process really helps. He advertises, receives CVs, will find out more about the applicant by phone and then interviews them face to face. By then he’s satisfied he’s got a good match for the business. Richard offers more advice around managing recruitment, “wherever possible outsource. I’ve outsourced my HR functions to a company and receive proper advice on issues if any come up”. This gives Richard the time to build and expand the business which of course helps to safeguard the very jobs he’s created.

 

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Pall Mall Barbers

Getting it right with the right advice

I mentioned the risk of no return at the outset. Of course taking someone on is not without its risks but seeking out the right advice at the right time will save you hassle and money in the long run.

Uday again has a view on this;

“Most employees are taken on with at least a three month probation period. If someone isn’t performing or is good at disguising major shortcomings, despite CV reviews and interviews, we all reckon that within a few days we can make a pretty good judgment as to whether the person will fit in or not. So the maximum risk to you is 3 months – that is £9,000 even if you are reticent about showing them the door earlier. If you are brave (and you have to be to be a business owner) then you should be dealing with poor performers immediately. The cost is then likely to be a month or less – say £3,000. On the other hand a good employee will rapidly cover their “cost” and generate profits.”

There is, of course, help along the way. As a business owner you needn’t take the plunge in isolation. Stay connected with other businesses your size, talk to other business owners who have done what you’re doing. Where needed seek out legal help or HR advice.

The recent Business is Great campaign also provides some helpful guidance around what you need to know.

The Business & IP Centre already has a solid track record of supporting employment for our business users. Based on a 2012 survey we’ve helped created an additional 3,345 jobs, while on the Innovating for Growth programme each business on average has created at least one job and helped to secure their own sustainability. This allows for even more employment medium to long term. A good place to start in the Centre is to check out the COBRA business advice database.   It has some useful checklists for first time-employers.

And with a growing network of Business & IP Centres across the country that’s even more reason to check out what help you can receive at your local Centre. And if you’re an established London based business the Innovating for Growth programme could just be the thing for you to take to the next stage of growth. 

Micro-businesses’ massive contribution

There’s also something a lot bigger at play here and it has everything to do with the health of our economy. A whopping 96% of businesses in the UK are micro businesses that employ up to 9 people, with small businesses in total making 48% of private sector employment (source: BIS Business Population Estimates 2014). 

But we shouldn’t forget that statistics are real people, with hopes and dreams. Employment provides people with a future, an identity, self-esteem and opportunities to progress in life for them and those around them. And working for an SME can be a great opportunity to pick up a broad range of skills and insight if the employee is motivated to learn and be resourceful.

Recruit, yes or no? If you’re running out of hours in the day, am spending too much time on tasks that take you away from what you really want to do then it’s a question that can’t be ignored. With the right advice and timing, employing someone could well be break that brings new talent, time and opportunities.

Jeremy O’Hare is a Relationship Manager for the British Library’s Innovating for Growth programme. Since joining the British Library in 2005 he has worked with countless businesses, facilitating advice and research as well as providing workshops and information advice for start-ups and established businesses.

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Innovating for Growth is run by the British Library and part-funded by the European Regional Development Fund 

 

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