Employing People – is it really that scary?

With the average recruitment of just one member of staff costing a business approximately £5,000 for a management position and £2,000 for all other positions, and taking nine weeks to complete, surely you want to make sure you spend that money and time wisely.  Whether you are about to recruit for the first time, or have done it before but with varying success then read on … Don’t have time now? Download our  Gateway guide to employing people.

Employing people is what will make your business step away from being a one-man (or woman) band to creating a business that generates income for you, whether you do the work yourself or not.  It is what will allow you to establish a balance between work and leisure time, and perhaps even the occasional holiday.

However, we know that employing people can be a pretty daunting thought, especially if it’s for the first time.  Suddenly, you are responsible for someone else’s livelihood and all the perceived responsibility that comes with that.  The second daunting thought usually focuses around all the horror stories you hear about employing people – what if they take you to the cleaners for something you do wrong; whether you meant to or not?!

Recruitment is so much more than remembering to plan some interview questions a few minutes before the person walks in the door.  The Resourcing and Talent Planning Survey undertaken by the Chartered Institute of Personnel CIPD (2020) shows that the average cost of recruiting a general member of staff in 2020 was £2,000, rising to £5,000 for management and leadership positions.  How these costs are arrived at is discussed in this report, but we’re pretty sure if you are going to spend at least £2,000 on recruiting then you want to spend more than a few minutes planning how to make the most of that money?  You wouldn’t spend £2,000 on a whim on anything else, so why recruitment?  Another cost to consider is what it will cost if you get recruitment wrong, again covered in this report.  This goes way beyond “simply” paying out another £2,000 to do it all again, what if you do give someone the job and they turn out to be a bad choice and cause chaos in your business?

If as a business you have recruited before and are confident you are covering all the aspects and making sure you get the best person, congratulations.  We’d like to help you to ensure that this continues due to having the right processes and plans in place, as opposed to you’ve been lucky up until now!

If you are new to recruiting, or perhaps have done it many times before but with varying success, then we definitely want to work with you.  Our team can help you undertake a holistic approach to recruitment in your business that will start to see results in more ways than you could imagine.

Before we tell you more about how we can work together, let us first tell you more about how many stages there are to recruitment, why it is so important to get it right and how to manage it to ensure you get the best result.  Due to the nature of the complexities of employment law we do also have to say at this point that whilst every effort has been made to ensure the accuracy of the information provided, nothing in this report should be relied on as a statement of absolute fact.  This is especially true of any legal information.  In the latter case only an overview is provided and, of course, the law is constantly changing so do take advice before making any recruitment decisions that you feel may be risky for any reason.  We cannot accept any responsibility for any harm or loss caused, directly or indirectly, as a result of the use of this guidance.  The impact of getting it wrong can have a huge cost to a business. A few years ago, a man submitted a claim for £82,000 against Virgin Atlantic Airways Ltd for race discrimination for not being selected for an interview.  He wasn’t successful but others have been.

Recruiting others is a big decision and unfortunately, it appears to be that bad news and horror stories make the headlines so much more than good news.  Perhaps then it is no wonder that people worry about employing others as a lot of what they hear is about employees not working as they should do, causing trouble or taking employers to court and costing them money.  Having over 70 years collective HR experience between us, we are not naïve enough to say these things don’t happen BUT they are by no means the majority.

From our studies and research, working with clients and our own company experience, we know that taking on a team should be the best thing you do in your business.  It is your team that will help your business go from strength to strength, find new opportunities and make sure it runs smoothly.  However, none of this will happen unless you give some serious thought, planning and time in to finding and managing a team – whether that is one person or 100s of people.    Getting the most from a team is not rocket science, on the face of it, it is not that complicated – but without the time and effort it needs, it will be impossible.

1. How Do I Know I Need More People?

For a small business the first recruit often happens when the business owner realises they cannot do it on their own any more.  Hopefully this is due to increasing demand for the product and service, and very simply more people are needed to deliver.  It is very often that the business owner suspects that they may be working for free some of the time!  What do we mean by this?  It is when crucial activities such as logging hours worked, invoices and credit control get forgotten as you are too busy delivering the product or service.  In the first 2 years of business, Gateway HR MD, Emma is sure there were many hours she worked and never invoiced for as she simply forgot or didn’t have time.  It sounds like madness but it is very common.

The other common factor for small businesses is that as the owner you are pretty sure you are missing out on business as you have no time for any sales or marketing activity, or if you do you very rarely follow up on any leads.  With research showing that most sales happen after you have made contact with the person well over 10 times, it is very rare that the business owner doing all the jobs can do this.  Very often business owners take on more staff to enable them, in Stephen Covey’s words, to spend more time on the business rather than in the business.

As you become more established as a business and have been employing for a while, then the most common reason for recruiting is to replace someone who is leaving.  This could be through resignation, retirement, not returning from maternity leave, illness or very occasionally because you have dismissed them.  One key part of advice is not to rush in to simply replacing like for like; but we’ll come on to that.

Another reason can be that you need extra people for a specific project or large order and for whatever reason you decide you need to employ for this, not use agency or sub-contractors.  Your options in this situation are covered in section 4 in terms of what you offer.

So, now you know you need someone / some people, where do you go from there?

2. It surely can’t be that complicated: what does recruitment and selection involve?

Technically recruitment and selection are two distinct and different activities.

• Recruitment – is how you go about attracting people to want to apply for the role and getting those applications in.  It covers everything (that we will discuss below) from designing the job through to how you receive applications.
• Selection – is once you have a good number of applications for the role, how do you go about choosing who gets as far as any selections tests and then of course ultimately how you chose the successful candidate(s) to offer a job to.

So, as Julie Andrews once said “let’s start at the very beginning”.  Before you can even think about how you are going to attract candidates to apply, you need to be sure what you are looking for.  In the world of HR this is often know as job design and it is just that.  In section one we mentioned about not just replacing like for like if you are recruiting for a leaver.  This is your golden opportunity to really review that role and if you are sure you still need it, do you still need it in exactly the same way.  For example, you may be recruiting for the receptionist who has handed in his notice.  His role had purely been reception cover and if there was no one there to welcome or the phone was silent he simply sat there.  You take this opportunity to make it a receptionist and administrator role, with various tasks assigned to the job that can take place when reception is quiet.  Alternatively, you may save some money and employ an apprentice in this role – if you have the time needed to train them.  At this point you should also take the time to review why the previous role holder left the position – retaining great employees is a great way to reduce recruitment costs! The CIPD Resourcing and talent planning survey (2020) highlighted that few companies use the information gleaned from learners to influence the job design.

Once you know what you are looking for, you can develop a job description which is basically a document that outlines the key aspects of the role, its responsibilities and ideally how performance is measured.  This is usually paired with a person specification that outlines what someone needs to be able to fulfil the role.  These two documents take time but will be key throughout the time you need that role, not just in recruitment, but for pay decisions, performance management and career progression.

Having a person specification allows you to shortlist applications once you have them.  The basic principle being if someone does not have at least your essential criteria they do not get invited to the next stage.  These things can be related to qualifications, skills, experience or aptitude.  Usually, a person specification will outline criteria that are essential and some that are desirable.  This enables you to shortlist the applicants that are most likely to be employable, and also gives you some protection if you were to end up in a tribunal, as you can show how you made those decisions.

The next huge area to consider is how you are going to get your role noticed and crucially, by the right people, and attract them to apply.  This could be a whole report in itself but the options are outlined in section three.    The complexities of getting recruitment and selection right goes someway to explaining the costs of recruitment mentioned in the introduction, bringing us back to our main point of giving it the time and attention it needs.  The costs of £2,000 and £5,000 quoted above take into account the following costs: advertising, agency fees, reimbursed candidate expenses and costs of any tests.  It does not include an amount to reflect the amount of time it takes and what you are not working on as you are spending time on recruitment; the opportunity cost.  Therefore, the potential true costs can be much higher.

What are my options?

Recruitment

The options for getting your role noticed include the traditional advertising in the relevant press, using recruitment agencies, web based recruitment and social media to name just a few.  How you choose which to use will depend on many factors, one of which is very likely to be cost.  A full page advert in the Sunday Times is likely to be out of most people’s budgets but even in your local press is likely to be more than you would think – and are you sure your potential ideal candidate even reads that paper?  Our main advice would be think carefully about who your ideal candidates are and where they can be found.

Once you know where they are, how do you tempt them to apply?  Once again think about what is likely to attract them.  Is it as simple as money, in which case you need to emphasise the salary / hourly rate – as long it is attractive of course!  However, it may be that people will be more interested in other aspects.  Is your company known as a great company to work for – would people want it on their CV?  If so, make sure your logo is very prominent and jumps off the page or screen.  Is training likely to be what attracts them or the chance to be promoted – if so, make that really obvious. An increasing number of companies are using technology such as their own website and LinkedIn to attract future employees, by showing the world who they are and building relationships before they even have a vacancy!

Finally, and this may seem obvious, make sure it’s clear how your candidates can apply.  All too often we see adverts that do not do this.  Your ideal candidate may not be actively looking for a role and so unless it is really clear how to apply they will simply move on.  Give some thought as to whether you just want people to send in a CV and covering letter, or are you going to develop an application form.  There are pros and cons to both.  We would always suggest using an application form as you can make sure you are asking for all the information you need (as CVs vary hugely).  Plus, if you receive a large number of applicants, it is much easier to compare and shortlist from an application form.

Selection

As outlined earlier, selection as the name suggests, is how you select people to go through to the next stage and ultimately how you select who to offer the role (s) to.  This is often called shortlisting.  It is important that you take your time in doing this so as not to waste your time, or a candidate’s, by inviting someone who does not have the basic skills/qualification/experience you need.

Once you have a number of candidates to see, you need to consider how you are going to assess whether they are ‘employable’.  This measure is the very baseline i.e. if they don’t meet this standard, you would not employ them even if they were the only applicant.  All applicants should be measured in the same way.  Knowing which of your applicants meet your measures, and to what extent, means that if your preferred candidate does not accept your offer of employment, you have a back-up candidate.

The standard interview is still by far the most popular means of selection and if prepared for, can be highly effective.  Prepared for means thinking through the questions you are going to ask, who will interview and knowing what you are looking for/hoping for in their answers.  This is where the job description and person specification come in to use again.  Ask questions that allow them to demonstrate the experience they have and how they might use that in your business.  Make sure you use open questions and give them plenty of time to answer.  It may seem obvious but, in an interview, it should be the candidate doing most of the talking.  We always recommend that you use questions based around either behaviours or situations in order to get the most information and be able to make a judgement on their suitability.  As you will see in section 5 you do need to be careful what questions you ask, to be sure you cannot be accused of being discriminatory in any way.  However, the general rule of thumb is to not ask anything you cannot justify the need to ask, and if in doubt don’t ask until you have taken some advice on it.

It is always a good idea to interview with someone else if you are able to do this.  Practically, it is another person to think of questions and have an opinion but in addition to this, it can also offer some protection against spurious claims (explained in section 5).  If you do interview with someone else then make sure you decide beforehand who is asking what, so you don’t look silly and disorganised!  Also, keep notes from every interview so that when you get to decision time you can remember who said what and again be able to compare.  Notes are also something that can protect you if needs be.

Although interviews are a very effective way of selection, they cannot test everything that is on the person’s application.  This is why we also recommend some element of testing, to be sure they can do what they say they can.  Whilst most candidates will not lie on their application, they may have very different definitions of being proficient in something.  For example, last year we interviewed for an office administration role for a client in which having excellent IT skills were an ‘essential’ criteria for the successful applicant.  We tested all the candidates on their Word, Excel and PowerPoint skills to the level the client would need them to have, and 70% did not meet the required standard, despite putting that they had advanced skills in all these packages in their application.  If we had not tested the skill level of applicants, the client would not have found out until they had started the job, at which point they would have needed to decide if they wanted to spend time and money on training the individual, or if they wanted to go through the recruitment process again – both of which involve more time and/or money.

Other examples of skills testing we have used includes:

• For a receptionist – a telephone manner test where one of the client’s current team rang in, being a difficult customer to see how the candidate reacted and handled the call.
• For a sales role – asking the applicant to ‘sell’ the product the client sold (a software package) to the interview panel.
• For a HR consultant – giving them a case study to read half an hour before the interview and then asking them how they would deal with the case.
• For an assistant in a coffee shop – asking the applicant to take someone’s order and serve them their coffee.

As with recruitment, there are so many options for selection so give it plenty of time and attention to ensure you choose the right methods to ensure you have the best possible chance of selecting the right person.

3. Do I have to offer a full time position?

Once you have selected the person you want to offer the role to, you now need to make that offer.  There are so many options now that can suit both your needs as the employer and those of any potential employees who may not be able to undertake a full time role.

Hopefully you will have thought this through beforehand in terms of what you need and also at interview, but full time is only one option.  You may not need, or be able to afford, a full time role.  The options include (amongst others) part time, job share, annualised hours and term time only.  As you can imagine, the term time only options really appeals to parents who cannot, or do not want to work in the school holidays.  We certainly got one of the best marketing people out there for my team by offering her term time only, which no other business was willing to do.  It took planning and co-ordination to ensure we had marketing activity going on all year round, but it worked!

You can also offer a role on a fixed term basis as opposed to permanent.  This means the person has a contract for a set time period and then it comes to an end.  This is often used for project related roles as discussed in section one, so for example you employ someone on a 6 month fixed term contract to work on a project and then it ends.  You can always extend a fixed term contract – if the person agrees of course!  Equally though, don’t make promises you can’t keep, that is not fair on either party.

4. Are there any risks or legal things I need to know?

As you can see with the example in the introduction, people have employment rights before they are even employed by you.  By this I mean there is the potential for a claim from any point after they show an interest in a role with your business. Therefore, take care at all stages to be sure anything you do is not discriminatory or could be deemed to be.

The main “risk” comes under the Equality Act which covers all types of discrimination, including age, disability, sexual reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.  There are not many businesses out there now that would deliberately or overtly discriminate such as putting in an advert “women need not apply” (!) but often discrimination is not so overt or hopefully deliberate.

In relation to age, it is there to protect all age groups.  The obvious is you cannot refuse to employ someone purely because they are too old.  However, be careful that the number of years’ experience you are asking for does not discriminate against younger workers.  Insisting on 10 years’ experience rules out anyone in the age range of 16-26 for a role.  It is not to say you cannot ask for experience but make sure it is reasonable, if this was a coffee shop it would be very hard to justify to a tribunal needing 10 years’ experience.

The other key area is in an interview – don’t ask discriminatory questions.  The classic example we always give is asking a lady “do you have plans to have children in the near future?”.  If she is then unsuccessful in her application, then she may, quite rightly, claim that the only reason for that was because she said she does plan to start a family and therefore that is sex discrimination.  In relation to interview questions just use common sense and think through why you need to ask what you are planning to.

5. Once I’ve made an offer what do I do next?

When making the offer you need to be clear what that person’s terms and conditions are.  This covers many areas but the main ones are pay, working hours and location and any benefits.  Make sure you cover all these so that they know what they are accepting.

All offers should be made subject to you receiving satisfactory references for them.  I am very aware that getting references is much harder than it used to be as employers are so afraid of saying the wrong thing.  However, if you make an offer subject to reference, if you do get a poor one you can withdraw the offer.

Depending on the role it may also be subject to other checks.  Several of our clients work with the vulnerable and young people and so all job offers are subject to a Disclosure and Barring Service check (DBS).  In the financial sector there are also checks to be carried out.

Once an offer has been accepted in writing then you need to start thinking about an employment contract and an employee handbook.  If this is not your first employee, then you should have these things in place.  However, we strongly advise you get them checked to ensure they are still legally compliant and protect your business.  I am not going to write any more about either of these two areas as we always recommend you get a professional to write these for you as they are so key to protect your business.

Finally, once they have started, you need to set them up a personnel file where you store all relevant documents from their recruitment and then throughout their employment with you.  This includes evidence of checks relating to their ‘Right to Work’ in the UK which is also your responsibility.  Full details of these can be found online: https://www.gov.uk/check-job-applicant-right-to-work

6. Welcoming the new team member (aka induction/employee onboarding)

The most important thing you can do on an employee’s first day is make sure that they feel welcome.  Of course, there are lots of other important things they need to know, but the most important for them is that they have made the right decision to join you.  If someone has their doubts on the first day, they are much more likely to leave and you are back at square one with recruitment.  In HR this is known as the induction crisis, when someone feels they have made a bad choice and leaves or at least start looking.

I can relate to this from an employee’s perspective.  In 2000 I made the difficult choice to leave a role in HR that I loved and had a great team, to join a new organisation as it was a great career move.  At lunchtime on my first day, I vividly remember being sat at my desk in a shared office wondering what people did for lunch; what time did people go? Where did they go? Who did they go with.? As I sat there like Billy No Mates, I seriously considered ringing my old manager and asking for my job back.  All it needed was for someone to at least explain the process for lunch breaks or even better, offer to show me where the canteen was and come with me.

An induction needs to be so much more than “here’s your desk get on with it”.  If you want the employee to be effective as soon as possible you need to make sure they know what is expected of them and in some cases how to do it. Formal inductions can vary from a few hours covering the essentials right through to several weeks.  You need to decide what a new employee in each role in your business needs and then plan it.

7. Making Sure They Stay

Related to the induction you also want to be sure that they stay with you, not necessarily forever, but to make your investment worthwhile and add value to your business.   The best way to do this is to work towards providing a working environment and role that they are engaged with.

By this I mean how committed are they to that business and so want to do their best for it. Do they have genuine belief in what the business does, want to do their best for their manager and customers and not let their team down?  This is what is known as employee engagement and is what makes a business really thrive.

To get an engaged workforce takes a lot of work but is worth the effort in terms of the results it will deliver.  There is a huge amount of research in this area (I wrote a whole MA dissertation on it!!) but the basics are making sure that people feel valued by an organisation, believe in it and have a say in how it operates.  This is delivered through excellent communication and line management.

So…in summary

• Give careful consideration to the role you want filling – identify the main tasks and responsibilities.
• Identify the skills, knowledge, experience and personal attributes needed for the role to be undertaken effectively – what is essential? What would be considered ‘nice to have’ if you had the option?
• Consider where you will find your ideal candidates – do they read a specialist journal? Do they use LinkedIn? Or do they walk past your coffee shop window? This will help determine how you will advertise your job.
• Plan how you will assess who is the best candidate for your job – think CV’s/application forms, telephone interviews, Zoom video calls, in person interviews, informal chats, formal panels. tests, presentations, personality profiling…….
• Think documentation – offer letters, references, employment checks, contracts of employment, handbooks etc.
• Plan effective inductions – make sure you cover everything from team member introductions, training on company processes and systems right through to your company values and the general do’s and don’ts of the company.
• Continue to look after your employees – make sure they stay engaged by considering communication, motivation and effective management.

There are a few ideas in here to get you started, but the main intention behind this guide is to get you thinking about how you can make recruitment a smooth and well planned process, avoiding common and sometimes costly pitfalls.

The problem is often that with so many other things to do, recruitment is rushed and unplanned and then people are surprised when it does not yield the result that they wanted.  By taking a more planned and measured approach you have a much better chance of finding the right person at the first attempt, preserving your brand as an employer and keeping within whatever budget you set yourself.

We have been supporting clients at various levels with their recruitment needs for years, so if this still feels too daunting, or if you don’t feel you have the time needed to undertake this level of planning, call us – my team are here to help.