Recruitment
and employee loyalty are an important functions in any business but can make or
break a small businesses. For smaller firms a few bad hires can really cause
financial havoc. Not only is there lost time and money expended on poor hiring
practices but also the cost of training. A paper by Allen, Erickson and Collins
(2013) delves into the importance of developing employee commitment as it
relates to revenue growth and firm performance.
One of the
very first criteria is that leadership must have a solid vision of the
organization. Without a solid vision the overall hiring processes and the type
of recruit will naturally be misaligned. Recruitment starts with knowing the
type of person needed, their skill set and how that position will help achieve
the organizational vision.
It is often
assumed that prestige and money are the most important factor in recruiting
high quality employees and helping ensure they are retained for a significant
period of time. Sometimes, highly paid industries are able to recruit bright
minded people but these same people bounce from employer to employer seeking
higher levels of compensation.
Small
businesses are limited in resources and simply don’t have the ability to keep increasing
the pay to recruit and retain employees. They will need to compete where their
organization is most likely to be successful-and that has nothing to do with
size. The interactivity and relationships built in a small business can have a
more profound impact than pay and prestige.
Firms that
follow an employee commitment strategy create attachments based on
relationships, company identity, coordination of autonomy and informal control,
and selecting employees based upon firm values. Such organizations are not
command and control structures and seek to improve upon the positive
affectivity the employee has with the firm.
This is
different than what you might find in larger organization. Even though large
organizations seek to create stronger cultures it is much more difficult than
smaller firms. The sheer size and power-distance relationships can be difficult
to overcome. Instead many firms focus on compensation and prestige as driving
factors.
Nearly 65%
of all hiring is based in smaller businesses. It is important for such
businesses to focus on using their core strengths where size can actually be a
detriment. Hiring people based upon their value systems, encouraging them to be
independent in their thinking, foster close relationships, and creating
commitment to the firm are important for success.
Relationships
and sense of belongingness can go a long way in gaining commitment. People are
social creatures by nature and will stay in organizations that they develop
positive and meaningful relationships. Smaller businesses offer an opportunity
to socialize employees to a smaller group of people they can develop deep
relationships over time. A family like atmosphere can be a significant draw for
talent.
Allen, M.,
Ericksen, J. & Collins, C. (2013). Human resource management, employee
exchange relationships, and performance in small business. Human Resource Management, 52 (2).
