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Business Development & Marketing Cash Flow & Forecasting Finance General

The costs of investing in staff

invest in recruitment or outsource?Replacing an employee who is leaving, or adding additional staff as a business grows can be a costly endeavour.
This is not only at the point of recruitment but also it is important to consider the additional costs of employers’ duties, such as National Insurance contributions, auto-enrolment in a pension scheme and so on, and the investment required for induction to help a new employee to understand the corporate culture and the training necessary for them to learn how to do things the company way including systems, procedures, reports, using equipment or following the brand bible. And this is before investing in any staff development or changing their role.
If, however, you think this investment is expensive and are concerned they might leave once trained, consider the cost of not training staff and them staying.

Recruitment

If sourcing from an agency, especially for a senior level position, it is important to understand the agency’s fee structure. In a recent example one of our clients had recruited a manager using this route and paid the full fee of £16,000 which was refundable on a sliding scale if they left within three months.  Unfortunately, the new recruit left after four months leaving the employer with the cost of having to replace them.
Recruitment is not only a cost in terms of advertising the position and, in this case, the agency fee, but also in the time spent in selecting candidates for interview, conducting interviews and following up on references.
In addition, once in post, a business will have to factor in the time it will take for the newcomer to settle in and be able to function effectively.

Are there alternatives?

It can be difficult when a company’s order book is growing so that the volume of work is greater, reaching the point where existing staff can no longer manage the workload.
If this is starting to affect the relationship between business and clients this will add to the pressure.
While it can be tempting to save time by using an agency, online services or finding ways of using in-house resources to recruit key staff may avoid unnecessary costs such as that in the example above.
However, before embarking on recruitment, it may be worth a business having a look at its systems to see whether anything can be automated or improved in other ways.
Systems for processing and tracking orders through to final invoice may not have been automated when the business was smaller, but with increased volume it could be more cost effective to install a new system.
Another option may be contracting work out so that the business does not have to consider recruitment and payroll costs at all.
A third option may be to invest in training an existing employee and promoting them, then recruiting an apprentice or a lower-skilled addition to the team.
Innovative thinking is always necessary to business survival and to keeping costs under control, but never more so than when a business is growing.

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Business Development & Marketing Finance General Uncategorized

How to ensure you are recruiting the right people

For a small businesses in particular, recruiting the right employees can be a challenge.
Key elements of recruitment are knowing the sort of person you want and being clear about what you want them to do.
HR and recruitment advisers will all focus on a job description but personal values and other qualities may be far more important since you are often looking for someone who will ‘fit in’. This is key to handing over responsibility when you have done it all yourself up to now.
Finding potential candidates, knowing how to interview them and selecting someone can feel somewhat random as on paper many candidates look fantastic.
But don’t worry about getting it wrong, probation periods and a trial and error approach will eventually find the right person providing you don’t keep anyone who isn’t right.
Despite the above, it is worth taking the time to write an accurate job and person description. It forces you to think about exactly what is required for the role and will provide a checklist throughout the selection and interview stages.
Every job and role description should include the job title and the position in the company, details of the line manager and any other members of staff reporting to them, a summary of the general nature, main purpose, and objectives of the job, a list of the main duties or tasks of the employee, which skills/qualifications are essential and which are desirable, plus any equipment or software requirements and the salary and benefits. The checklist of criteria for candidates should also cover the intangible qualities you are looking for.
Sourcing candidates can be an expensive process if using a recruitment agency. Advertising in local media and dealing with applicants yourself can be much cheaper although more time consuming. There are other alternatives worth considering such as looking through records of past interviewees, advertising in places frequented by your ideal candidate, actively searching profiles and social networking sites and attending suitable events or asking existing staff.
Interviewing can be tricky but the aim should be a positive experience for both interviewer and candidate. A checklist of questions and keeping notes of responses and your impressions will help.
If your selection process has already identified those who have the right skills it’s worth remembering that at interview stage you can focus on the person and how they will fit in.
Only after you have offered someone the job will you really know if they are right so don’t be afraid of choosing the wrong person. You can try again. Whichever process you adopt for recruiting staff, don’t keep on the wrong people, don’t keep on those that don’t ‘fit in’.