Getting a new recruit through the door is certainly cause for celebration, but save the champagne for when they’ve settled in happily.  

At a webinar last week that explored HR for small business, Ai Group Workplace Lawyers’ Head of Legal and Consulting, Victoria Halliday, said recruitment was just the first step in the employment cycle. 

Retention, reward and talent development are equally important, and failing to pay attention to these areas could incur significant costs to your business.

Recruitment  

It’s important to be clear about who and what you’re looking for, Ms Halliday said. 

“When someone resigns, your first response is probably: ‘Let’s place an ad on Seek ASAP’,” she said.  

“We call that the ‘post and pray strategy’ — hoping for the best that someone comes knocking. It’s not a great starting point. You need to take a more strategic approach to recruitment. 

“Giving considered thought to this process is more likely to set you up for success down the track.” 

Don’t rush into it  

Take time to determine the capability required to deliver the outcome.  

For example, if you want to boost marketing online, a candidate whose experience lies in traditional media such as newspapers and TV may lack the skills you need. 

Be clear about the outcomes you’re looking for and what that means in terms of both the capability required for the role as well as the timing for when you need a resource to start performing that work. 

“If you rush to fill a position, you may get a bunch of applicants and end up taking the least bad,” Ms Halliday said.  

“Whereas if you know that you have more time, you can wait to make sure that you get the right candidate for the role.”

Consider widening your net when it comes to finding quality candidates: turn to your professional networks including those on the online platform, LinkedIn, along with the networks of your existing employees. 

Those in your circle are likely to suggest candidates who not only have the right credentials and experience but are likely to ‘fit in’ with your organisation’s culture, too. 

A job ad is more than just an ad 

The job advertisement is part of your marketing strategy: it’s selling not only the role but your organisation, too.

The ad should: 

• attract attention from quality candidates, 
• use inclusive language and  
• communicate clearly what you’re looking for to instigate action. 

Leave no doubt about the action you want potential candidates to take: what they need to do if they’re interested, who they need to contact and how they should apply. 

A two-way process 

It’s not all about what a candidate can do for your organisation, they will want to know what you can do for them, too. 

“Be prepared to articulate why you’re an attractive proposition to candidates,” Ms Halliday said. 

“What is it about your organisation that would make people want to come and work for you? 

“This is not just about pay but more broadly about what else you can offer. 

“It’s important to have the right person fronting the recruitment process because they’re also giving candidates an impression of your organisation. 

“Remember, recruitment is a two-way process: you’re being interviewed as much as you’re doing the interviewing.” 

Selecting your candidate 

After receiving applicants, you then need to select a candidate. 

There is no ‘one size fits all’ method, but you may consider: 

• an application form to filter candidates, 
• screening interviews to decide whether you want to take a candidate to the next round of the application process, 
• competency-based interviews using set questions to enable you to compare candidates, 
• unstructured interviews to understand who the individual is and how they might fit into your organisation, 
• a work sample test to assess capability or 
• external testing such as psychometric testing at an assessment centre. 

Picking a winner  

It is a given the successful candidate will have the capabilities and experience to match the role criteria. 

Other factors, such as attention to detail and the ability to follow instructions, may help cement your choice. 

Is their CV free from spelling and grammatical errors? Have they filled out their application form correctly? Have they followed application instructions? For example, if you’ve asked them to submit a cover letter and a CV, have they submitted both? Have they stuck to the page limit you’ve specified? 

“These are all good indicators of what they may be like as an employee,” Ms Halliday said.

Also look out for unexplained gaps in employment and overqualified applicants.   

If there are employment gaps, make sure you understand why these have occurred and that you’re comfortable with the explanation provided. 

If the candidate is overqualified, they may still be great for a role but may not provide longevity. 

“Overqualified candidates can be difficult to retain,” Ms Halliday said. 

“They might be happy for a period of time but may seek to move on more quickly than you’re expecting because they need a new challenge.” 

Retention 

Once you’ve got someone in the door, how do you keep them? 

“Retention really matters,” Ms Halliday said. 

“There are significant costs associated with turnover — tangible and intangible.” 

Intangible costs include a slump in morale among remaining staff. This is particularly relevant in small organisations where high turnover is highly visible across your team. 

“It may lead to a drop in productivity because employees are unsettled by the fact people are leaving,” Ms Halliday said. 

“There’s also the loss of intellectual property, not just in the legal sense but the knowledge of how things are done in your organisation and how issues are managed.” 

Tangible costs include recruitment costs, the opportunity cost of spending time on recruitment rather than running the business and the costs around payout of entitlements when people leave. 

“Flip the way you think about your employees when you’re taking a retention perspective,” Ms Halliday said. 

“What can you do to prevent your employees from wanting to leave?” 

Common reasons people leave employment 

A variety of “push factors” may prompt an employee to look at Seek themselves. 

These include: 

• they’re not inspired by the organisation’s business, 
• the job hasn’t been designed to give them empowerment and satisfaction, 
• there is a lack of resources which makes their job stressful, 
• there are a lack of career development opportunities, 
• they’re dissatisfied with their pay or  
• they have poor relationships with colleagues. 

“As an employer, you need to think about the actions you can take to generate effective pull factors to counteract these push factors,” Ms Halliday said. 

Different strokes for different folks  

What’s important to one employee may be different to another. 

“Your employees may very well want different things from their employment, which will not only reflect the point they’re at in their career but also the generation they’re from,” Ms Halliday said. 

“We know, for example, that Generation X is particularly focused on reward and recognition. 

“We also know inclusivity in the workforce is a priority for the generation that’s currently coming through, Generation Z.  

“You need to accept this reality and ask yourself: ‘What’s important to my employees, and how can I address that so I’m doing what I can to create an organisation that is a great place to work and where my people want to stay at?’” 

Common priorities  

Factors important to most workers, regardless of stages of life or points in careers, include:  

• job satisfaction and engagement, 
• working as part of a team, 
• corporate social responsibility,  
• engaging relationships/a sense of community, 
• consultation on matters that affect them and their work,  
• market-competitive remuneration and  
• flexible working hours. 

Show me the money 

As well as ensuring you’re paying your workers what they’re legally entitled to under the relevant industrial instrument, make sure you’re paying them the market rate. 

“Failing to do so means you will fail to attract the talent you’re looking for,” Ms Halliday said. 

“An appropriate pay structure will also motivate the employees you already have. You want people who are going to help you achieve your business goals. What you pay is an important part of that. It’s an important part of retaining your workforce.” 

Your pay structure should also reward employees. 

“If you’ve got people who are doing a good job, your pay structure should be giving them recognition for that,” Ms Halliday said. 

“It shouldn’t be a ‘set and forget’ scenario, either. Keep your remuneration under review.” 

Performance — business and individual — will help determine this. 

It’s important to budget for annual salary reviews.  

Managing difficult salary discussions 

Despite the link between retention/engagement and pay, some pay discussions might be difficult. 

“You’re not always going to be able to pay people what you would like to, so you need to manage those discussions in a way that minimises the damage that it might cause to the relationships with your employees,” Ms Halliday said. 

“In this situation, ensure the discussion is honest and clear. 

“Don’t try and fudge the message; explain the ‘why’ and be clear: ‘This is how the business has performed this year. This is why I’m not in a position to do more.’ 

“If you’re not being clear, you’re not going to be an engaging leader. You’re not going to build up the leadership trust you’re looking for, which will have a detrimental effect on retention and engagement. Own the decision.” 

It starts at the top 

Leadership and culture are important from a retention perspective. 

Be clear about your organisation’s vision and purpose so employees can understand how their role can contribute to that.  

It will give them another reason for wanting to stay at your organisation. 

Trust and teamwork are vital, along with open communication.  

“You want to be talking to your employees and have a clear flow up and down, which means you’re hearing what your most junior employees are saying, and they’re hearing what you’re saying,” Ms Halliday said. 

Share success stories 

Highlight the wins so everyone in the organisation understands what’s going on. 

“If someone brings on a great client or carries out an impressive piece of work, celebrate it within the organisation because it really does drive that high-performance culture you’re looking to build,” Ms Halliday said. 

“Recognising individual performance is so important. There’s no need to wait until the performance review. 

“There are so many ways to create a positive employment cycle — beyond recruitment.”  

This webinar was part of the Business Recovery Advisory Service (BRAS), a free one-on-one business advice program for small businesses in eligible LGAs in Victoria, delivered by Business Victoria in partnership with the Australian Industry Group.