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Saturday, June 15, 2024

How SMEs can win the battle for talent

When it comes to talent, small and medium enterprises (SMEs) are fishing in exactly the same pool as large companies who are offering well-established employee brands, multiple career path opportunities and bigger remuneration packages.  How do SMEs compete? 

In South Africa with its soaring unemployment rate, SMEs provide 60% of the employment opportunities.  This business sector is vital to the country’s economic recovery and future growth, yet the odds seem stacked against them when it comes to attracting the people they need for their businesses to become successful.  Even if it is just expanding the SME team by one person, finding the right financial, sales and marketing talent can be the difference between taking a SME to the next level or business failure.  This makes recruitment one of the most high stakes endeavours if you are an entrepreneur.

Lelemba Phiri, a gender-lens investor, the Principal and Founder at Africa Trust Group believes that the tide is turning for South African SMEs.  She says, “Traditionally it has been hard for SMEs to offer competitive salaries, especially lean start-ups.  However, there is a substantial increase in funding opportunities for SMEs, which can be game-changing when it comes to attracting talent.  Government has launched a variety of SME funding instruments, but there’s also broader investor interest and funding innovations that are coming to the fore.  This can empower SMEs and start-ups to compete on remuneration and attract high calibre talent.  We are also seeing the global rise of fractional work.  This is a trend that is ideally suited to start-ups and SMEs and can open access to amazing talent.  For instance, you may need a top-level CFO input on your growth strategy, but that kind of salary is not possible in your start-up phase.  However, there are now CFOs with those skills changing to fractional work, and you can get that input you need right now without paying a monthly salary.”

While big business may well be offering bigger salaries, SMEs do have advantages in being able to offer more flexibility, learning-on-the-job and excellent career and personal development opportunities – all of which suit the younger generations of workers.

Becoming brilliant at recruitment

Tough competition for talent and the hard search for rare talent have put the spotlight on recruitment as a strategic business operation.  Entrepreneurs hiring their first staff members or building up their team, need a focused, streamlined process encompassing all the important recruitment milestones – from crafting exact job descriptions to searching, screening, interviewing and making offers.  Typically, the recruitment process is slow, painstaking and tedious.  In today’s fast-changing global talent marketplace, this is no longer turning out well, even for the biggest corporate players who are discovering that top talent and rare talent slips away easily.

Sasha Knott, CEO of Job Crystal, an AI-based, SME-focused recruitment service, points out, “SMEs need to realise that they can compete with the big employee brands if they are smart and agile when it comes to their recruitment process. RecTech innovations are empowering entrepreneurs to find and reach talent pools that once seemed inaccessible to them.  Knowing what talent you want and need, engaging with potential candidates professionally and making sound but quick decisions can win the talent battle.  Our AI-driven CRYSTAL platform can search and screen 34 million employable people across 43 websites including job boards, job portals and social media sites, reaching a range of users, active job seekers, screening applications and passive hiders.  This means that SMEs can hire better and faster than big businesses.”

Typically, SMEs do not have experienced HR talent on their first team, which means that the owner and perhaps an administrative person are taking on the task of recruitment.  Few SMEs develop talent pipelines.  This lack of recruitment skills can lead to wrong hires that have a serious impact on a fledgling company.  Solutions offered by RecTech businesses such as Job Crystal help entrepreneurs to leapfrog this lack of inhouse recruitment skills and enable them to follow a world-class, strategic recruitment process.  In an era, where business is essentially marketing themselves to talent pools, this calibre of recruitment is essential for building a competitive employer brand.

Making sure that recruitment is cost and time-effective

Knott says, “Recruitment costs are exceptionally high in business, and often have their own line item on a budget!  The recruitment industry is generally targeted at large corporations, and so agency fees are standardised for them.  Many SMEs cannot afford the high agency costs or recruitment technology platforms that charge a monthly subscription, which is why SMEs go out and recruit on their own. Yet in a Price Waterhouse study it was found that a bad hire can cost you in the region of R250,000!  So as much as recruitment is expensive, getting it wrong can be more expensive.  It’s important to find recruitment agency solutions that are specifically aimed at being affordable to the SME sector.”

The adage of ‘time is money’ is most true for entrepreneurs, and time invested in recruitment must be taken into consideration.  Knott says, “Time is critical in an SME business. Business owners have to do the sales, admin, marketing, finance, strategy, HR and training – you name it!  Traditional recruitment tools do not work if you do not have time. Job Crystal’s own study found it takes 33 continuous hours to hire one person, and no small business owner has this amount of time to spare. We’ve designed our tool Crystal to help with 24 continuous hours of hiring by searching, finding and screening candidates.  This frees up the business time to focus on the business and not in it.”

Job Crystals’ top five tips for SMEs to recruit more effectively:

  1. Know what you need the role to do specifically for your business.  Resist the urge to try and find and place ‘jacks-of-all-trades’. Write a clear and specific job description.
  2. Use AI to help you search, source and screen candidates – this relieves you of the biggest time chunk spent in recruiting.
  3. Interview your shortlist virtually first as this a great time saver for you and the candidates.
  4. Always ensure that you do background checks before making an offer in writing to any candidate – these could be references and/or criminal checks.
  5. Be clear in your mind, and then write down what success looks for this role.  When you are interviewing, articulate this exactly to your potential candidates.

For more tips, advice and helpful conversations about SME recruitment challenges and solutions, subscribe to the Job Crystal podcast JobCast featuring Sasha Knott:

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