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25 Tips for Hiring and Managing Employees in a Small Business

12 Mins read

To help small business owners navigate the complexities of hiring and managing employees, we’ve gathered insights from 25 founders, CEOs, and HR professionals. From setting clear expectations and trusting employees to going beyond the resume, discover the top tips these experts shared for successfully hiring and managing your small business workforce.

Set Clear Expectations and Trust Employees

First, it’s essential to have clear expectations from the start. You should create job descriptions that clearly articulate the roles and responsibilities of each employee, so they know exactly what’s expected of them. 

Next, ensure that you hire people who demonstrate relevant skills and qualities for the position—such as problem-solving abilities, strong communication skills, or expertise with particular software programs, so they’re well-equipped for their role. 

Once someone is hired, deliver regular feedback on how their performance can be improved. Also, set up systems that prevent burnout by encouraging team members to take breaks throughout the day and use tools like Slack or Skype for remote work collaboration when appropriate. 

Finally—and perhaps most importantly—trust your employees! This means giving them autonomy and allowing them opportunities to make decisions independently.

Travis Lindemoen, Founder, Enjoy Mondays

Promote Diversity and Inclusion

When the entire world is in favor of a more united, unbiased world and expects to see inclusiveness in every industry, you can’t help but take diversity trends seriously because they will not only boost your employer brand but also ensure you hire top talent without falling victim to unconscious bias that may creep in during the hiring process. 

For these reasons, having internal employment policies that encourage diversity and inclusion is critical. To eliminate unconscious prejudice, make sure your interview questions are inclusive and your job description is properly verified. This will provide you with fresh options to attract top individuals who deserve professional recognition but are frequently discriminated against due to racial, ethnic, or religious differences.

Marc Hardgrove, CEO, TheHOTH

Showcase Employee Satisfaction on Social Media

Employees have a deep emotional connection to the company brand. They want to work for a firm that has a great culture and places a high priority on employee satisfaction. Before accepting a job offer, candidates frequently look up the company on social media to see what its employees are saying. 

It makes sense to motivate your staff to promote the business on social media platforms, share their experiences as employees, discuss the perks you provide, etc. Talk about your CSR endeavors and advertise job positions on social media. It will aid in attracting applicants with similar views and cultural fit.

Doug Van Soest, Cofounder, SoCal Home Buyers

Prioritize Communication and Collaboration

When it comes to hiring and managing employees in a small business, effective communication is essential. Actively listen to your team members, providing them with a platform to share their thoughts, ideas, and concerns. 

Timely feedback is crucial for their growth and development, recognizing their achievements while offering guidance for improvement. By promptly addressing concerns and challenges, you create a supportive environment where employees feel valued and motivated.

Encouraging collaboration among your employees is equally important. Establish channels for cross-departmental communication, enabling them to share knowledge and expertise, fostering innovation and problem-solving capabilities.

Open and transparent communication cultivates understanding, builds trust, and aligns everyone toward shared objectives. By prioritizing effective communication, you empower your team and enhance productivity contributing to the overall success of your small business.

Dan Reed, Career Coach and HR Consultant, Top Prospect Careers

Foster Growth Opportunities

Every employee we hire chooses to work here because we offer room to grow and security. The world is always going to need contractors, and with enough experience, and some business skills, the sky’s the limit on where you can take it. 

We encourage ongoing learning, and when they’re ready, start training our employees more on the business side of things. This translates to every other business. As long as you provide room to grow, and encourage that growth, you’ll find the best candidates possible.

Rick Berres, Owner, Honey-Doers

Hire Versatile and Experienced Employees

Small businesses usually have to be lean when it comes to personnel, especially when they’re launching. So it’s essential to hire and manage employees who not only have previous small-business experience but who are also professional and ingrained with the willingness to learn new things and wear many hats.

And while it may seem to involve less candidate-searching effort and expense to hire friends and family to help you with your small business, you’ll be rewarded long term by making sure they possess these qualities, as well as the maturity to deal with you being their boss.

Michelle Robbins, Licensed Insurance Agent, Clearsurance.com

Conduct Regular Workforce Audits

The key to hiring and managing employees in a small business is regular audits. Don’t trust your gut feeling; check in with your workforce every so often to ensure no voids are emerging. 

A quarterly survey does the trick, but make sure you’re asking the right questions. Are any tasks falling through the cracks? Who is carrying an oversized burden? Keep it anonymous to ensure honesty and openness. The answers will provide the data you need to shift responsibilities or bring on a new hire.

You won’t know if you don’t ask, so stay connected to your employees and let them offer suggestions. They often have a better view of your workforce needs than you do.

Tim Walsh, Founder, Vetted

Implement Frequent Performance Reviews

Having performance reviews is nothing new for a small business, but in order to make them effective, you have to do them frequently. The problem with the traditional performance review structure is that the gaps between evaluations are too long, which often means the problems have grown to a less manageable level by the time they are addressed.

Having frequent reviews, doing more informal check-ins, and creating a safe and comfortable environment for employees to ask questions and receive feedback at the time of need, is imperative to creating an effective and productive team. 

By implementing a process for more frequent reviews, you can correct small issues before they become major problems and, in doing so, build a healthy small business environment.

Alexandre Bocquet, Founder and CEO, Betterly

Source Talent Globally 

We’ve been a global business from the word go, which can be a bit intimidating and makes hiring the right team a massive undertaking. 

My advice for businesses with a wide scope and big ambitions is to not shy away from looking abroad for your hires. It has worked out well for me because we needed the geographical expertise, but I know plenty of business leaders that hire a few programmers from Poland, customer service locally, and an Italian accountant because they’ve expanded into the market there—just to give a few examples.

The skills you need aren’t always at your fingertips, but odds are you can find them if you are willing to cast a wide enough net.

Dragos Badea, CEO, Yarooms

Adopt a Collaborative Leadership Mindset

Personally, I like keeping a mindset that “Employees are not there to work for you, you’re there to work for them.” This exudes genuine leadership that will motivate potential candidates to join your team and retain employees that you can grow together with.

Offer assistance in any way you can to ensure that they succeed at their job, meet with them weekly with no distractions (turn off your email/phone). Go over their projects and ask if they need/offer assistance to move the needle ahead.

Make sure they are as informed about company and department info as you are; the worst thing to have are employees who feel boundless and ill-informed.

In addition to that, my employees and I work collaboratively together often; we use a company program to whiteboard ideas. Everything is done as a team; their work is just as important or more than mine, and I acknowledge that constantly.

Jonathan Merry, Founder, Moneyzine

Utilize Hiring Funnels and Test Tasks

We recommend using hiring funnels. As a start-up with limited recruiting capacity, hiring may turn into a nightmare if you screen candidates and interview them equally.

Create a test task that all applicants must accomplish before you invite them to an interview. This technique will cut off weak or lazy candidates. Ensure it won’t take more than five hours to complete, but that depends on the role. 

For positions in IT and development, with high competition, we gave coding tasks that could take up to two days to solve. The task may include writing a blog post, shooting a video to present yourself, or a coding assignment.

When reviewing tasks and interviewing, include several hiring managers on board to avoid subjectivity.

Always give detailed feedback, even if the candidate did not pass the test. Maintain polite communication and never neglect to write back to all candidates after you’ve chosen your ideal candidate.

Daria Erina, Managing Director, Linked Helper

Treat Employees as Stakeholders

My underrated tip for hiring and managing employees is to make regular employee check-ins and sentiment monitoring a business priority. These practices foster open communication, build trust, and ensure employee satisfaction. 

Employees are stakeholders for your business, just like customers or investors might be. Treating them as less than that impacts business performance through productivity, company culture, operational efficiency, and, most glaringly, employee retention.

By regularly checking in with employees, managers address hands-on concerns, provide constructive feedback, and align company goals. Sentiment monitoring, such as surveys or informal conversations, helps gauge employee morale and identify immediate areas for improvement. 

The proactive approach strengthens the employer-employee relationship, boosts productivity, and reduces turnover. Prioritizing employee well-being and engagement contributes to a positive work culture and the business’s long-term success.

Ubaldo Perez, Founder and CEO, Hush

Eliminate Unnecessary Education Requirements

If you want to find great workers, then you should cast as wide a net as you can. Some jobs really do require a specialized degree or training, but many others don’t. 

For any position where there isn’t a need for a four-year degree, consider cutting that out in favor of work experience. This will give you a bigger group of potential candidates and help you bring on the best talent you can get—rather than just the ones who went to college.

Josh Weiss,  Founder and CEO, Reggie

Ensure Payroll Compliance and Centralization

No matter what is happening with your company, you must abide by the regulations of your state or country and pay your employees appropriately and on time. The agreed-upon remuneration should be precisely what was agreed upon. 

However, this can be difficult because your staff members are divided into numerous benefit categories. Manage your payrolls and other associated tasks using a centralized system. GreytHR, RazorpayX Payroll, Zoho Payroll, etc., are a few well-known examples.

Axel Hernborg, Founder and CEO, Tripplo.com

Establish Clear Communication Lines

Effective management communicates openly with their employees to gain their respect and trust. Establish a platform where employees can discuss their ideas, suggestions, and complaints without being judged. Hearing them out and getting to know them better will help you better relate to them and boost their self-confidence. 

It’s critical that you see things from their perspective to understand them. Resolve conflicts by addressing them privately and praising them publicly. Open communication is the key to helping your employees feel comfortable in the workplace.

Brian Lee, Co-founder and CEO, Arena Club

Offer Flexible Scheduling Options

In my opinion, the best way to help people find a good balance between work and life is to give flexible scheduling options whenever possible. Recognize that individuals have personal duties and commitments outside of work. 

To meet their demands, consider establishing rules such as remote work, flexible hours, or reduced workweeks. Additionally, offer resources and assistance for employee well-being, including access to wellness programs, stress-reduction opportunities, and mental health programs.

Edward Mellett, Co-founder, TestHQ

Balance Team and Individual Recognition

Learning how and when to treat employees as a team, and as individuals, made a huge difference in my management skills. Tip pooling encourages teamwork. It eliminates competitive behavior that hurts the business. 

However, when one of our front-of-house employees gets a positive review online, or a customer asks to see a manager to praise them, we recognize them individually. It’s about maintaining a little bit of healthy competition and giving everyone praise for individual contributions.

Kam Talebi, CEO, Kaskaid Hospitality

Create an Adaptable Team

When managing a small business, I often think of the wise words: “Specialization is for insects.” For both hiring and managing, I have found that the key is versatility. I remember during a particularly busy season five months ago, our primary UI/UX designer had to set up tracking, while our front-end developer temporarily shifted into a web design role.

Instead of focusing on a narrow set of tasks, I aim to hire individuals who can be as changeable as sailors during a storm, shifting roles and responsibilities as required. This approach not only adds variety to their routine tasks but also enables us to adapt quickly to changing business circumstances.

Marliis Reinkort, CEO, Code Galaxy

Avoid Micromanagement

One crucial tip for hiring and managing employees in your small business is to avoid micromanagement. It is important to remember that you hired your staff because you saw potential in them, so trusting in their abilities is vital. 

I found that allowing my employees the freedom to innovate and make decisions leads to increased job satisfaction and improved performance. I recall a particular instance when one of my warehouse staff members suggested a more efficient layout for our outdoor gym equipment. Instead of disregarding the idea, I let him take charge of the project. 

The results were astounding, increasing our productivity by 20%. Micromanagement can limit such creative thinking and initiative. Therefore, encourage your employees’ growth and autonomy instead.

Lucas Riphagen, Co-owner, TriActiveUSA

Shortlist Candidates by Initiative and Passion

My hiring strategy for my business is rather unique compared to most companies. Instead of solely relying on job boards for candidate discovery, I pay close attention to the emails I receive from individuals who are eager to join our company.

These potential candidates often send compelling cover letters stating their willingness to join our team. If I find these emails to be genuine and not merely sent as spam, I shortlist these candidates. This process requires a keen eye for detail and an ability to discern sincerity and professionalism in written communication.

Remarkably, this strategy has proven successful for us. More often than not, these shortlisted candidates turn out to be excellent employees. They demonstrate the kind of initiative and motivation we value in our company. This approach may not be conventional, but it has certainly worked in our favor.

Samrah Jamal, Digital Marketing Executive, Shenzhen Unilight Technology Co.Ltd

Prepare Onboarding Procedures

My tip is to have onboarding procedures in place regardless of how small you are as a business. Business owners are often caught off guard with just how quickly scaling can occur, and you don’t want to be caught out with a lack of onboarding procedures when that growth does occur!

Nicky Walker, Head of HR, Connect Communications

Cultivate a Unique Company Culture

In the war to win top talent, budget constraints may make it difficult to compete with larger companies in terms of pay and perks. But small businesses can attract job seekers who seek more than a high salary by promoting unique aspects of their company culture. 

These can include a close-knit and collaborative team, flexible work options, L&D opportunities, or the fact that there’s more direct recognition for a job well done. While matching enterprise-level wages and benefits may not be practical, promoting what makes working at your business unique can make job seekers eager to apply.

Guna Kakulapati, Co-founder and CEO, CureSkin

Vet Talent and Ask Questions

Go beyond the resume. Vet the talent requesting employment with you. Ask ALL of your questions. 

When I first began, I felt it wasn’t my place to question someone saying they have a high level of experience, and I made a lot of bad hires because of that. I expected their skill set to reflect their resume, and often that wasn’t the case. You will save yourself a ton of mental and financial anguish by asserting your expectations prior to offering a role.

Logan Rae, Founder, Argon Agency

Find People Who Share Your Values

When you’re hiring new employees, it’s important to find people who are a good fit for your company culture. This means finding people who share your values, who are passionate about your work, and who are willing to go the extra mile.

For example, you could ask a candidate to describe a time when they had to deal with a difficult customer or a time when they had to work under pressure. Then, watch for if a candidate is fidgeting or looking around the room a lot, they may be nervous or uncomfortable.

Also, get feedback from other employees. Once you’ve narrowed down your pool of candidates, it’s a good idea to get feedback from other employees. This will help you to get a sense of how the candidate would fit in with the team and whether they would be a good cultural fit for your company.

Brenton Thomas, CEO, Twibi

Go Beyond the Resume

The one tip that has helped us hire the right people and manage them effectively is looking beyond their on-paper credentials in determining their professional strengths.

It’s not feasible to capture the entirety of a person’s caliber within a 1-page resume.

So, at the time of hiring, we take the time to learn not just about the candidate’s professional experiences, but also their personal inclinations and aspirations. This helps us develop a wholesome picture of the individual and the potential they can bring to the table.

We adhere to a similar approach in managing our associates too.

We conduct regular connects with each associate, where we discuss in detail things like what they’re liking about their work, what areas they want to grow in, any challenges they could be facing, etc.

The idea is to give them the tools and support they need to tap into their own potential.

Astha Verma, Co-founder and CEO, WrittenlyHub

Brett Farmiloe is the founder of Terkel, a Q&A platform that connects brands with expert insights.

Employees stock image by Look Studio/Shutterstock

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