Each country and each industry has its own criteria and definitions when it comes to small to medium-sized enterprises (or SMEs). However, managing an SME is similar to managing a business with a certain level of assets, revenues and employees.
Despite this, SMEs make up a large percentage of the business population. SME businesses can include retailing, service, leasing, manufacturing, and trading.
Many SMEs fail due to lack of experience, financial problems and, most importantly, poor planning. The key to running a successful SME business is selecting the right people for your team.
These tips will help you if you are still not planning the employment portion of your SME.
1. It is important to think it through.
Before you do anything, think about whether you actually need to hire employees. It will depend on what type of SME you are looking to start. Now, you can easily outsource services such as accounting and marketing .
The web is often the best choice for expansion. Instead of hiring a full-time web designer, you can hire a freelancer to maintain your business website.
Administrative assistants can be hired now. Do not hire more employees than you actually need. In your business plan, you should specify a number of employees. Each employee that you hire increases overhead costs like training time, workspace, compensation, and other expenses.
2. Let’s get on with the costing
After you have made your final decision on the number of employees you require and the outsource services that you need, you can start to calculate the cost. Determine first if you are hiring full-time employees or part-time workers.
In your business, include the entitlements for each type of employment. If you plan to hire a recruiter, be sure to take into account these costs and any other advertising requirements.
Payroll tax, training materials, courses, workers’ comp, and equipment like devices and uniforms are all financial expenses to be aware of. You should also consider non-financial expenses, such as the time required for new roles’ training or management.
3. Know your legal responsibilities
Your legal obligations are the third thing you should consider. This is especially important when you are hiring new staff members. Many SME owners make the greatest mistake of ignoring the legal responsibilities.
Your tax liability should be the first thing you look at. Check the eligibility of your employee and their Social Security numbers. You should check the regulations in your country or state for employee benefits.
Interview questions that are off-limits may also be asked. Ask only the legal questions during the interview process. Background checks are also subject to the same restrictions. There are many restrictions on what information you can access in different states.
You can conduct a criminal background check in most cases but not credit checks.
4. For track record and potential
Many business owners have learned that it is better to hire based on work experience and education than others. Others recommend focusing more on the potential of the candidate. You might want to consider both.
Let’s start with the track record. Your SME should be complemented by the candidate’s education and degree. You should be aware of any positions that require advanced education programs or postgraduate degrees.
These could include a master’s degree or doctorate.
The employee’s work experience is another consideration. Although it may not be necessary, a candidate with solid work experience can be an asset to your business.
Hire someone who is passionate about the causes or missions your SME pursues. Do not judge the track record of an applicant.
5. Do not skip the reference check
You might not expect to have a greater impact on potential employees if you check their references. An applicant should have at least two professional references and one personal reference.
These references can provide valuable information about the applicant. Focus on asking objective questions when speaking to professional references. These should be directly related to the job duties and performance of the applicant.
You can request personal references to inquire about the work ethic or character of the candidate.
This guide is for you, whether you are an online retailer, freelancer or contractor who wants to start your own SME. Your employees are your company’s lifeline so ensure you hire the best candidates.
These tips will help you to build the best team for your SME.
