Recruitment process: guide for small business owners

Finding new talent is a crucial step when growing your business. We explain all the stages involved to take you from initial draft, to employee contract.

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Written and reviewed by:
Helena Young

The recruitment process is a series of steps, covering job descriptions and the hiring of new employees, to onboarding, getting them on your HR and Payroll systems, and passing their probation periods. An effective recruitment process is designed to attract, assess, and select the best talent for an open job role.

Perfecting the recruitment process is vital for small business owners – especially in today’s tight labour market. But, while most of us will have experienced the recruitment process from the candidate's side of the desk at some stage or other, the responsibilities involved in overseeing and organising the hiring process may be less familiar.

Because of this, taking on your first employees can feel daunting. Particularly for SMEs, who often lack a specialist Human Resource (HR) management team. But, it’s also an exciting time. Every new starter has the potential to bring unique skills to better your company’s growth proposition.

Whether you’re taking on your first hire, or just want a refresher on the steps involved, the below article will break down everything you need to know – including the legal essentials – to find your feet in recruitment.

6-step guide to the recruitment process

An effective recruitment process ensures that your company hires qualified and skilled individuals who can contribute to its success. Here’s how to set up an effective HR recruitment process in six steps:

Step 1. Plan the recruitment process

Clearly define the role you are seeking to fill, and the responsibilities it will entail. 

Before you even consider posting a job advert, clarify your needs internally by outlining the basic information about the vacancy you are trying to fill. Include information on job title and reporting structure, as well as a list of tasks and duties that the new hire will be expected to perform.

After the ‘what’ comes the ‘why’. Summarise the thought process behind creating the position and how it will contribute towards the firm’s overall strategic plan. Do this by considering the needs of the existing team, the skills and experience required for the position, and the SMART objectives set for the department or company.

For example, let’s say a PR and marketing agency wants to start working with online influencers. A team leader might decide to hire a social media manager who has experience in this field of marketing, to ensure customer satisfaction and diversify their service offering. They will need to explain this reasoning before creating a job ad.

Step 2. Write job descriptions

Create a detailed job description to outline the duties, qualifications, and expectations for the role. 

Remember: a job description is for the job seeker, not the recruiter. One of the most common mistakes when writing a job description is to waffle, and fail to clearly describe the role.

Most experts advise a job advert is no longer than 500 words, which means you only have space for the fundamentals. Leave out irrelevant details, such as your firm’s origin story. Any key information should be either in bullet points, bolded, or otherwise clearly signposted. 

Avoid esoteric language. In some cases, it is appropriate to include technical language – particularly when hiring a specialist – but stay away from business jargon if you want to hire right. Qualified job seekers might be put off from applying because of an unfamiliar acronym.

Decide also what you want to pay staff based not just on your budget, but also on the level of experience you want from a candidate. Use industry benchmarking to calculate what rival businesses might offer for a similar position and experience-level.

Step 3. Advertise the vacancy

Identify appropriate sourcing channels to advertise the position and attract qualified applicants, such as:

    • Online job boards, like Indeed or Reed
    • Professional networking sites, like LinkedIn
    • Employee referrals, where staff put forward qualified friends or contacts
    • Schemes such as the government’s Access to Work scheme for disabled adults
    • Social media channels, such as TikTok.
    • Using a third-party recruiter (more on this below)

Remember that today’s job seekers want to know more about a company than just its location. They’re after meaningful work that reflects their personal beliefs – to the extent that career marketplace LinkedIn unveiled a values-based search tool in May 2023.

Your job ad should include a compelling company biography that accurately represents the business and highlights its organisational culture. This sits below the job description so the candidate can instantly see if a role is the right fit before they start looking into the employer.

Step 4. Screen candidates

Identify candidates who meet the basic qualifications and requirements of the role and discard any who don’t.

Screening typically involves reviewing resumes, cover letters, and any additional application materials. It can be time-consuming, particularly for time-poor SMEs. That’s why many modern employers now deploy Artificial Intelligence (AI) for recruitment.

In this initial stage, AI tools give human resource managers the ability to assess thousands of CVs at-pace. It can be immensely valuable as a way to efficiently cross-check a candidate's skills and experience against the job description.

Whether you're using AI, or going through CVs one-by-one individually, it's important to be conscious of potential hiring blind spots that may unconsciously limit the types of candidates you're considering.

Depending on the recruitment resource you have available, you may also choose to organise an informal call with the job seeker during screening. This is to confirm basic details such as their location. 

In any early communication, make sure you ask the applicant about salary expectations. This will help you to confirm that both sides are on the same page. If their figure is wildly different from what is being advertised, it can be an immediate conversation killer. This isn’t the kind of mismatch you want to identify only after a third-stage interview.

Step 5. Interview candidates

The most qualified candidates from the screening are then entered into a shortlist to be interviewed.

Interviews are a great opportunity to evaluate a candidates' suitability for the role away from the constraints of a paper CV. That includes asking questions that may have arisen during the screening stage, such as:

  • Why did you leave your previous role?
  • How would you describe your preferred style of working?
  • What interests you about working at this company?

On top of the traditional Q&A, various other assessments may be employed to test recruits in a way that reflects the unique traits of the job. For example, you might ask the candidate to complete a task to see how well they perform technical or professional competencies.

Other evaluation methods include psychometric tests. These provide insights into behavioural traits, work styles, and aptitude to help form a complete picture of the worker’s personality, and how they might complement existing temperaments within the team.

Remember that a job interview is a mutual exchange. Allow the candidate time to ask their own questions about the role and company so they can consider if it’s a place they want to work. 

Before a job offer is given, a final round of interviews with key decision-makers within the organisation is typical. This is to confirm that the business owner or department head is happy with the talent available. 

Step 6. Make job offers

Once the top candidate is identified, extend a timely job offer. 

Usually taking place over the phone, your offer should include details of remuneration, notice period, and start date. Any information given should also be sent over email to ensure a written record of what was discussed. 

Timing is important when extending a job offer. Waiting for a phone call can be incredibly stressful for the applicant. Offering the position in a timely and empathetic manner shows the organisation respects the candidate, and is genuinely interested in hiring them. 

Smart job seekers will also have been interviewing for multiple roles to avoid putting all their eggs in one basket. Even those who are desperate to work for you may choose to pursue other opportunities if your own offer is unduly delayed.

Whatever the outcome, the candidate enters into employment only when a contract has been signed. Before this time, they are still entitled to reject the offer. Employers should suggest a deadline for the contract to be signed to discourage any drawn out dilly-dallying.

In the period between a person accepting a job offer with the company, and their signing the paperwork, be prepared for debate. It is common for applicants to challenge the salary or benefits being given at this stage, even if they seemed satisfied during screening. 

In this era of flexible working, for instance, it’s not uncommon for a candidate to announce at the point of job offer that they’d prefer to work from home more days per week than your company may typically offer, for instance. You’ll have to think carefully about agreeing to such flexibility, if it isn’t being offered to existing employees.

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The above six steps for effective recruitment might sound rather brief, given how influential new people can be to an organisation's success. But, each phase comes with plenty of caveats and certain elements that businesses should tailor to their unique needs.

For example, a hospitality firm with high turnover might choose to forgo practical assessments during screening for faster onboarding (saving this instead for the probation period). On the employee side, a candidate might ask to work a flexible arrangement to fit professional commitments around childcare.

During both of these scenarios, it’s important for organisations to remain flexible with their recruitment. View the above steps as guidance, not instructions, to ensure you can still accommodate a diverse range of candidates with varying needs and developing skill sets.

Legal obligations and considerations when recruiting

Anything that can impact a worker’s money and wellbeing comes with significant considerations for HR managers. This is also true in hiring, where a person’s livelihood can depend on whether the process is handled correctly by recruiters. 

Business owners must be made aware of the legal obligations and considerations during recruitment, to ensure that the process is compliant with all UK employment laws. This is an exceptionally complex area to understand – just one of the reasons that growing businesses typically hire a Chief Human Resources Officer to assist with oversight of such legal obligations.

Here are five key areas to be mindful of:

1. Anti-discrimination laws

According to the Discrimination and the Equality Act 2010, all employers must take steps to ensure they do not discriminate against job applicants on the basis of protected characteristics. These include:

  • Race
  • Religion
  • Gender
  • Sexual orientation
  • Age
  • Disability
  • Marital status

Throughout the entire recruitment process – whether this involves job advertisements, application materials, or interview questions – all interactions with the candidate must be free from discriminatory language or practices.

Biases can be unconscious, so it’s smart to educate staff on the subject. For example, asking an older candidate in an interview when they plan to retire might seem harmless. But, it’s actually illegal, as it appears to express concern that the applicant will leave the workforce soon.

2. Data protection laws

Employers must comply with General Data Protection Regulation (GDPR) data protection laws when collecting and processing confidential information, such as candidate names, addresses, or phone numbers.

They must also obtain consent from applicants to collect their data and only use it for the purposes of recruitment. GDPR guidelines also require employers to take steps to protect the confidentiality and security of data, such as by saving it within a secure HR software system.

Clearly, this means you shouldn’t be leaving a printout of a candidate’s CV out on your desk for weeks on end. But, it also means you shouldn’t forward a CV of interest to another colleague’s email address, either. The fact that it can remain in their inbox and your sent items is, in fact, a potential GDPR breach.

3. Employment contracts

All potential workers must be given an employment contract before they can be considered a full staff member. This should lay out the key terms and conditions of employment such as salary, working hours, and employee benefits.

For the business, there’s no real reason not to do this. Giving new starters their contracts in advance means they have more time to review their employment terms, serving to avoid misunderstandings and contract disputes down the road.

4. Right to work checks

Employment law states that every new recruit must be subject to Right to Work (RTW) checks to ensure that the person can be legally employed in the UK. Naturally, they are particularly important if you’re hiring from abroad.

Managers can usually do this easily by verifying the employee's passport, visa, or other work authorisation documents online. Employers must save (and safely store) copies of these documents to prove that the RTW check was appropriately conducted.

5. Criminal record checks

If a role involves working with vulnerable people or handling sensitive information, employers have the right to check a candidate’s criminal background before they bring them on board. 

Before they can do so, however, employers must obtain consent from the candidate and showcase a Disclosure and Barring Service (DBS) policy. In compliance with GDPR, the employer also can only disclose the results of the criminal checks to relevant staff members.

How long does recruitment take?

There is no ‘correct’ length of time for finding the best talent. How long it takes to make the right hire is dependent on a variety of factors, including:

  • Industry competition: the entertainment industry is more competitive than the nursing sector, for example
  • Seniority: entry-level job descriptions will have more applicants than those asking for 20+ years of experience
  • Location: a business based in a densely populated area like London will find it easier to source in-person talent than a firm in rural Yorkshire
  • Notice periods: the new starter might need to work a notice period for their old employer (typically between 1-6 months) before starting at your company

Despite many sectors desperately needing talent, research has shown that the time it takes to bring someone on board is increasing, on average. According to recruitment company AMS, it took 44 days to appoint someone to a new role in 2023 (up from 43 days last year).

Partly, this increase is a reflection of the current jobs market. The skills gap has made it much harder for bosses to find and attract qualified candidates. As employers compete fiercely for talent, it is taking longer to find the right person for the job.

Is now a tough time for recruitment?

As we’ve hinted throughout this article, the UK job market is currently very competitive. In the majority of sectors, there are more jobs than job seekers. That includes retail and hospitality; two industries that are dominated by smaller, cash-strapped SMEs.

There are still some silver linings for business owners to cling to, however. Large numbers of tech layoffs in 2023 have deepened the pool of tech and engineering talent. Convenient, given the current significant digital disruption that AI is bringing to businesses.

Plus, our experts have pulled together a number of useful guides and tips for improving your chances of success in the recruitment process, such as:

How to run an effective onboarding process

Commonly, a new hire is not considered a full employee until they have passed probation. That makes the new recruit’s early months in the workforce a critical period for judging both their suitability for the role, and their ability to meet probationary KPIs.

Success in these areas is more guaranteed if the employee feels properly supported and welcomed. In short: if attracting and assessing staff helps to find top talent, an effective onboarding process is the best way to retain it. Here are four tips to design one:

  1. Plan and prepare: design a structured timeline for the onboarding, allocating specific timeframes for orientation, training, and team catch-ups. On the latter, get ahead by pairing the newbie with an experienced mentor who can be a friendly face for guidance and support.
  2. Be welcoming: upon the recruit’s arrival, send them a personalised welcome email expressing excitement about their arrival. Provide them with necessary materials, such as employee handbooks.
  3. Integrate: organise team integration activities for the new hire to start building working relationships early. You could arrange a welcome lunch or social gathering with colleagues to create an informal, undaunting environment for the newbie.
  4. Gather feedback: 1-2-1 meetings provide an opportunity for new hires to offer their input and concerns on their progress. Managers should use this to inform employee performance data for probationary pass or failure, as well as improvements to the onboarding process.

Outsourcing recruitment: pros and cons

One of the biggest questions currently facing employers is whether or not to outsource recruitment

Bringing in a third-party expert to find top talent certainly sounds smart. But in today’s poor economy, does it make more sense to keep overheads down?

Here’s a quick run through of the pros and cons of outsourcing your recruitment process:

Pros of outsourcing recruitment:
  • Outsourcing recruitment can reduce recruitment costs by eliminating the need for in-house recruiters
  • Recruitment agencies have access to a wider pool of candidates
  • As experts, recruiters will be fully compliant with UK employment laws
  • Outsourcing recruitment frees up others in your team to focus on the overall strategy - particularly if you don’t have an in-house HR team
Cons of outsourcing recruitment:
  • You’ll have less control over selection, so candidates may not align with the company culture and values unless you identify a recruitment agency that specialises in such focuses
  • Reduced collaboration between the organisation and the provider may lead to delays and inefficiencies
  • Recruitment fees can be as high as 20% of a recruit’s annual salary
  • Onboarding and integration process may be less personalised

Conclusion

Forget first-day nerves. The complexities and steps involved in the recruitment process can make hiring as daunting for employers as it might feel for candidates. That’s particularly true for SMEs, who have to work with limited budgets and expertise.

Still, by understanding the key steps involved – and especially the legal nitty-gritty – even the smallest companies can confidently attract and retain top talent to compete with the industry leaders.

The above guidelines act as a quick orientation course for SMEs who are new to the recruitment process. Executed properly, they will ensure a smooth and efficient hiring strategy that sets the stage for successful employee integration and long-term productivity.

Recruitment process FAQs
  • How long does recruitment take?
    Recruitment has become a longer process than it used to, as employers compete to find talent in a tight labour market. On average, in 2023 it took 44 days to find, assess, and onboard a new hire, although this will differ depending on the role and industry.
  • Should you outsource recruitment?
    Third-party recruiters can save SMEs money in the short-term, as workers will have more free time to focus on their strategic priorities, rather than hiring and interviewing. However, once the business has grown to a size that can support its own HR team, it should hand over these responsibilities to in-house recruiters to avoid expensive outsourcing fees.
  • What makes a good job advert?
    Job adverts should be 500 words maximum, and comprise of a job description and a company description. The former should detail the role (like responsibilities, salary, benefits, and experience-level), while the latter should outline what the organisation stands for (like culture, mission statement, and values). Ignore details that don’t fit into these two categories.
Written by:
Helena Young
Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.

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