The U.S. economy recorded its tenth straight month of net job growth in June. As reported on Inc.com last week, most of the job gain came from small business.
According to the Federal Government's Small Business Administration (SBA) a whopping 99.7 percent of employer businesses are classified as small (fewer than 500 employees) in the United States. These account for between 60 percent and 80 percent of net new jobs created. In fact, between 2000-2001, according to the SBA, all net new jobs were created by small firms.
As the June employment numbers suggest, small business appears poised to lead the economic and labor market recovery. The National Federation of Independent Business (NFIB) reported in May this year that its Small Business Optimism Index has been trending up each month for more than a year. The report states that among the small firms surveyed, "plans to create new jobs are at historically high levels." According to the report, "plans to create jobs were positive in every industry and looked good in all nine Census regions."
With numbers like these one would think there would be dozens of recruitment technology firms vying for a share of this market. There are more than 23 million small organizations with an ongoing need for employees in the United States. Yet, of the well-known HR technology and consulting firms, hardly any target this market.
Even among the better branded of the specialty recruitment solutions providers (who themselves are almost certain to be small enterprises) the focus is on the "Global 2000" largest companies and government agencies.
Yet, as we've seen, nearly every enterprise in the U.S. is "small" and their aggregate demand for talent has far outpaced demand from "large" enterprises over the past dozen years or more. With fewer internal resources to ponder HR and recruitment strategies, and with fewer technology and consulting firms to service them, what can small enterprises do to plan for their increasing talent needs in the face of pending labor shortages?
The first hurdle may be the most basic - simply taking the time to look at the issue. According to industry thought leader Howard Adamsky of HR Innovators,
"'¦ everybody is doing two or three jobs and nobody has the time to step back and just take a strategic look at what's going on and the direction the business is taking."
Kim Shepherd, President and CEO of Decision Toolbox agrees: "In small organizations that I'm seeing, they are not stepping away to see the forest for the trees in the human capital space."
Planning is indeed the first step in revamping a recruitment strategy, whether in a small or large firm. The smaller the firm, the less complicated this needs to be. Step back and look at your organization holistically. Assess the skills and competencies you have versus what you'll need to achieve corporate objectives (international expansion vs. domestic focus, expanded lines of business, new locations, etc.) and plan against at least three economic scenarios (expansion vs. contraction, new direct competitors, etc.). Try to understand what types of people you'll need to recruit and retain and then build that capacity using best practice techniques and technology.
To this point, Adamsky says, "There has to be an education of people at the 'C' level as to what they should be looking for in terms of human capital. If the people who are in charge of hiring at the top aren't aware of what the the core competencies should be, how can the company ever expect to achieve success?"
This point should resonate in small organizations, most of which have limited in-house recruiting resources and are even less likely to count an "HR Strategist" among their ranks. Yet the need to approach talent management and recruiting strategically is as important in small firms as in large. Steve Lamotta of HRsmart says that especially for small enterprises, "We shouldn't be focusing on the position (i.e. HR) of the person in the organization; it's a matter of thinking and representation. They (executives) need that intelligence on how to manage, value and measure human capital in the business. Anyone can manage human capital; you don't have to be in a role."
His point is insightful. In small firms as in large, talent management and strategy must become the responsibility of leaders throughout the organization. The difference in small firms is that there is no one designated to lead the charge. Therefore, it is open to any leader who understands the importance of talent to lead the small organization's transformation to one that can effectively compete on talent (see last week's article: Is Your Company a TMO?).
After planning, the first things a small enterprise must get right are employment branding and candidate sourcing. Employment branding is more difficult for small firms because few are recognized outside their industry and/or locale. Nonetheless, it is important to build an employment brand so that the best candidates and those that are most likely to fit in with your corporate culture will want to work for you.
Developing excellence in candidate sourcing is even more important. If your organization doesn't know where to find the best people, it is, by default, recruiting a sub-optimal workforce. The best sources for candidates differ within industries and between companies, so it is important to track which sources of candidates produce the best hires for your specific needs.
Recruitment planning, strategic sourcing, employment branding and sourcing effectiveness are dependent on the use of technologies and best practices. In next week's article, we'll take a closer look at "talent management" technologies that integrate these and other essential recruiting processes.
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