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Hiring_Best_Practices_body.jpgby Iris Dorbian.

As CEO of Steinreich Communications, an 11-year-old PR firm in Fort Lee, New Jersey, Stan Steinreich often works with headhunters. Usually they are tapped to help him fill top-level spots at his firm, such as media relations professionals or department heads. For the most part, this hiring strategy has worked out well for Steinreich although he does offer a few words of caution to small business owners:

"Use headhunters for very specialized or targeted searches," he says. "When they're selected in that context, they can be very valuable and really add an expertise to those different situations."

Yet not all extol the use of headhunters for small business hires. Tom Armour, co-founder of High Return Selection, a consulting firm that helps small to medium-sized businesses attract and retain talent, feels that headhunters have become largely antiquated thanks to professional social networks such as LinkedIn.

“Fifteen years ago before social media, you needed a headhunter to access a network,” he says. “Now with LinkedIn, that network of accountants is totally searchable.”

How then can a small business owner determine if it’s worth the time and money to retain a headhunter? Here are a few tips to consider before bringing on a recruiter.

Communicate expectations clearly
When meeting with a recruiter to discuss a possible working arrangement, be clear. State specifically what you are looking for in a job candidate as well as your expectations for the agency.

Elisa Sheftic, president and managing partner of The Right Executive Search, a four-year-old, search firm, concurs. Early on, she says, there needs to be “a conversation that defines expectations on both sides.”

She continues: The client needs to know: How long will it take to receive viable candidates? How do you source and screen candidates? What is the fee structure? What is the guarantee period? Do you do a background check or drug testing?

“[Similarly], the agency needs to know the skill requirements for the position and the compensation parameters. What is the interview process? How long will the interview process take? What is the process for submitting candidates? Will there be feedback in regard to each candidate so the agency can tweak the search if need be?”

Once all these questions have been answered, get it in writing. A contract, signed by both parties before the search begins, ensures that each side is clear on what to expect from the other.

“[A small business] should not work with any agency who cannot clearly define their process verbally and on paper,” insists Sheftic.

Consider the expense
Before signing on with a headhunter, determine if you can afford it. Recruiters usually get paid one of two ways: either upfront on a retainer basis, or on a contingency basis, which means after the client has hired one of their candidates. For the latter, the headhunter often takes a certain percentage of the hire's salary as well as any related cash bonuses.

Armour says the cost for a contingency search “typically ranges from 15 percent to 25 percent depending on the person they hire.” For a position that pays $100,000 a year, that fee can amount to anywhere from $15,000 to $25,000. Although some small businesses can afford it, that sum may be too steep for many.

Don't rush the interview process
Once a headhunter begins sending over viable candidates, be sure to do your part. That means taking an appropriate amount of time to meet with and evaluate each person. It’s a smart idea to bring other people into the process as well.

Steinreich says at his firm, job candidates, even those interviewing for junior-level spots, always meet with three or four people first before getting hired. The team will then discuss the strengths and weaknesses of each candidate—a committee approach that Steinreich maintains is essential to the vetting process.

Further, Steinreich says he will meet with job candidates during the first round of interviews as opposed to later on. The reason is simple: “I don't like being in a situation in which my team members have invested a lot of time in looking for somebody and that person gets to me and I say [to myself], ‘Oh my goodness. What were they thinking?'”

Trust the headhunter’s judgment—and yours
Hire a recruiter who either specializes in your industry or has a keen understanding of the nuances of the job you want to fill. Because they’re familiar with the kind of business you have, their recommendations of candidates should be trusted.


“A headhunter saves us a lot of time because they know who's out there and who's available,” explains Steinreich. “By the time we get those couple of candidates to come and see us, they are all fairly qualified. We know that in advance. It actually is very cost-efficient in that situation for us to go with a recruiter.”

In addition to trusting your recruiter's judgment, you should also trust yours. If you have a question about a candidate being the right fit for your business, ask him or her about it during the interview. In addition, do your own due diligence. Search engines such as Google or other social media can be used to verify an applicant's credentials.

The hiring process is never easy and a recruiter—when chosen wisely—can be a tremendous asset. Taking the time to be as selective with a headhunter as you are with a job candidate is smart business and can prevent costly hiring mistakes.


OrgStructure_body.jpgby Erin O’Donnell.

Your business might be small, but the way you structure it is a big deal.

Organizational charts aren’t just for big companies. Defining the structure, roles, and processes in a small business can make it more efficient, clear up communication issues, empower employees to make decisions, and keep the team accountable.

That’s certainly been the case for Sara Sutton Fell. She started from her home in Boulder, Colorado, in 2007 to create a better resource for freelance and telecommuting jobs. Today, the company has 40 employees who work virtually, just like their clients do.

Yet, even with such an unconventional arrangement, Fell realized her growing business needed some basic structure. Today, FlexJobs is organized functionally. The company has a layer of directors in areas such as client services and job research, with employees like writers and researchers reporting to them. “As entrepreneurs, we’re always wearing most of the hats,” Fell says. “I needed to have other people help me with the hats, or take over the hats. When you’re used to having your hand in everything, it’s hard to delegate.”

Define roles

Creating structure allows business owners to institutionalize the things they take for granted and the expectations they may not have expressed, says Dr. Michael Woodward, an organizational psychologist who coaches entrepreneurs and executives. “You can’t just tell somebody ‘Your job is everything,’ because then it becomes nothing,” says Woodward, author of The YOU Plan: A 5-Step Guide to Taking Charge of Your Career in the New Economy.

Woodward says structure provides clarity, consistency, and certainty. Your employees trust you when your expectations are clear and you’re consistent with them. Uncertainty is a hallmark of small businesses, but “as the owner, it’s up to you to shoulder that and create certainty for your employees,” Woodward says.

Types of organizational structure

Most businesses organize in one of four main ways:

  • Bureaucratic: The classic org chart setup, with top-down authority and one or more layers of managers. Most large businesses are still structured this way because their hierarchy is very tall, flowing from the CEO, COO, and CFO.
  • Functional: Employees are grouped by their functions, such as production or marketing. This works for small companies that specialize in a single product or service. The functional units aren’t accountable to each other, only to the top authority.
  • Divisional: Teams are organized by product lines or markets. Each division is somewhat independent, and the company has flexibility to create new products or expand into new regions and markets.
  • Matrix: A blend of functional and divisional. Employees are grouped by roles and divisions in teams that work on a project basis.

The risk of no structure

Business coach Mandi Ellefson says organization flows from your mission and values. Make sure both are well defined and known to all. “It empowers your employees to make good decisions based on your value system,” Ellefson says.

The biggest mistake you can make is having no structure at all, Woodward warns. Your staff might be small, but is your customer base? What about your vendors? Organization makes things clear for your external audience, too. They’ll know who to contact in any situation, instead of getting passed around. Says Fell: “It can be very disconcerting when it looks like you have too many cooks in the kitchen.”

Business structure experts recommend that small business owners put functionality ahead of personality. “Don’t mold things around people too much,” Woodward advises. “People gravitate to what they like or what suits them. And then you have a lot of things fall through the cracks because nobody owns it.” Without a structure for accountability, all decisions have to funnel through the boss, and that causes efficiency to plummet.

A process for everything

The proper organization also helps to define the processes that run your business. That, in turn, can make you more efficient. When Paul Kortman started digital marketing firm ConnexSocial three years ago, he employed a handful of contractors, but was still heavily involved in the day-to-day operations.


After listening to a podcast about creating strategic operating documents and processes, he changed his whole approach. “It warmed me up to being strategic about my business and having processes in place to have people do these things for me,” he says.

With Ellefson’s help, Kortman began writing processes for everything, then delegating those tasks. Within six months, he had 40 processes, and a staff of eight people following them.

Ellefson says the role of the owner or president is to build the structure and then hire the right people.  “It’s not the owners’ job to do the processes, but to understand them, so they can create the structure,” she says. “Business owners need to get out of the mindset that they are going to be doing the work. That’s micromanaging.”

Coach or quarterback?

Woodward says business owners must also accept that they’re no longer the star players of their team; they’re the coaches.

“It’s rare you will find a great coach who was also a great player,” Woodward says. “There’s a reason for that. Star players get their glory out of scoring the goal, being the one to do what they have to do in a clutch situation. Coaches enjoy seeing people go out and do what they taught them.”

Leanne King faced that choice in the early stages of her human resources firm, SeeKing HR. Founded in 2007, the San Antonio-based company provides third-party HR to other small businesses.

“I had to figure out, did I want to be a business owner or an HR consultant?” King says. She chose to be the president and stick to the numbers side of the business. Then King hired a second-in-command who is strong where she is not, in roles such as networking.

Today, SeeKing HR has 15 employees in three divisions: HR program management, employee development, and employment service. As the company grew, King knew she had to honor the structure she had imposed, which meant she had to redefine herself to her oldest clients. “They still think of me as their rep, and I can’t be,” King says. “I can’t be the point of contact for every single employer, but I’ve been the constant.”

Structure can be flexible

Woodward says structure doesn’t have to be rigid, as long as it provides a reliable framework.

Tennis friends Jayne Drew and Kelly Daugherty started Smashing Golf and Tennis in 2009 because they couldn’t find athletic clothing with built-in shapewear. Both came from industries that organized around projects, so that’s how they structured their company.  But they had never mapped out their organization until they decided to seek funding. “Our lines were going everywhere. We realized we were doing a classic matrix management and we didn’t even know it,” Drew says.

Smashing has about 10 employees who come together in teams around projects, then reform to work on others. They report to whichever partner oversees the type of work they’re doing. Drew says they have learned to be very detailed about assignments. An employee juggling multiple projects, for example, will be told how many hours to spend on each.

“I’m sure a lot of small companies have figured out how to make it work with a more traditional structure,” Drew said. “We look for people who are more willing to work in this kind of environment.”


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