Taking on new staff, building your team, expanding your staff. Whatever you want to call it, it’s one of the trickiest stages of growing your business.
Hiring new employees is expensive and risky. It’s also an inevitable and necessary part of business expansion that many of us need to learn to master at some point. We’ve supported a large number of businesses through this stage of growth, holding their hand and providing the finance needed to get the job done properly. Here, we share some of our insights into how you can use your unsecured business loans to help you master the recruitment process yourself.
Do you need unsecured business loans to expand your team?
You don’t always need to borrow money when taking on new staff. Some business owners will arrive at this stage in their business lifecycle with plenty of spare cash to pay wages. However, this is pretty rare and most small business owners will find that a cash injection is needed to help them afford new recruits.
As well as paying more wages, the recruitment process in itself costs money. Especially if you want quality advertising and assistance from expert recruiters, for example. Remember, taking out business finance when you’re starting out is a completely normal part of developing a business. Borrowing growth capital helps entrepreneurs become established business people who can provide job security to employees.
How do you know when it’s time to recruit?
There are a few tell-tale signs that you may need to start recruiting. These include:
- You are turning work down because you or your current employees don’t have time or capacity to do the work
- You are working all hours of the day and still don’t seem to get everything done
- You’re asking too much of your current staff
- You are unable to offer flexible working to staff who need it
- Plans for staff developments and training are falling by the wayside as you have no time
- Your customer service standards are falling because you have lost control of your processes and standards are slipping
If these indicators are familiar to you, why not take someone on? If your business is profitable and growing, you should be able to secure the funding needed to help pay for extra staff who can take your business to the next level.
Using unsecured business loans to fund your first recruitment drive
Taking on staff for the very first time is a daunting task for anyone. Many of us are used to working for ourselves, with ourselves. Colleagues are something we left behind long ago and managing people is an entirely new skill to learn. You’re not the only small business owner feeling this way, and we’re here to help. Here’s are some practical tips to help you use your unsecured loan cash in the right way during recruitment:
Do some research to make sure you’re offering the right money
It’s tempting, when you start recruiting, to decide how much you will pay your recruits based entirely on your budget. However, that’s not all you need to take into account. Alongside your budget, research the going rate for the type of role you are advertising and understand that you will pay more for someone with more experience. If you’re taking out an unsecured business loan to help pay your salaries, it’s important to establish a realistic level for your salaries that will allow you to attract quality applicants. Adjust your loan amount to reflect the realistic costs of taking on staff who will benefit your business.
Consider what you can offer for free
On top of the salaries you’ll need to pay, a good way to attract quality applicants is to offer perks and benefits. Perks don’t have to be expensive, like bonus schemes and health insurance, they can also be simple things like attractive workspaces, flexible hours and free lunches. If you are able to offer perks like this, make sure you mention them in your job adverts to provide low-cost incentives.
Work with a recruiter
Directing a portion of your unsecured business loan to pay for the services of a professional recruiter can help you find the right employees fast. Working with a recruiter means savings time and, potentially money, that could be wasted on sifting through piles of CVs, interviewing and taking on the wrong people. Working with a professional can save you the headache and the heartache involved with making recruitment mistakes.
Value ambition and drive as highly as academic results
When you start the process of looking at applicants for a job you have advertised, remember that academic results and even experience, to some extent, are not the be all and end all. Look for signs that an applicant is hungry for their next opportunity but isn’t necessarily equipped with all the skills you are looking for.
Someone who has already filled a role like the one you are recruiting for may struggle to muster up the motivation to perform each day. Instead, someone who seems genuinely engaged with your business, your way of working and your industry, who is willing to learn and has a positive attitude, will likely perform much better.
Recruitment options explained
Taking on new staff doesn’t always have to be about recruiting for full-time, permanent roles. Take a look at the options below for more about taking on apprentices, part-timers and contractors.
Hiring permanent full-timers
Full-time employees can be the right options if you have the budget and the work to keep someone busy throughout the whole week, on an ongoing basis. Offering full-time contracts will improve your chances of attracting skilled workers with relevant experience.
Taking on full-timers requires a major commitment to paying a salary, which means having a significant budget available. If your business is seasonal and your income fluctuates significantly through the year, you may struggle to meet your salary commitments during the quieter times.
Part-time staff can help you fulfil your need for skilled workers if you have a limited budget. If the work available is reasonably constant, but doesn’t need to be done every day, this could be the right option for you.
Think carefully about taking on a part-time worker as opposed to a full-time worker. If your workload increases after a period, you may find yourself needing to take on another part-time member of staff and this will often cost you more than a single full-time employee.
Taking on contractors will give you access to highly-skilled staff without the commitment of employing someone. This means you are not committed to giving them work and paying a salary beyond the agreement in their contract, which will be agreed between you and the contractor before the work begins. You can use them for a particular project or for a specific period of time.
Contractors are often more expensive per-hour/day than an employee so if you feel you will need someone to do work on a permanent basis, consider taking on a full-time employee instead.
Apprentices are a great, inexpensive option for small business owners who feel they have the time to take a trainee under their wing. Training an apprentice can be a very rewarding experience and can produce a dedicated, loyal and motivated member of staff with the precise skills you need in an employee.
You have to have spare time and capacity in your working day to do a decent job of training an apprentice. It’s a commitment for the long-term and you have to make sure you find the right candidate from a generally unskilled group of applicants.
Remember, you can use unsecured business loans to help fund your recruitment drive. Whether you want to boost the cash available to pay for a recruiter to help you find that perfect candidate, or you need extra capital to pay the first few months of a new employee’s salary, an unsecured business loan can help.