- Talent Management
It’s an all-too-common scenario for small businesses: You feel like you don’t have the budget or expertise to make sure you’re hiring the right people, but it has to be done so you do your own research and wing it. Maybe things turn out all right in the end and maybe not. People who have been through this scenario know something all too well: In hindsight they would have done things differently. The hard lesson learned here is that few things are more important to the success of a small business than finding and hiring the right talent. Everything else hinges on this in the small company environment. And yet the scenario mentioned above continues to play itself out in thousands of small businesses all across the country – failing to invest in talent management.
The problem with winging it is that you almost always end up spending far more time and resources for less than optimal results. You would have been much better off tightening the fiscal belt and investing in talent management. More specifically, pay for hiring outside expertise to help with key talent management tasks. Hire a great recruiting agency to help you find the talent. Hire great consultants to help you create the systems your talent needs to be successful in their role.
I know this feels like a catch-22 since resources tend to be tight for small businesses. But all that really means is that you need to get as much bang out of each buck invested as possible, and there’s no greater payoff than finding and hiring the right talent and making sure the right systems are in place for them to succeed. And consider this: If you hire people who turn out to be mediocre, you’re going to need more of them to get the results you need, but if you invest in finding the very best employees, the A-players, you’ll need fewer of them to move the company forward. This effect must not be underestimated. According to the Society of Human Resource Management (SHRM), “…above-average performers contribute almost twice the value of average performers to an organization” (source). Suddenly it’s making a whole lot more sense to invest in outside talent management expertise to ensure you’re hiring those above-average performers, right? In the age-old quantity vs. quality debate, this is one area where it makes sense to lean way towards the quality end of the spectrum.
It is also worth remembering the difference between price and value. In a small business your eye is always on the bottom line, and rightfully so. But if that leads to every expenditure you make being based upon spending the as little as possible, you’ll find yourself far more susceptible to extremely poor outcomes. Remember that price is what you pay and value that you get. You have to think more in terms of paying enough to get the value you need. You have to smart about how you spend, not just cheap. Think of your expenditures more as investments and what kind of return on investment (ROI) you’re going to get from wise spending.
Yes, you can develop your own hiring process in-house and handle it all yourself, but unless you’re a talent management expert, all that effort is probably still going to result in acquiring below-average talent. This is when investing in outside talent management expertise makes perfect sense. And yes, on top of that you’re going to have to be prepared to spend more on compensation to be able to attract top talent that would otherwise end up at larger companies. Just remember the ROI effect and how much more you get (twice the value) from above-average performers.
Although finding the resources you need to make an adequate investment into talent management can make you cringe, it’s one bitter pill that has a mighty sweet aftertaste when you start realizing the huge payoffs from finding and hiring the very best talent.