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How to Hire Good Employees for Small Businesses

person looking at her laptop trying to find good employees for small businesses
In large organisations hiring is a relatively routine activity, and getting individual hires wrong represents but a minor inconvenience. For smaller employers, every single hire is considered high-stakes, as every employee contributes significantly to the wellbeing of the organisation. This means that hiring good employees is a particularly mission critical activity for small businesses, as the cost of failure could literally mean the collapse of the company. With this in mind, what steps should small businesses take in order to hire good employees, and thus mitigate this risk?

This article will outline four key strategies designed to maximise the quality of hire, and ensure that small businesses can hire the best possible employees available to them.

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Source as Many Candidates as Possible

It is no secret that the largest employers tend to hire the best performers. This isn’t because larger employers utilise more effective selection processes, it’s simply a numbers game. If you want to hire the top 1% of candidates, that means you need to evaluate 100 candidates for every 1 hire, requiring a huge applicant pool. For large employers, especially when hiring emerging talent, these ratios are quite achievable, and thus they readily identify the cream of the crop. For small organisations however, who lack the power to attract thousands of applicants, building a large candidate pool can be tough. Nevertheless, smaller organisations must do everything they can to cast a wide net, and attract as many potential candidates as possible, maximising the probability of eventually reaching those great employees.

Use a Wide Range of Assessments

Because smaller organisations typically work with smaller applicant pools, this means that differences between candidates on important skills, traits, and abilities tend to be less pronounced. As a result, you will need to test candidates far more thoroughly than a larger organisation would, ensuring you can meaningfully differentiate between applicants. With smaller applicant pools, you can’t simply rely on high-pass marks to identify those top performers, and instead will need to evaluate candidates as holistically as possible. This is by far the fairest way of assessing candidates, and minimises the probability of good employees slipping through the cracks. For example, a comprehensive assessment process could include personality questionnaires, aptitude tests (a combination, such as verbal, numerical, and inductive reasoning tests), and then interviews for shortlisted candidates.

Avoid Overreliance on Interviews

Traditional employment interviews are powerful predictors of performance. However, they have several key limitations which must not be ignored. Firstly, interviews are not short-listing tools, as they do not scale effectively with volume, and thus should only be used at the end of the process. Secondly, they are very limited in scope, only measuring communication ability and social skills. This is important to remember when assessing for resilience, industriousness, conscientiousness, or creativity, as these traits simply aren’t measured using interviews (although skilled interviewees could manipulate you into believing they can). Lastly, although highly predictive, interviews are less effective at predicting task performance than ability tests, and are less effective at predicting contextual performance than personality questionnaires. Therefore, you must not overestimate the utility of interviews, as high performance on an interview is not synonymous with being a great employee.

Don’t Settle for “Good Enough”

When managers are pressed for time, they may default to a “that'll do” strategy, and will hire the first candidate who meets the minimum requirements. Although this represents a time-efficient strategy, it will lead to suboptimal hiring decisions, as it will inevitably result in finding mediocre employees. Instead, small business should take their time with hiring decisions ensuring that a wide range of people are evaluated and only the best are offered positions. Naturally, this presents an opportunity-cost for hiring managers, who will need to spend more of their time interviewing, but this represents a relatively low cost considering the tremendous benefits of hiring good employees.


In larger organisations, whole teams of people exist whose sole focus is hiring good employees. Although this isn’t feasible for smaller organisations, it does highlight the relative importance of good hiring practices in an organisation’s overall strategy. Assessing and hiring good employees must be considered a mission critical activity in small businesses, and hiring managers should treat this activity with the importance it deserves. Therefore, it makes good business sense for smaller employers to dedicate significant time and resources to hiring the best possible employees, and those who follow this strategy will reap the benefits for years to come.

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Article by

Ben Schwencke

Ben is responsible for client delivery work at Test Partnership and usually serves as the main client of contact. He holds an MSc in Occupational Psychology and is a registered test user of ability and personality testing.

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