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The Honolulu Advertiser

Posted on: Wednesday, December 10, 2003

SMALL BUSINESS
Firms often can save time, money by outsourcing hiring

By Caroline Lynch
The (Louisville, Ky.) Courier-Journal

 •  Outsourcing tips

Though experts suggest that small businesses should outsource at least some of their hiring needs, owners who do it themselves should follow some guidelines:

Create a structured interview guide. Asking different questions to different prospective employees can create legal troubles. Certain questions should be avoided. Applications must satisfy legal requirements, too. These Web sites might be helpful: www.shrm.org/hrresources and www.eeoc.gov.

Conduct background checks. Make sure applicants are who they say they are. Employers can run a check on the person's Social Security number through a credit bureau and check criminal records in their area. Some industries require certain pre-employment testing or screening.

Hiring family and friends can be more trouble than it's worth. It's sometimes hard to separate emotions from business. Be prepared to deal with issues of fairness and expect trouble when correcting problem behavior.

Have a clear idea of what purpose the employee will fulfill. Hire someone who knows the job requirements and can meet them.

Don't waste time recruiting in the wrong place. To find the best candidates, consider where they might look for ads.

— The (Louisville, Ky.) Courier-Journal
LOUISVILLE — In companies not big enough to have a full-time human resources person, hiring responsibilities often fall on owners with little or no human resources experience, said Michael Ashcraft, director of the Small Business Development Center.

Many don't recruit employees and scramble to squeeze hiring in between other duties. Sometimes that leads to hiring the wrong person, or worse, legal trouble.

The answer? Get an expert to do it.

Ashcraft said human resources tasks can, and in many cases should, be outsourced. He suggests it for almost any small business that doesn't have enough human resources work to justify a full-time person.

"Most small-business owners just don't have the experience or expertise to do it themselves," Ashcraft said. "And if they make a mistake, it's a costly mistake."

Steve Kraus, president of Human Resource Advantage, said owners, or the person in charge of hiring for a small business, spends a quarter of their time on the process. He said outsourcing can give that time back at a price that makes it cost effective.

Businesses might spend $7 to $15 a week, per employee, on outsourcing. But the range could change depending on the number of employees, the number of locations and how many services the company needed.

At the least, Kraus said, companies want background checks on potential hires. Others want the agency to recruit and hire, write employee manuals, advise on employee needs, and take care of other administrative duties, such as payroll.

Small-business owners trying to hire on their own, he said, don't understand that recruiting is a process, and to get strong candidates they have to look in the right places, know how to analyze résumés and applications, and decide how they are going to conduct interviews.

"Too many times, the small to midsize employer does warm body hiring," he said.

Audwin Helton, president of Spatial Data Integrations, a digital mapping company, has outsourced recruiting and other human relations jobs. He uses Career Resources Inc., a nonprofit organization that helps both businesses and job seekers, to help him with his 33 employees.

"They learned all about my company, what we do and what the requirements are," he said. "Plus they know me and how I like to manage. It's time, peace of mind and knowing that I'm working with a company I can trust. ... Anything HR related, if I can't handle it, my call goes out to (them)."

Kraus said many small-business owners still rely on word-of-mouth referrals or hire friends and family.

Ashcraft said small-business owners should know that hiring friends and family could end up being as troublesome as hiring strangers.

"You might be sure you can trust them, but that doesn't mean they are going to be a good employee," he said. "Be very careful. The family or friend relationship can be more of a hindrance than a help."

Some people, for example, might treat their friends and family differently from other employees. Even the perception of unfair treatment can cause disagreements among employees.

Small-business owners should understand what attracts employees to them and then capitalize on it, Ashcraft said.

Employees at small businesses tend to perform wider ranges of tasks than those at corporations, he said, and many workers like being a part of something that the owner is passionate about.

"Those first couple of employees are key hires," Ashcraft said. "They are often the people who help an employer grow the business."

But Ashcraft also said that outsourcing doesn't mean a small business gives up all of its hiring decisions.

"Never allow anybody to make the final decision on who to hire, without having that person's supervisor or peers in on that decision," he said. "You can outsource 95 percent. But you still own the company."