People | Feb 2

How to hire employees on a budget

People | Feb 2

We spoke to experts for advice on cost effective ways small business leaders can expand their workforce

Dan Martin Small business journalist, event host

Reading Time 5 minutes

Use free or low-cost platforms to advertise

There are various low-cost options for advertising job vacancies or connecting with potential staff.

Social media can be a useful tool. As a professional network, LinkedIn is most suitable. You can pay to use LinkedIn’s job recruiting services which offers benefits around visibility, but you can also use it for free by posting on your profile.

‘Everyone wants to help their connections find work so asking for referrals on a social media post, if the platform is one of high engagement, can fill opportunities very quickly’, said Help to Grow: Management mentor, business strategist, and coach Alex Coward. ‘I have filled several roles for clients through this method this year alone’.

You can also use social media to demonstrate what it’s like to work for your business and attract candidates interested in your company culture.

Lucy Alexandra Spencer, founder of Education Boutique and recruitment director at Eteach said: ‘LinkedIn is powerful when you use it to tell the story behind the role and the outcomes your team enables, not just a job spec. Instagram and TikTok are effective when you show behind-the-scenes reality, and the human moments that prove your culture.

Help to Grow: Management alumnus and Adaptive Accountancy founder Brad Walker is also a great exponent of using LinkedIn to showcase the business’s culture to potential employees. Whether it’s posting photos of regular socials, the office dog, or their unique approach to core hours, he successfully communicates the Adaptive Accountancy values and what it feels like to work for the business.

‘Local Facebook groups have been incredible for us when we contribute, build trust, and then share opportunities with clear details.’

Other places you can promote jobs are job boards, such as Indeed, Jobsite, and Adzuna. In all instances it’s worth thinking about who will carry out the first review of applicants as job boards can often attract tens if not hundreds of applications. Lucy Alexandra Spencer also offers the following tips:

‘Your website careers page, Google Business Profile, and Glassdoor page matter more than people think because serious candidates use them to validate you. We have also seen huge positives with local university careers services which you can join for free and are subsequently invited to in-person career fairs for a small fee.’

Set up an employee referral scheme

Another cost effective way to recruit is by setting up an employee referral scheme. This involves allowing existing staff to recommend people from their network in return for rewards such as bonuses and extra days off work.

Key to a successful scheme is making sure you get quality and relevant recommendations, Alex Coward advised. ‘Make your company a place so enjoyable to work at that people want to bring their friends and contacts in, and at the same time, make the standards high enough that they do not simply refer anyone and everyone to get a commission fee.’

The referral scheme should be straightforward, with clear and transparent eligibility, and provide useful and time sensitive rewards that recognise the effort.

Lucy Alexandra Spencer said: ‘The best referral programmes reward behaviours, not just hires: referrals that lead to strong shortlists, successful probation, or hard-to-fill placements. Most importantly, you should feed back quickly. Nothing kills referrals like silence or long waiting times. If you want your team to be your recruitment engine, treat every referral like trust is being loaned to you, and make sure you repay it with professionalism.’

Communicate your values

While you might not be able to compete with big businesses on large salaries, your values as a small business can be a powerful recruiting tool.

Communicating the benefits of working for a small business will appeal to many people. Advantages include faster career growth, a diverse range of responsibilities, a more flexible and personal working environment, and direct access to company leadership.

You can also offer appealing non-salary benefits such as flexible working, mental health support, and financial planning services.

Alex Coward said: ‘Building a brand on social media that attracts clients and employees is what will put businesses ahead of their competitors. The key is in showing personality and values, not just telling people what you think they want to hear. Showcasing unique brand values that actually tell you what it’s like to work at this company will help companies stand out from the crowd.

‘Talent is attracted to more than just the biggest salaries, particularly with millennials and Gen Z now making up most of the workforce. They are attracted to companies who do good in the world, to companies that respect their autonomy and expertise, and that use methods of motivation that surpass the carrot and stick methods of the past.’

Lucy Alexandra Spencer added: ‘Small businesses can compete with larger brands by leaning into the things bigger brands often cannot do quickly or authentically: personalisation, pace, autonomy, and belonging.

‘Big brands sell perceived security. Smaller brands can sell something more compelling: ‘You will be seen here, you will be supported properly, and the work will matter.’ When you are niche and unapologetic about your standards, you stop competing for everyone and start attracting the right people.’

Access government incentives

There are various government incentives to help with the cost of recruitment and employing staff. They include:

Employment Allowance: this allows eligible employers to reduce their annual National Insurance liability by up to £10,500.
Small Employer’s Relief: eligible employers who paid £45,000 or less in Class 1 National Insurance in the last complete tax year can reclaim a higher percentage of statutory parental payments.
Apprentices: in England, the government will pay 95% towards the cost of training and assessing an apprentice. You might also be able to get up to £2,000 to support your apprentice. Scotland, Wales and Northern Ireland also have arrangements for supporting employers to access apprenticeships.
Grants: there may be other grants you can access to support your recruitment. Check your local council’s website and the government’s ‘Find a grant’ service.

In the UK, a single bad hire by an SME can cost anywhere from 1.5 to 4 times the annual salary of the position they are hiring for. With the margins being tighter than ever, this is a cost that small businesses can hardly afford. Looking at the alternatives, now is the time for SMEs to implement an intentional hiring strategy that goes beyond a generic job spec. If business leaders want quality, they must demonstrate why their business is a quality place to work.

Dan Martin Small business journalist, event host

Dan Martin is a freelance small business journalist and event/podcast host with over 20 years of experience. He is currently the editor of SMEWeb.com and the host of the Small Business Sessions, the podcast by business network Enterprise Nation which has run for nine series. Dan also works with Bristol Creative Industries, the not-for-profit organisation that supports the city’s creative sector.

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