Small Business Owners Share 2017 Hiring Strategies
By: John Rossheim
What lies ahead for small business 2017 hiring strategies? The New Year poses a variety of uncertainties, from revenue growth to changes in the economic and regulatory environment that could come with a new president and Congress. In response, some companies are taking a variety of approaches to hiring for the New Year.
We spoke with a handful of sources who offered their thoughts on 2017 hiring strategies.
Despite optimism, companies are hesitant to hire. Some small businesses are taking a cautious approach to hiring in 2017, even if healthy growth continues. “Only 22 percent [of companies] expect to add employees, similar to 24 percent in the spring of 2016,” says the October 2016 PNC Financial Services Group survey of small and middle-market business owners.
When asked why, 28 percent of respondents planning not to hire say they will instead ask more of their employees. While that may be a workable strategy for near-term payroll savings, it may backfire in the long run as companies look to retain high potential employees.
Still, 71 percent of these business owners are optimistic about the economy, the most in PNC’s fall survey since 2005. This disparity may reconcile itself as the year progresses.
The postings will be there, but qualified candidates often won’t. In its September 2016 report, the National Federation of Independent Business found that “a seasonally adjusted net 10 percent [of businesses] plan to create new jobs” in the coming months. But nearly a quarter of businesses said they could not fill current openings due to a lack of qualified candidates.
Small businesses time their talent acquisition with care. In 2017, many firms’ hiring strategies include the tactic of putting off for as long as possible the upfront expense and ongoing payroll cost of hiring.
“Our technology is built, so we can wait until we sign deals to bring on more talent,” says Jana Eggers, CEO of Nara Logics, which applies artificial intelligence to data science. “We do big enterprise sales with long lead times. We’re starting to gear up this year for deals I’m planning on closing next year.”
Solid metrics yield better workforce plans. Small businesses increasingly are finding that a disciplined approach to metrics yields the most effective workforce planning. “We’ve kept clean, consistent metrics about clients, and how much talent it takes to serve them,” says Andrew Hsu, managing partner. Spotlight Analyst Relations had 16 employees in October, and was planning to staff up to 27 or 28 by year-end 2017, he says.
Professional services firms hire up as business only gets more complex. There’s great demand for services from new clients and additional demand from existing clients, says Alan Badey, a managing partner at accounting, tax and consulting firm Citrin Cooperman , a trend that will create demand for talent in companies of all sizes.
“Regulation and trends such as increased concerns about cybersecurity will continue to create an environment for businesses where they need assistance from outside experts,” Badey says. Citrin Cooperman has about 850 employees; “If we hit our growth plans, we’ll probably need 50 to 75 people in 2017.”
A strong dollar motivates firms to look at hiring abroad. Many small firms looking to expand internationally may give the notion a green light in 2017.
“Most companies are going ahead and hiring, and the dollar is so strong that companies want to take advantage of sales opportunities,” says Nicole Sahin, CEO of Globalization Partners, a professional employer organization that helps companies bring on their first workers in other countries. “So with Brexit, they’re in research mode, trying to figure out which countries to go into.”
Globalization Partners’ headcount is currently under 50, but “we expect to expand to 70 next year,” says Sahin.
When your clients expect results in a hurry. Like many small companies, clients of Globalization Partners expect the high-touch firm to turn on a dime. A small business owner typically wants to hire abroad on short notice, so her company must have the manpower to move quickly, Sahin says.
This is why Sahin believes it’s critical to maintain an active recruitment pipeline at all times.
Brexit raises questions about how to expand internationally. Uncertainties over the future of Europe will complicate hiring for small firms in 2017. “Some companies are considering Brexit,” says Sahin.
“Nobody knows how Brexit will go. But often if an American company hires their first person in Europe, they’ve often done it in the UK.” Instead, says Sahin, “they’re now looking at Germany, the Netherlands and Ireland.”