Recruitment in SMEs

Kate Dosanjh: I started doing my master’s degree in Arthurian literature and I had been accepted to do a PhD to further that along but I needed the cash so I literally rocked up to Colin's office one day said, “I'm going to be amazing for one year and then I'm off. I have accepted this PhD I'm going.” And that was six people at the time and then there was me the administrator and then the financial professionals.

After one year I kind of loved it but said, “I can't go from PhD to typing so we need to figure something out,” and then he said, “Okay we’ll find something you enjoy.” So I did the CIPD qualification through University of Westminster and then kind of organically we just grew. It was amazing. It was, like as I said, six people, and now we have about 55.

Philippa Lamb: And this is 11 years on?

KD: Yeah.

PL: Okay and your role now?

KD: My role now is officially operations director but I have like an HR slant and so I now have an HR assistant who helps me with everything, which is amazing, and I am hoping now to kind of manage the managers, make sure we’re doing what we’re supposed to be doing and continue the vision of growth.

PL: Inspiring isn’t it? That was Kate Dosanjh and her story of swift career development in a fast-growing small company. Two thirds of the UK workforce are employed in SMEs so it’s little wonder they’re known as the growth engine of the economy but for SMEs like Kate’s, which is a small media accountancy specialist called C.C. Young & Co, recruitment can be a challenge. Lack of funds to launch effective recruitment campaigns, the stiff competition from bigger companies for the finest candidates, and of course the difficulty of providing more comprehensive employment packages and development opportunities, to name but a few.

So that's what we’re focusing on here, how SMEs can think innovatively about attracting, recruiting and of course retaining the best talent.

Emma Bridger: There may not be a career path in the way that there is for a large organisation but what there is the chance to be part of making something grow and being part of making something successful

PL: Emma Bridger is managing director at People Lab. She's an award winning internal communications and employee engagement specialist. Emma’s got to double here in our podcast today because People Lab has just four employees meaning that she's not only working for SMEs but she's running one herself.

EB: It’s not the same as working for a large corporation and I've worked in both. I think it’s really about being very explicit about the benefits which are - you'll really be a part of making this company successful and grow; you'll really connect to the bigger picture. Which is all great for engagement. You'll probably have a hell of a lot of autonomy.

PL: You'll be very visible.

EB: Be very visible but some of the perks that go with the large organisations are the benefits that you get, you won't get a lot of that; gym membership, whatever it might be; free fruit, but it really depends on the individual’s own aspirations and own values and what it is that they want from their career.

PL: So for Emma being up front about the employer proposition is step one. SMEs often lack the time and internal resources needed to adequately manage the recruitment campaigns and the cost of recruiting is significant for smaller companies which may not have the means to pay recruitment agency fees. Social media and recruitment agencies do have their place and many use them but word of mouth is a key tool as well. The prerequisite for this to work well – engaged employees.

EB: Engaging your employees is playing a bigger and bigger part in terms of being able to recruit the right people. What I mean by that is sites such as Glass Door.

PL: Glass Door? If you haven’t heard of it think of it as Trip Advisor for employees wanting to know the truth about what an organisation is really like to work for.

EB: And meaning that how it feels to work in a company is way more transparent than it ever has been before. So when candidates with talent are out there looking for new roles or looking for companies they might want to work with it’s now easier than ever to find out what it’s really like inside an organisation and I think that's only set to get bigger and louder and stronger. And so I think getting employee engagement right means that you've got employees out there, previous employees out there, talking about what a great place your company is to work.

PL: C.C. Young has a great reputation among young accountants but the transparency asides like Glass Door is still pretty scary.

KD: I've looked up Glass Door but I haven’t actually seen us appear there yet.

PL: How do you feel about that?

KD: Well I was wondering should we open that door, that Pandora’s Box, because if you encourage people to know about it then who knows what they’ll say. I guess you strive to be the employer that they hope you are.

PL: And you have to accept the good and the bad?

KD: Yeah and then you have to be able to say, “Okay fine,” take it on the chin and fix it.

PL: Certainly at C.C. Young, Kate’s boss, Colin Young, who established the firm in 1998 has consciously fostered high engagement by making sure that employees at all levels do feel valued.

KD: Ever since I very first started, because I was the only administrator at the time, it was never us and them, the professional staff are more important than the support staff or less than, it’s always been like everybody supports, if we didn’t have those guys doing every role then we wouldn’t have the whole team together.

PL: And that's a big, big change from the big accountants isn’t it where it’s not like that at all?

KD: No that’s very true. And he came from a City background and so I think maybe he saw that demarcation where it was that the support staff were thought of as less than at the time.

PL: And it was demotivating for them?

KD: Very much but then also the only thing they had to do was they rebelled against it. So they kind of had a lot of sick days, they had a lot of attitude and they weren’t helpful because they thought, well that's the only control they had over their role. And so I think he felt the negative side of that and thought, ‘Well if I can flip it and say, actually you guys are way more important than all the accounts assistants put together, if the person who’s at reception doesn’t turn up well I don’t get the message I don’t get the phone call from the clients.’ So anyway he makes everybody feel important.

PL: Which is great for engagement. Here’s Emma Bridger

EB: It goes back to something called self-determination theory, getting a little bit technical here but basically the sort of facets of autonomy, mastery and purpose. So all of the work that I do across organisations, hundreds of organisations, of every shape and size, those are really the key themes that come out time and again in terms of what people want to be engaged at work. So they want some sort of autonomy which links to concepts such as job-crafting. They want purpose, they want to feel like there's a reason for them dragging themselves into the office every day and doing a great job.

PL: Your pay cheque?

EB: Absolutely and they want mastery. They want to feel like they’re progressing and they’re developing. And time and again organisations get caught up in the hygiene factors and they say, “Well we’ve got fantastic pay, a great benefits package,” but actually that's not the stuff that's really going to engage people.

PL: And the engagement stuff draws people to the organisation in your experience, you really see that?

EB: Yeah definitely. Especially with the kind of Millennials or GenY, whatever we want to label them coming through now, they’ve got quite different expectations about work. They want a much bigger say in the way they work. They want much more autonomy in my experience. They want to feel that they're progressing: they might not be in your organisation forever but they want to feel like they are moving towards something.

PL: So for SMEs there's a potential virtuous circle here: engage your employees and they will go out and tell the world how great their workplace is and more excellent employees will come knocking at the door.

EB: It’s a real opportunity for SMEs that haven’t got the budgets to bring in, as I said, highly expensive employees of brand agencies, not that they all are, but you know what I mean, to really use the power of peer to peer communication and using the kind of people ‘like us style of’ communication that we know increasingly is who other people trust.

PL: Kate is prime example of how home-grown talent can add enormously to a business. She's got a sense of ownership of the organisation which makes her highly engaged and motivated but what does home growing talent, as opposed to hiring in, add? Here’s Emma.

EB: When you’re a small company, in my case a micro organisation, there are four of us directly employed, every hire is critical, you can't afford to get it wrong and I have got it wrong in the past and learnt a lot of valuable lessons from that. So it’s absolutely critical to bring in the right people first of all and then to develop them as part of the business strategy, as part of the business growth: both people that are directly employed and associates as well. I have to practise what I preach, if I don’t get it right with my people I can't really go and talk to other companies about how to get this right, so a huge fan of investing time, energy and effort in home-grown talent.

PL: Research tells us there are some fundamentals to attracting and recruiting the best candidates. The first of which is having that attractive, but realistic, employment proposition that Emma just talked about. The second is designing a recruitment approach that looks for cultural fit rather than just technical skills. Why? Because one bad recruit can have a serious impact on a small organisation. Kate has her technique nailed.

KD: I try and employ like a coffee shop type interview. We sit around the table, I make them feel very relaxed and by like question two they’ve left the preparation behind and we’re just two old friends, swapping stories, having a chat. And then that helps me know whether it’s a good fit. Once we get through that stage we have a technical assessment to see whether they have the acumen to do the numerate side of the role.

PL: And what is a good fit?

KD: Well a good fit for C.C. Young & Co is probably quite relaxed, keen for learning, everybody in our office, whether it’s support staff or accountancy, we encourage learning and development. We say, “Go on courses, do things that you enjoy. We’ll help fund it.” Because we think if the people are happy then obviously their production is going to be a lot better.

PL: Robinwood Activity Centre is another small business offering residential activity courses like archery and canoeing for school groups aged between 7 and 11 years old. They actively promote from within so most employees begin in the role of group leader. So it’s extra important that the right people are recruited in the first place. Anna Rogers is the HR Manager there.

Anna Rogers: We invite everybody to come to the centre in Todmorden for a weekend. We put them through their paces in a range of activities. So teambuilding, we send them off our trapeze and leap of faith and they jump off it. We put them on the spot and get them to do a discussion to see how they fair when they’re challenged on beliefs. We ask them to talk to aliens. So we really ... the skill of talking to aliens obviously is not a key one to our role but it’s...

PL: Yes it’s a new one to me but...

AR: It’s resilience and positivity under pressure. For us it’s not having experience is useful but not essential, qualifications are not important, it’s being the right fit with the organisation, somebody who’s got the potential to develop is hugely more important to us than somebody who knows how to do climbing when they come.

PL: Robinwood faces a lot of competition when it comes to attracting top staff and focusing on raising current staff engagement is one of their most effective tools.

AR: A big thing for us is staff engagement for sure because typically our organisation is in a fairly low paid industry, we pay the staff as much as we possibly can afford to but...

PL: It’s not a big salary role.

AR: ...it’s not a big salary role, it’s not a job people do for money, it’s a job they do because they really enjoy it and for us it’s about sustaining that enjoyment. So you come in and we find the staff are really, really happy when they first start and then after a while of doing the job they get a bit less happy with it and we’ve really been targeting that kind of continued involvement and continued engagement.

PL: To attract the right sort of person, one who fits with their culture and is likely to stay with them for longer, Anna and the team have been making some changes to their employee proposition and their recruitment strategy.

AR: So it used to be typically we would target university leavers, people who have worked at other activity centres, we advertise through all the traditional like E4S and holiday-type job boards and it was very much young people moving to the area to take up the role. Now we’re advertising a lot more locally. We’ve increased the starting wage as much as we possibly can so we’re getting slightly older staff now. So the average age has probably gone up by maybe five years in the last few years.

PL: So this is people you’re appealing to now who are already settled in the area where your centres are already settled in the area where your centres are?

AR: Yeah certainly.

PL: Do you offer accommodation?

AR: We don’t, we used to, that's the other key thing that's changed that we used to but we stopped doing that two years ago. Staff are just that much happier if they have their own houses so they live in smaller groups with people they have actively chosen to live with which all adds into creating that feel of that it’s a more grownup job, a proper job as opposed to just a summer out and that's what we’re really trying to develop is a proper job that people will stay with us and progress and take the opportunities that we provide.

PL: And this paying off, more people are now seeking Robinwood out because they’ve heard what a great employer it is.

AR: One of the reasons then come to us is that we are seen as a better employer than some of our direct competitors. So typically some of the organisations that we compete with our staff will work with them first, a year or so, and then they’ll hear about Robinwood and hear that we’re good to work for.

PL: So what do you do better?

AR: The most basic thing is that we employ staff on permanent contracts and a lot of our organisations very much do seasonal work and apprenticeships. We want staff to stay with us, to develop a career with us, all of our staff are promoted from within, apart from in very key technical roles such as chefs and IT – everybody else employed within the company starts as a group leader so there's opportunity to develop a career and specialise in an area in management.

PL: And if proof were needed that these efforts are paying off Robinwood has won a place in the Sunday Times 100 Best Small Companies, in both 2014 and 2015.

AR: The 100 Best Companies is opened up to people, made people more open to us when they’re reading our adverts and catching sight of us that way. We’re noticing maybe more people coming through non-traditional routes who have seen the 100 Best Companies so that's been really great as well.

PL: Ah that is interesting isn’t it? So how are they different?

AR: Less experience in the industry and that's great because if they’ve got that aptitude and that kind of potential it brings something different to our staff team. One of the things I've always been most proud of and most impressed with about Robinwood is the fact that the staff team is so diverse and that everybody fits, you don’t have to be loud and singing and dancing and have worked with children as an instructor for years you can be a quieter storyteller who’s been a teacher or, you know at one point I remember looking round the staff room and we had somebody who was a forensic scientist, somebody with an engineering PhD, a nurse, a teacher, you know there's just such a diversity.

PL: But many candidates wouldn’t dream of joining any organisation unless it offered career development especially younger candidates looking for a varied career. But less than 40% of organisations with fewer than 50 people even have a development budget so how can SMEs compete against bigger organisations in this war for talent? Well here are some bright ideas and first up here’s Kate Dosanjh.

KD: One of the things we really try and focus on, and it came organically but now having thought about it it’s really like a policy that we have, is to create a path of progression, to have a trajectory and a clear vision for where people can go. We have this Generation Y who’s jumpy and they want to go from one thing to the next thing and they want to feel like they’re progressing, which is fine and I understand that, but what we’ve tried to do is foster that within the company and we’ve found that with our competitor companies, the feedback we have anyway, is that there's this very flat hierarchy so you’re an accountant and you're the director and there's not much in between. So what we’ve tried to do is develop some levels where we’ve said we have an accounts assistant, the accountant, team leader, senior manager, possible partnership. And really even if you did one of those every one year it would give you five years’ worth of time to be at the company, which these days is quite a long time.

PL: Learning and development can be expensive as Kate knows only too well.

KD: We have no budget for it. So how it works is that we have a lot of internal speakers where they come from people who we know in the industry, so what we've done is call on those favours, they come and have a chat and we do brown bags or internal seminars, it makes people feel like they’re being invested in.

PL: Internal knowledge sharing events like those are a great cost-free option and free online L&D courses are on the rise too, you just need to know where to look. Here’s Emma Bridger.

EB: There are so many opportunities out there. I mean I discovered recently for example, well I say recently, a couple of years ago, that MIT run fantastic free online courses, MIT! And I think well why doesn’t everyone know about this? It doesn’t have to be hugely expensive there are so many creative ways that you can do that and invest in your people and develop your people that isn’t hugely expensive and involves sending them all to Cass Business School MBA or whatever it might be.

PL: At Robinwood every employee starts as a group leader doing the job on the ground which gives all of them an understanding of the product their business offers and employees grow from there. But where upward promotion isn’t possible SMEs need to consider other developmental opportunities so Anna’s recently spearheaded the design of a new management training scheme for employees.

AR: We’re struggling to have the kind of amount of really top quality people coming through that we want so we’ve developed a management training programme. We’ve made it as varied, as interesting as we can and we’re getting it accredited by the ILM so they’ll come out of it with a certificate as well so it’s an external accreditation. So for them it’s another CV kind of point.

PL: And these measures are having a big impact on retention. AR: The average length of service for a member of our staff is three years as a kind of ballpark figure, and that's compared to our rivals where they do a year, is quite a big thing. The average length for managers and senior staff is probably around about eight years at least. So the people who are progressing really to the top levels are really staying with us long-term and then three years for people doing the group leader job is a good length of time.

PL: SMEs tend to employ fewer younger people than larger organisations and undergraduates often say they feel that a larger company might be a safer bet for their first job but working for a small business does have big benefits, you can learn more skills, develop at a quicker rate, receive earlier responsibility and of course stand out in a small company. 80% of the C.C. Young workforce is under 30 and according to Kate the size of the organisation is actually a big draw for their first jobbers.

KD: A lot of the times I think the team aspect of a small company might be really attractive to young people. PL: Quite reassuring?

KD: Yeah and similar to what they’ve been experiencing before in college and in university that they’ve gone from their course and their group to another group of people who are similar to them.

PL: So it’s a direct advantage over some of the huge, huge accountancy practices that you don’t go there and feel completely isolated, or one of 200 who have arrived at the same day?

KD: That's right or pigeonholed into a very specific niche area. So sometimes people go into audit straightaway and then that's all they know. And then you come back and we get these candidates coming to us, they're ACA qualified, they’ve done audit for however long at the big four and really they don’t even know how to put a set of accounts together because they’ve never had to which is for us, you know we go from the ground up, you get the whole spectrum and then if they decide they want to go big then that's not something we can compete with and they can go out into the world.

PL: C.C. Young has also recently started taking on placement year students.

KD: They come to us for a year. It’s effectively a year-long interview and then they go back into their final year then and they can come back to us. We haven’t yet had the return person because we’ve only done it a couple of times but we’re very keen and we feel that they're full of life, they're very excited about working in London, and they actually get to be part of the team, not just an intern who files and does photocopying.

PL: And you think they will come back to you?

KD: Yeah we’ve had some good feedback that they would and obviously we have said to them, “If you do, your chances are really good we’re going to hire you.”

PL: One of the reasons there aren’t as many fresh graduates in SMEs as in bigger companies is that smaller outfits have a quieter presence in university careers offices and the milk round and that means their opportunities are just harder for graduates to find. So forging links with the universities is a smart way to find new talent. Unfortunately too many SMEs do feel instinctively that that isn’t for them, Emma Bridger.

EB: Absolutely there is a lot of mileage in building on those relationships and I know that a lot of SMEs might think, ‘Well that's for the big boys, maybe not for me.’

PL: But the undergraduates are saying that the SMEs aren’t visible.

EB: Exactly, exactly and again going back to the sort of social/digital world I think that enables SMEs to be much more visible but from my point of view and I have links with the universities, we do research with a few different universities, partnerships with universities, so I think it’s looking at what is it that you want, what is your recruitment strategy, who do you want to bring in? And if universities are the right partners then just go out and talk to them.

PL: So reaching out rather than worrying about spending big money?

EB: Absolutely.

PL: And finally a word from Kate on what she feels the job at her SME, C.C. Young & Co, offers employees?

KD: I think they definitely feel part of the team and they know their place from the beginning – I can outline the importance of the guy who’s doing the filing and how that helped win the HM Revenue & Customs case ten years later when we pulled the box from storage and there was the document and how it’s not boring, it’s every day is new. It’s a music industry as well so that's helpful yes everybody likes that. But it is very much about like joining the team, being part of the team and then growing along with a business that's changing, growing and quite exciting.

PL: And that wins for you against the bigger salaries that other outfits could offer?

KD: It does yeah.

PL: The case for joining an SME beautifully articulated there by Kate Dosanjh. And you can join the conversation or share your own recruitment challenges and innovations on Twitter@CIPD using #cipdpodcasts. Thanks for listening.