How SMEs can overcome size and budget constraints to attract top talent

The world’s best managers believe that the fuel of superstar organisations is high-performance talent. In his seminal work, ‘Good to great…’, management guru Jim Collins wrote: “Those who build great companies understand that the ultimate throttle on growth… (is) the ability to get and keep enough of the right people.”

Apple’s legendary founder Steve Jobs also said in ‘In the Company of Giants…’: “A small company depends on great people much more than a big company does.” The reason for Jobs’ logic was clear: “A small team of A+ players can run circles around a giant team of B and C players.”

Unfortunately, A+ (or even A) players aren’t easy to find or hire. In most industries, the ‘cream’ of talent is notoriously hard to recruit unless you happen to be a prominent brand with deep pockets. However, the post-slowdown global economy has levelled the turf to some extent.

Hiring, especially at middle and higher levels, rises in high-growth environment. Given the current depressed growth, many large corporates have put off hiring at senior levels unless necessary.
Professionals, too, are ready to explore opportunities with smaller firms that give them greater exposure and responsibilities. To attract such high-performance talent, SMEs also need to be aware of what such people want and expect, since the pool of such talent is relatively limited.

SMEs have a natural advantage
While the size and resources of a small firm can be a constraint, they have certain other benefits that larger companies don’t. For one, SMEs provide excellent opportunities for ‘specialist’ executives to work across functions and take on greater responsibility in a relatively shorter span of time. This creates several avenues for professional growth and self-branding. Second, SMEs can offer much more flexibility in job role, compensation, working hours, location, etc.

Professionals who are tired of procedure-driven and formal, straitjacketed workplaces will find the lack of hierarchy and bureaucracy in smaller organisations to be a refreshing change. Third, small organisations can offer excellent non-monetary variable and equity rewards that can help get the best out of their people. Finally, promoters of small firms tend to work more closely with employees and there is a greater degree of mutual trust and goodwill. It is necessary for smaller firms to emphasise these benefits when hiring.

Here are some more ways in which SMEs can attract and retain top-level talent.

Don’t hire at the eleventh hour
Some of the best employers in the world are perennially in ‘hiring’ mode. They understand that performers can walk in through the door any time. Therefore, they anticipate the hiring needs for the year and proactively make it a point to recruit through the year for those positions. On the other hand, companies that look to hire talent only as and when needed may have to make compromises. Opportunities to hire good talent — for example, when a competitor is downsizing — can happen any time and it best to be ready to do so.

Use referrals and networks aggressively
Employee referrals are a great way for SMEs to get good people with relevant skill-sets. At the same time, the organisation must not spare any opportunity to speak about its employer brand and value proposition at business events, industry forums, etc, as this helps maximise the SME’s visibility among the right crowd. Social media also presents immense possibilities here. Connect with professionals on sites such as LinkedIn or Twitter, and track their activities to understand if they are contemplating a move and what might interest them.

Have a robust and interactive screening process
Once the employer has zoned in on high-performance talent, it needs to engage the candidate well in order to understand their priorities. Often, people whose achievements look good on paper may not be that great in person. In addition to an impressive pedigree, the employer must check for drive, attitude and the ability to take responsibility. At the same time, the employer must also find out what the candidate expects: in terms of compensation, job growth, equity, responsibility, flexibility and so on. Being clear on these will help the candidate survive longer in the job. 

Hire from Tier-2 and 3 schools
There is a tendency among many employers to chase degrees rather than candidates. The intense competition in the Indian education system has meant that many Tier-2 and 3 business and technology institutions also have talent in abundance. Going to some of these campuses is a good idea for SMEs looking to get bright young talent on a smaller budget.

Consider other modes of engagement
To save on employee costs, SMEs can also look at other ways to engage with the right talent. For example, they can go for a consultant or flexible staffing model, where the person is not on the company’s rolls and works on specific projects or is rewarded on the basis of deliverables achieved. A lot of retired executives and public servants have a wealth of knowledge and experience that SMEs can tap into relatively cheaply.

It is worth remembering that while attracting high-performance talent takes work, it is even more challenging to retain them, given that they have no dearth of opportunities. Small businesses should ensure that their ‘A-players’ are given all the tools they need to do what they do best: win.
  
The writer is senior director at Crisil SME Ratings