USA TODAY, June 21, 2006, Wednesday

Copyright 2006 Gannett Company, Inc.
All Rights Reserved
USA TODAY

June 21, 2006 Wednesday
FINAL EDITION

SECTION: MONEY; Pg. 2B

HEADLINE: 7 STEPS TO BETTER HIRING;
How can owners find great workers? Often, it's as simple as sticking to seven basics

BYLINE: Jim Hopkins

BODY:
The U.S. jobless rate has sunk to 4.6%. Competition for accountants and other highly sought workers is white-hot. Big corporations are beefing up employee benefits.
No wonder small companies are struggling to find workers: 46% of those surveyed last month said they found few or no qualified applicants -- up from 41% in April, says the National Federation of Independent Business. Last month's share was one of the highest in more than five years, the trade group said last week.
Heather Nolte knows all about it. The owner of a boutique baby-apparel maker near Austin got just 11 resumes after advertising for an administrative assistant. She got more than 100 a year ago for the same job advertised the same way. "Applicants are scarce," she says.
Small businesses often don't have a human resources department, so owners relegate hiring to their spare time -- but it should be their top priority. "Your most important function is to hire people," says David Ramp, a small-business counselor in Birmingham, Ala.
STEP 1
Write a job description
Job descriptions drive the hiring process. Yet, small employers rarely use them, says Eileen Levitt, founder and president of the HR Team in Columbia, Md., a consultant to small companies.
Writing a job description forces owners to review other jobs in their company that should be redefined. Maybe the receptionist has become the technology expert, even though there's now enough revenue to justify adding that work to a new position.
Descriptions also help owners set pay ranges, plan interview questions and evaluate the new employee's performance. Ron Zagel, president of Jonathan Stevens Mattress, a manufacturer and retailer with 38 workers based in Grand Rapids, Mich., uses a three-page description for sales jobs.
It covers the waterfront, from greeting customers "warmly and promptly within 60 to 90 seconds" to writing customer thank-you notes by hand. Zagel always has a lawyer review descriptions to comply with labor law.
STEP 2
Gauge the market
Learn what other employers pay in wages and benefits. See how many other companies are looking for the same skills. Know the basics. Ramp is "amazed" at how many small employers don't know the minimum wage or jobless rate. He is a counselor at the Small Business Development Center at the University of Alabama.
This is a good time to learn the full cost of a new employee: Social Security, Medicare and possibly workers' compensation costs. Attracting a qualified worker might mean starting to offer medical benefits that would extend to existing workers, too.
Looking for an accountant? They're in such demand now that you'll probably need to hire a headhunter. Sarbanes-Oxley regulations put in place in 2002 don't apply to small private companies. But the rules have created huge demand for accountants.
STEP 3
Outsourcing, anyone?
Tech work such as website maintenance is another hard-to-fill job. Yet, like accounting, it can be farmed out to companies specializing in helping small companies. "You just write ... a check once a month," says Brendan Courtney, a senior vice president at Spherion, a staffing company in Fort Lauderdale.
Indeed, the entire hiring process for any job can be turned over to a professional employer organization (PEO), which will also help train employees, write performance review forms and create medical and other benefit plans.
For example, Integrated Staffing, a PEO in Peabody, Mass., creates job descriptions and screens applicants. "Clients make the final decision about who to hire," says President Laurie LaBrie.
STEP 4
Spread the word
Tell family, friends, business associates and -- especially -- employees that you've got a job to fill. It's cheaper than hiring a headhunter or paying to advertise.
"Networking, friends and family are probably the best way to source good employees," says David Minor, head of the Neeley Entrepreneurship Program at Texas Christian University in Fort Worth.
Small employers also overlook job fairs and schools. In Rowlett, Texas, Techni-Tool found one of its best employees by talking to high school teachers when the industrial cutting tools distributor needed a bookkeeper. The Rowlett High School student Techni-Tool hired worked part time after school, proving his abilities until he started full time after graduation.
"Found a diamond in the rough," says Gary Turner, vice president of the 14-employee company.
STEP 5
Plan the interviews
List managers and other employees who'll speak to applicants. Write down questions to be asked. And make sure all applicants are asked the same questions so you can make an apples-to-apples comparison among candidates.
Small employers aren't always schooled in what interview questions are legal. An employer might wonder whether a young woman plans to have kids, or whether a mother has reliable daycare, says LaBrie. Instead, she says, tell the applicant that the job requires showing up each morning at 8, then ask, "Can you be here?"
Near Boston, BuyerZone.com has created a six-part interview process that would rival any big corporation's. Yet, the company, which matches buyers and sellers of business products and services, has just 49 workers. BuyerZone requires multiple prescreening phone interviews followed by face-to-face interviews and then reference checks.
STEP 6
'Sell' your company
Small businesses, competing against big corporations with blue-chip benefits, can fight back by promoting their own virtues. Take job security: Levitt says her small-business clients are less likely to lay off workers because owners know each employee.
Also, small-business employee health benefits are sometimes superior to those at big self-insured corporations. Small companies buy medical benefits that are subject to state regulatory mandates often requiring extras, such as chiropractic care, that self-insured corporations don't have to offer, Levitt says.
Nolte, the baby-apparel designer, doesn't offer medical coverage to her three employees at Glamajama in Kyle, Texas. She competes for workers by promoting other benefits: flexible hours, especially appealing for mothers, and a creative environment with a chance to learn clothing design.
STEP 7
Check resumes and references
Finding a qualified employee works only if the applicant really is qualified. Confirming resumes and references is a step that too many employers -- including big ones -- fail to heed.
The board at retailer RadioShack was surprised in February to learn from the Fort Worth Star-Telegram that CEO David Edmondson lied on his resume about two degrees from a Bible college. Edmondson resigned.
Levitt says she's seen it all when sifting through job applications sent to her small-business clients: Applicants lying about college degrees or disguising prison work as a real job.
"It's amazing how many things on resumes are manufactured," she says. "It's so prevalent, it's not even funny."
3 tactics may boost revenue
Small companies that hire and manage workers in three specific ways are more likely to boost revenue and profits, a university study out today says.
The companies had 22% higher revenue growth, 23% higher profit growth and 67% lower employee turnover than those that didn't use the preferred hiring and management tactics, says the study by Cornell University and the Gevity Institute, a human resources consultant near Tampa.
The 323 U.S. companies examined averaged 53 employees each and were in a range of industries. The tactics producing better results:
*Make sure job candidates fit the overall company culture, not just the job. If they don't, they're more likely to quit prematurely, increasing costly turnover.
This also is true at big corporations, says Christopher Collins, an associate human resources professor at Cornell. But a bad hire's impact is disproportionately greater at a small employer.
*Don't micromanage workers. Offer broad direction, then trust them to manage their time. Showing confidence in employees gives them a bigger stake in the business, so they tend to work harder, driving revenue and profits higher.
*Promote a "family" workplace culture. That boosts company loyalty, reducing turnover. For example, owners can take each employee to lunch. Or they could organize events drawing together all workers, so they get to know each other better.
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Blog about employment and more online
Join the conversation about hiring workers and other small-business management topics on our Small Business Connection blog at smallbizblog.usatoday.com. Posts you'll see this week:
"Monster and the other jobs sites work, but I think you end up hearing from many candidates who don't have the right experience."
--Debra Caruso,
DJC Communications, New York
"Unless you're Apple or Ducati, you need to think of your job posting as the place to sell your company's culture and potential."
--Steve Huot,
BroadSpire website designer, Los Angeles
Also online
*Get the latest news at www.smallbiz.usatoday.com.
*Are you an entrepreneur? Join our Entrepreneurs Panel at entre.usatoday.com.
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Small Business Connection
A monthly series about managing small companies. Earlier installments at www.smallbiz.usatoday.com. Got an idea? E-mail USA TODAY's Jim Hopkins at jhopkins@usatoday.com.

GRAPHIC: GRAPHIC, B/W, Marcy E. Mullins, USA TODAY, Source: Bureau of Labor Statistics (LINE GRAPH)