TAKING on new employees is one of the biggest challenges a small business will face.
Combined Small Business Associations of WA president Oliver Moon said labour costs were the most significant small business costs.
Besides the employee’s salary there are statutory costs such as sick leave, public holidays, workers’ compensation insurance and superannuation.
Hiring a new staff member can also be a risky proposition.
Dunhill Management Services general manager Bruce Henderson said making a wrong decision on a new staff member could prove costly.
Mr Henderson said it might be cost effective for a small business to use a recruitment agency as this reduced the risk of a wrong decision.
“The fees to recruit someone for a $50,000 a year position can range between $6,000 and $8,000.
“However, the real cost of a new employee for the first year can be roughly double the base salary.”
Mr Henderson said small business owners had to be certain of their business plan and where it was taking them in the next 12 to 24 months.
“You have to ensure the business can absorb and sustain that new employee,” he said.
“You need to be sure of what is expected of the new employee. Measure the key competencies against the role and make the decisions based on the objectives of the job and the outcomes expected.
“I would suggest the small business owner involves more than one person in the recruitment process.
“Give enough time to ensure there is a good recruiting process. Document it and follow a system.
“If small business owners don’t feel they understand the recruitment process they should search within their management team for someone who does.”
Small Business Development Corporation acting managing director Bruce McFarlane said the SBDC could help small businesses recruit staff.
“We have a team of enterprise development officers to provide guidance and plenty of information on recruitment in our Business Information Centre,” Mr McFarlane said.
“We also work jointly with the Department of Productivity and Labour Relations if required.”
Employment information can also be found on the SBDC’s website at www.sbdc.com.au or at www.biz.gov.au – the Federal Government’s Business Entry Point.
Mr McFarlane said the SBDC advocated employers used workplace agreements as opposed to Awards when signing on new staff.
Mr Moon said workplace agreements removed a lot of the baggage that came with Awards.
