I run my own small manufacturing business. As you can imagine it has been a really tough few years, with the pandemic, energy costs and rising interest rates on my own mortgage.
The biggest issue I’m having at the moment is recruiting. I’m at my wit’s end trying to find people. We pay a good wage starting out, and while I employ a couple of apprentices I really need some more experienced staff.
I have looked at local recruiters to try and plug this gap but they charge a ridiculous commission which I’m not sure I can afford at the moment. I need the staff to try and grow the business, but I also can’t really afford to pay a big commission.
Should I suck it up and go to a recruiter or should I try and muddle through with minimal staff?
It’s harder than ever to find staff, is a recruiter worth it? Dave Fishwick replies
Dave Fishwick, This Is Money’s business doctor replies: There have been a whole range of challenges faced by businesses over the last few years, and I think that’s particularly true in manufacturing.
Even now, in these harsh economic conditions and with all the news about artificial intelligence and automation making workers redundant, I believe investing in people is the best investment a business can make.
Employees are still the most critical asset a company has. I think it’s fantastic that you’re taking on and training apprentices.
I’m a big fan of apprenticeships and think that far more assistance should be given to help employers offer placements on a national scale.
Here in Lancashire, a significant employer at the cutting edge of engineering technology invests heavily in apprenticeships, so they must find it worthwhile attracting young people before they go to university.
I am very keen on in-house training – choosing a successor from within many years before they are needed, and then slowly but surely training them to be ready for that future position.
I have a member of staff at my minibus business called Matt. He has been with me for more than eight years, and he has been trained by Mark, who was the general manager and was due to retire at 66 years old.
Mark retired last year after working for me for more than 20 years, doing a fantastic job, and Matt has now benefited from some excellent in-house training.
Matt now runs the business and is doing a tremendous job. If you can recruit from within and spend some quality time yourself training them up for the job, you will find that it will pay huge dividends in the future.
If you need someone immediately, recruitment agencies are an instant fix but carry tremendous costs.
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How to poach staff like a recruiter
If you had one silver bullet, which one of your competitors would you fire it at and why?
Borrow some of their best ideas, then approach some of their staff via social media. That is what the recruitment agencies will do, and you can cut them out of the scenario and do it yourself, saving enormous costs.
There are lots of avenues you could try before shelling out the recruiter’s fee, like searching and posting on Linkedin yourself, or using online job portals.
A word of caution about using recruitment agencies from personal experience.
You might find specific recruiters will come back and poach your members of staff back
You may find after just a couple of years, specific recruiters will come back and poach your members of staff back and move them onto the next business or a competitor paying more fees.
The agencies tend to stay in very close contact with many of the employees they have found employment for.
You could also try reaching out to relevant trade associations and place adverts in industry publications, try posting on local area bulletin boards and job boards like the CV library.
If you don’t have time to review CVs and applications personally, produce a list of ‘must have’ criteria and delegate the task of shortlisting applicants.
Try reaching out to your current employees to see if they know anyone with the right experience who they could recommend. It might be worth offering an incentive for a successful referral.
I have done this at Burnley Savings and Loans – the ‘Bank of Dave’ featured in the recent Netflix film – which has been very successful.
The other option you’re considering is to continue with your current staffing level.
If the business model is sound and the prevailing economic conditions allow, then the right employee will more than pay for themselves – but deciding when the time is right to take on staff might be a factor which depends on current and future economic conditions. Perhaps offering the existing team a little more money for working overtime may help.
Alternatively, you could employ some temps or outsource some of the work and then keep your in-house staff concentrating on the jobs that cannot be outsourced.
You should consider your year ahead carefully and decide if your order book will stand the additional overheads of new employees. Once you do take new staff on, that will affect your overheads and cash flow for many years to come.
It’s almost impossible to predict every aspect of the economy going forward. Still, we can look at prevailing conditions to help us understand where things may go in the short to medium term.
Consider if the same pressures your business has been facing also affect your customers, decreasing future orders. If you think this will happen, hold off on employing for now and consolidate to weather the adverse conditions.
If you are more confident in your outlook, then by all means, find the best people for you and go for the growth!
Finally, please bear one thing in mind that has served me very well over the last 30 years of employing some wonderful people. Look after your employees, respect them, and treat them as you would want to be treated if the shoe were on the other foot, and nobody will ever leave!