Ex: Organizational Chart 20-1c Sources of Employees To recruit effectively, the small business manager must know where and how to find qualified applicants. Sources are numerous, and it is impossible to generalize about the best pool in view of the differences in companies’ personnel needs and the quality of the applicants from one locality to another. Some of the more popular sources of employees among small firms are discussed in the following sections. INTERNET OPTIONS Small businesses are turning increasingly to the Internet to find the employees they need. A variety of websites, like CareerBuilder.com and Monster.com, allow applicants to submit their résumés online and permit potential employers to search those résumés for qualified applicants. And because the Internet opens up a wealth of connections to potential applicants, many firms are posting job openings on their own websites. Using the Internet for recruiting is convenient, but it can also carry some significant limitations and unanticipated costs. One small business owner posted a job opening that required a very specific marketing skill set. From that single listing, the company heard back from a slew of interested job seekers, “which included a U.S. Postal Service worker, a bench chemist, a talent agent, and a movie director ... none with the requisite skills.” The final results were very disappointing. In the words of the entrepreneur, “[From] the 141 applicants, we interviewed two and didn’t hire any. That cost me hours of my time and my hire manager’s time.”7 The point is that the initial cost of posting a position online can be low—sometimes even free—but that doesn’t mean the overall process will be inexpensive, and it may not even be useful in the end. Beyond these options, social media tools can be indispensable to recruitment efforts, and their use for this purpose is growing rapidly. According to a 2012 survey, 92 percent of recruiters use or plan to use social media and networking sites to find the employees they need. Of those who do, most (93 percent) will use LinkedIn, though many will also use Facebook (66 percent) and/or Twitter (54 percent). Their reasons for climbing aboard the social media bus are compelling. Many say that they find social recruiting to be more efficient and have concluded that it yields more applicants and higher-quality candidates.8 And as a result, many companies are choosing not to post openings on the job boards mentioned above, shifting increasingly to social media instead in order to save time, money, and hassle. SCHOOLS Secondary schools, career schools, colleges, and universities are desirable sources of personnel for certain positions, particularly those requiring no specific work experience. Some secondary schools and colleges have internship programs that enable students to gain practical experience in firms, which can be very helpful. Applicants from career schools often have useful educational backgrounds to offer a small business. Colleges and universities can supply candidates for positions in management and in various technical and professional fields. In addition, many college students can work as part-time employees. To achieve its goal of delighting its customers by providing superior construction services, Kay Construction uses a team approach, which would be impossible with- out high-quality staff. The owner of the company, Lorraine Kay, believes that it is necessary to support the local education system to “build a reservoir of appropriately trained and motivated employees.” So she works with nearby colleges to fine-tune courses offered to project management, engineering, and architecture students. By hiring some of the students as interns, the company gets inexpensive part-time help for the present and the inside track on offering them fulltime positions after they graduate. This approach has worked very well for the company.10 PUBLIC EMPLOYMENT OFFICES At no cost to small businesses, employment offices in each state administer the state’s unemployment insurance program and offer information on applicants who are actively seeking employment. These offices, located in all major cities, are a useful source of clerical workers, unskilled laborers, production workers, and technicians. They do not actively recruit but only counsel and assist those who come in. Until recently, the individuals they work with have been, for the most part, untrained or only marginally qualified. However, because of the sluggish economy, individuals with more advanced skills who have been laid off have been seeking assistance from their local state employment office. The role of such agencies is likely to become more important as time goes on, especially where the employment needs of small businesses are concerned. PRIVATE EMPLOYMENT AGENCIES Numerous private firms offer their services as employment agencies. In some cases, employers receive these services without cost because the applicants pay a fee to the agency. More often, however, the hiring firms are responsible for the agency fee. Private employment agencies tend to specialize in people with specific skills, such as accountants, computer operators, and managers. TEMPORARY HELP AGENCIES The temporary help industry, which is growing rapidly, supplies employees (or temps)—such as word processors, clerks, accountants, engineers, nurses, and sales clerks—for short periods of time. By using an agency such as Kelly Services or Manpower Inc., small firms can deal with seasonal fluctuations and absences caused by vacation or illness. For example, a temporary replacement might fill the position of an employee who is taking leave following the birth of a child—a type of family leave mandated by law for some employees. In addition, the use of temporary employees provides management with an introduction to individuals whose performance may justify an offer of permanent employment. Staffing with temporary employees is less practical when extensive training is required or continuity is important. EMPLOYEE REFERRALS Recommendations of suitable candidates from good employees may provide excellent prospects. Ordinarily, employees will hesitate to recommend applicants unless they believe in their ability to do the job. Also, the family and friends of current workers can be among the best and most loyal employees avail- able, because these individuals are well known and trusted. Many small business owners say that this source accounts for more new hires than any other. A few employers go so far as to offer financial rewards for employee referrals that result in the hiring of new employees. Scott Glatstein is often looking to hire skilled management consultants for his small consulting company, Imperatives, but he has not had much luck using standard recruiting tools. Not that he hasn’t tried! After using a variety of recruitment approaches, including Internet advertising, he found only one that yields the results he is looking for: recommendations from his 19 current employees. Glatstein estimates that he hires nearly all of his employees through referrals. Doing so saves money (costing around 70 percent less than advertising or employment agencies) and reduces turnover. But perhaps the most important advantage is that these new hires become productive in less time and tend to have superior skills. Glatstein pays $300 for each referral hired. But if $300 would be a budget-buster for your company, adjust the figure down or use a different incentive. You may very well end up with the same result.12 Hiring based on referrals is really just a way of tapping into the personal networks of employees. However, network recruiting becomes more important as the responsibilities associated with the position increase, as it provides the best connections to individuals who have the background, skills, and integrity that are essential to a position of great responsibility in the company. EXECUTIVE SEARCH FIRMS When filling key positions, small companies some- times turn to executive search firms, often called headhunters, to locate qualified candidates. The key positions for which such firms seek applicants are those paying a minimum of $50,000 to $70,000 per year. The cost to the employer may run from 30 to 40 percent of the first year’s salary. Because of the high cost, use of headhunters may seem unreasonable for small, entrepreneurial firms. At times, however, the need for a manager who can help a firm “move to the next level” justifies the use of an executive search firm. A headhunter is usually better able than the small business to conduct a wide-ranging search for individuals who possess the right combination of talents for the available position. WALK-INS AND HELP-WANTED ADVERTISING A firm may receive unsolicited applications from individuals who walk into the place of business to seek employment. Walk-ins are an inexpensive source of personnel, particularly for hourly work, but the quality of applicants varies. If qualified applicants cannot be hired immediately, their applications should be kept on file for future reference. In the interest of good community relations, all applicants should be treated courteously, whether or not they are offered jobs. A “Help Wanted” sign in the window is one traditional form of recruiting used by some small firms, mostly retailers and fast-food restaurants. A similar but more aggressive form of recruiting consists of advertising in the classifieds section of local newspapers. For some technical, professional, and managerial positions, firms may advertise in trade and professional journals. Although the effectiveness of help-wanted advertising has been questioned by some, many small businesses recruit in this way. 
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