How to hire the right staff members for your SME

In the delicate scaling phase of a small to medium-sized business, the entrepreneur at the helm needs to surrender to the reality that it is no longer possible to continue doing everything alone. 

But is it possible to hire a team that will keep you rising up the ranks? It is, and here’s how to go about it.

Employing a significant portion of the South African workforce and contributing substantially towards the country’s gross domestic product (GDP), small and medium-sized enterprises (SMEs) are pulling out many of the stops that our economy currently needs.

According to Business Partners, a leading business loan provider for global SMEs, local small businesses “employ an estimated 50 to 60 percent of the workforce”. 

Considering the country’s alarming unemployment rate of 31.9 percent, as of the fourth quarter of 2024, it is evident that “small businesses play a crucial role in job creation. 

By providing millions of South Africans with the means to support their families, small businesses also help to alleviate poverty.”

Furthermore, SMMEs “contribute between 34 and 40 percent of South Africa’s GDP” according to the financial analysts at Krutham, a capital market practice based in Johannesburg. 

In their thought leadership article, ‘Enabling and unlocking the job creation potential of SMEs and the township economy’, Krutham revealed that while formal jobs declined by 128 000 in the last quarter of 2023, informal jobs increased by 124 000 during the same period. 

Unfortunately, 50% of SMEs fail within the first 24 months, and 70 to 80% fail within the first five years of operation, making it essential in the scaling phase to attract and take on the best possible talent. 

This can be achieved by:

• Offering potential staff members a competitive salary;
• Ensuring there is room for them to grow;
• Providing an upbeat work environment in which they are encouraged to contribute not just to the tasks that fall within their own job description, but also across the board; 
• Ensuring your SMME has a strong and vibrant set of values and an enviable in-house culture.

Charles Edelstein, director at job portal Executive Placements, advises that while an SME owner busies themselves with matters of sales and revenue growth, increasing profit margins, and attending to cash flow forecasting, any new team members will need to be able to hit the ground running by taking an entrepreneurial approach to their job description.

“While it is important to provide a clearly defined job spec during the hiring process, you will also want to look out for an individual who tends to do more and thinks more broadly than the average employee out there. 

“Offer coaching and training in general business areas, from marketing and sales to basic accounting and team building, because this shows that you are making an investment in your new staff member. In return, you’ll want to be able to benefit from their strong analytical skills.

“For example, do they come to you with clever insights that you may not have considered yourself? This is a win-win for your company’s future potential and ultimate success.”

The ideal candidate for an SME is a team player, says Edelstein. “He or she is able to network at industry functions and will help you to gain a sustainable advantage over the competition – because, at a certain point, you really cannot be everywhere and do everything any longer.”

Yes, there is an ideal list of personality characteristics for an SME employee. Ask yourself during the initial interview, and in the day or so afterwards:

• Is the candidate sufficiently adaptable and flexible for your dynamic work environment?
• Does he or she communicate well and in a positive way when put on the spot;
• Does she collaborate and build relationships with clients and colleagues in similar jobs in South Africa;
• Is he reliable, and does he take responsibility for the tasks assigned to him;
• Does she take the initiative when there’s a problem to solve, or simply leave things until you return to the office;
• Is he confident in meetings, and enthusiastic when invited to join a training course; and
• Will she be able to gather and maintain client trust by behaving in a generally ethical manner?

Authors of a recent paper in the International Journal of Human Resource Management, ‘Advancing understanding of HRM in SMEs: critical questions and future prospects’, say it best:

“Employees working in SMEs should expect to work across multiple roles and tasks, and have an ability to directly shape the key value-added activities of the business, in addition to finding engagement through regular interactions with management. 

“These factors … can lead to intrinsic motivation, discretionary effort, and the greater engagement of employees working in an SME context, even in the absence of sophisticated HR practices”. 

By Vanessa Rogers.