Hiring and recruitment

Why it matters

A wrong hire costs far more than the salary. Add the recruitment time, training, lost productivity, the impact on the rest of the team and the cost of doing it all again, and a bad hire in a ten-person business can easily cost the equivalent of six months of that person’s wages. A good hire does the opposite: it is usually the single biggest lever an owner has to free their own time and grow the business.

Start with the outcome, not the job title

Before you write anything, list what is not getting done and what it is costing you. Then ask whether a hire is the best fix. Sometimes the answer is a process change, a piece of software or an outsourced provider. If a hire is the answer, describe the role as three to five outcomes: "customers are invoiced within 24 hours of job completion", "the workshop is stocked so jobs never stall for parts". Outcomes make it much easier to judge candidates and, later, performance.

Decide on the employment type at this stage too. Full-time and part-time employees suit ongoing, predictable work. Casuals suit genuinely irregular hours. Contractors suit defined projects where the person runs their own business. Each has different obligations under the Fair Work Act and the relevant modern award, so make the decision deliberately rather than defaulting to whatever is easiest this week.

Write an ad that does the filtering for you

A good job ad is a sales document aimed at one person: the candidate you want. Lead with what the role achieves and what it is like to work with you, then the must-haves, then the practical details including pay or a pay range. Ads that state pay attract more and better-matched applicants and waste less of everyone’s time. Keep the must-have list short and honest; every unnecessary requirement removes good people, especially those returning to work or changing careers.

Spread the ad across channels that match the role. Your own network and your team’s referrals produce the best hires for most small businesses. Industry groups, TAFE and university job boards, local community pages and the major online boards fill the gaps. For trades and hospitality, a sign in the window and a post in local groups still works.

Select with structure, not gut feel

Unstructured interviews, where you chat and see who you like, are poor predictors of job performance. Structured interviews, where every candidate is asked the same questions and scored against the same criteria, are far better. Build five to eight questions from your role outcomes. Ask for specific past examples ("Tell me about a time you had to deal with an angry customer; what did you do and what happened?") rather than hypotheticals.

Add a short practical task that resembles the real work: a bookkeeper reconciles a sample bank statement, a tradie quotes a small job from a photo, a salesperson role-plays a discovery call. Twenty minutes of real work tells you more than an hour of conversation. Involve one other person in the interview if you can, score independently, then compare.

• Phone-screen for ten minutes first to confirm availability, pay expectations and the non-negotiables.
• Use the same questions and a simple 1–5 score for every candidate.
• Include a practical task that mirrors the actual job.
• Always call at least two referees, and ask about the outcomes in your role brief.
• Confirm the right to work in Australia and any required licences before the offer.

Make an offer that holds

Move quickly once you have decided. Good candidates in a tight market usually have other options, and a week of silence reads as disinterest. Phone first, then follow with a written offer and a contract that states the position, employment type, pay, hours, award coverage, probation period and start date. Give the candidate a few days to review it and ask questions.

If a strong candidate declines or negotiates, listen before you react. Often the issue is flexibility, start date or job title rather than money. Keep the second-best candidate warm until the first has signed and started. Then let unsuccessful interviewees know promptly and politely; in a small community they are future customers, referrers and sometimes future hires.

How to hire in a small business

1. Write the role brief Outcomes, must-haves, employment type, award and pay range, reporting line.
2. Check the award and budget Confirm the relevant modern award and minimum pay with Fair Work, then set a realistic range including super and on-costs.
3. Write and publish the ad Lead with the role and your business, state pay, keep requirements honest. Ask your team for referrals.
4. Phone-screen quickly Ten minutes with everyone who looks plausible, within a few days of applying.
5. Run structured interviews with a task Same questions, same scoring, one practical exercise, ideally two interviewers.
6. Check references and the basics Two referees, right to work, licences, qualifications, and any police or working-with-children checks the role requires.
7. Make the offer in writing Phone call, then a contract with all key terms. Set a start date and a probation period.
8. Prepare for day one Hand over to your onboarding plan so the person is productive in their first week.

Real-world example

A Sunshine Coast landscaper makes a first hire

Dan runs Coastline Gardens in Maroochydore on his own and is turning away work. His instinct is to hire "a labourer". When he writes down what is not getting done, the list is quoting, scheduling and client follow-up, not digging. He re-scopes the role to a part-time coordinator who can also work on-site two days a week, checks the relevant award for coverage, and sets a pay range above the minimum because he wants someone who can run jobs without him.

His ad states the pay, the three-day roster and that the business is growing. It draws 41 applications. Dan phone-screens eleven, interviews four using the same six questions and a 20-minute task (schedule a week of jobs from a list of quotes and a map), and calls two referees for his preferred candidate. He makes a verbal offer on the Friday, sends the contract that afternoon, and she starts a fortnight later. Within three months his quoting turnaround drops from a week to two days.

Common mistakes

• Hiring a copy of yourself Owners often hire people they like rather than people who fill the gap. Score against the role brief, not rapport.
• Vague ads without pay Ambiguity attracts everyone and no one. State the pay range and the real must-haves.
• Taking weeks to decide Slow processes lose the best candidates. Set a timetable before you advertise and tell candidates what it is.
• Skipping reference and right-to-work checks Two phone calls and a visa check take an hour and prevent the most expensive hiring mistakes.
• Treating a casual or contractor as a shortcut Classifying someone wrongly to avoid obligations can lead to back-pay claims. Choose the employment type for the work, not convenience.

KPIs to track

• Time to hire Days from the ad going live to a signed offer. Four to six weeks is typical for a small business; shorter is usually better.
• Qualified applicants per role How many applicants meet the must-haves. Fewer than five suggests the ad or channels need work.
• Offer acceptance rate Offers accepted divided by offers made. Below about 80% points to pay, speed or communication issues.
• Six-month retention Share of new hires still with you and performing after six months. This is the real test of the process.

Frequently asked questions

Do I have to advertise a job, or can I just hire someone I know?

In the private sector there is no general requirement to advertise. Hiring through your network is common and often works well, as long as you still check the basics and treat the person correctly from day one.

Can I ask about age, family plans or health in an interview?

Questions about protected attributes create discrimination risk and rarely help you judge the job. Ask instead about availability, the ability to perform the specific requirements of the role, and past work examples.

What is a probation period and do I need one?

Probation is an initial period, commonly three to six months, where both sides assess the fit. It is set in the contract. It does not override the minimum employment period rules in the Fair Work Act, so check how unfair dismissal protections apply to your business size.

Should I use a recruitment agency?

Agencies save time and reach passive candidates but charge a fee, typically a percentage of the first-year salary. They make most sense for specialist or senior roles, or when you have tried direct hiring and failed. Some providers, including SMBH Consulting’s recruitment and payroll service, offer a fixed-fee alternative for small businesses.

Key takeaways

• Define the role by outcomes before you write a single word of the ad.
• State the pay and the honest must-haves; let the ad do the first round of filtering.
• Use the same structured questions and a practical task for every candidate.
• Check references and right to work every time, no matter how good the interview felt.
• Move fast once you decide, and put the offer in writing with all key terms.