You’re never too small to set up a formal hiring process. Following a step-by-step hiring plan saves you valuable time and money, attracts stronger candidates, and mitigates liability issues. This guide will walk you through how to create one from start to finish.
Throughout this guide, we’ll be using Indeed as an example of how to post job ads online and manage applications. As the largest job board in the US, and a great source of free application tracking tools, Indeed covers all your bases. Click here to read more about the best job board websites.
We use Indeed regularly for new postings, and we’ve consistently found and hired quality talent via their job boards. If this is your first time hiring with Indeed, click here for a free $50 ad credit to boost your job posting.
What is a Formal Hiring Process?
A formal hiring process is a step-by-step playbook for how your business recruits, interviews and hires new employees. Most companies have some informal process in place already; however, vetting potential new hires with a standard process makes things much easier, and reduces the risk you take each time you hire.
The typical hiring process involves the following steps:
- Create the Position
- Write a Job Description
- Post the Job Ad
- Use Response Templates
- Phone Screen Applicants
- Interview In-Person
- Make a Decision
Don’t say that 7 steps sounds like a lot— I know you are thinking it. However, when you consider that every new hire costs at least $4,000, 7 steps is a short path to throwing that money right out the door. Also, once you get many of the steps formatted and streamlined, they will become automatic and take up very little time.
Let’s start from the beginning:
Step 1: Create the Position
It sounds obvious, but before you can hire someone, you have to know what you’re hiring them for. To create a new position, you need to know the title, job responsibilities, skills/requirements and salary — all of which will be essential to writing your job description in the next step.
Sometimes hiring a new employee can be a knee-jerk reaction to a stressful month or new client, so it’s always good to scrutinize your reasoning before getting any further. Ask yourself the 4 questions below to start thinking seriously about your new position:
Question 1: What is your reason behind hiring?
Everyone has a reason why they’re considering hiring a new employee, and some are better than others. For example, you feeling overwhelmed as a business owner isn’t by itself a great reason to hire someone. Before making a hire you need to figure out why you are overwhelmed. Then you can decide whether or not you need to hire someone to help you, or just simply delegate more responsibility to existing staff.
Question 2: What tasks will they fulfill?
Going hand in hand with question 1, what exactly will the new person do? You should be able to write out the specific tasks they’ll complete, and the estimated hours associated with each. When completing this exercise, it can be useful to bring in your team’s managers or senior members to get their input.
If you are struggling to figure out what tasks they will do, or if the hours simply aren’t adding up, you may not need to hire yet. You may instead want to hire a freelancer, or switch job responsibilities amongst your team to resolve the initial problem.
Question 3: When is this role needed?
Most small business owners answer this question with, “YESTERDAY!!!” That’s ok, but also go back to their tasks. For example, if you are thinking of hiring because you have a proposal out to a large potential client, you shouldn’t hire until the ink is dry on that bottom line (that’s not to say you can’t start your search ahead of time).
A realistic hiring timeline for a normal position (not a technical role or high-level managerial role) is:
- 1-2 weeks to organize — write a job description, post to job boards and source
- 1-2 weeks to review — review resumes and get people on the phone
- 1-2 weeks to interview — bring the top people in for an interview
- 1 week to hire — get the offer letter out and signed
- 2 weeks until they start — the candidate probably needs to give a 2-week notice to their current job
- Total: 4-9 weeks of time
Question 4: How much should I pay (and can I afford it?)
There’s many factors that go into determining salaries and pay rates, but generally job title, experience/skills required, and location are the most significant. You can use Indeed’s salary comparison tool to find out what similar employees earn, based on these factors. In addition, you can also calculate a compa ratio based on what other companies are paying for this role.
Also, don’t forget the cost of health insurance, PTO, and other benefits. If these are usually offered by other employers hiring this position, you may need to follow suit to attract the best candidates.
Now that you have the basics of what you want to hire for, it’s time to write your job description.
Step 2: Write a Job Description
After answering those 4 questions, you should be ready to write your job description. Having an accurate and thorough job description is important so that a candidate can assess their interest AND so that your internal team is completely clear on what this person will be doing. That said, your job description still needs to be concise (1-2 pages max) so you aren’t accidentally turning off any promising candidates.
Here’s the sections that every job description should include:
- Job title — Never underestimate the importance of a strong, accurate job title. Spending some time on this ensures you’re attracting ideal candidates who aren’t under or over-qualified. You can use Indeed’s Job Trends tool to see the most popular job titles potential candidates are searching for.
- About Us — A clear and concise outline what your company does and why someone would want to work for you.
- Position Details — What will be the day-to-day responsibilities of the new employee?
- Skills & Experience — List the requirements necessary to apply.
- Compensation — Postings with salary range included tend to get a lot more traffic than those without. Make sure you include a range with a 25-30% difference, depending on experience (e.g. $60,000-80,000)
For more advice on what to include in any of these sections, check out our full guide on How to Write a Job Description.
Remember, your job description is your first impression to job seekers, so you will want to spend some time on it. Don’t be shy to ask other team members for edits or feedback to get a fresh set of eyes on it, or do some research on Indeed.com or another job board to see how similar roles are described.
Step 3: Post the Job Ad
Once you have got a solid job description and job title, you’ll want to decide how far you want to cast you candidate net to get applicants. Indeed.com is by far the most popular job board with millions of job seekers active on it daily.
This is why we recommend starting any job posting with Indeed. Click here to get a free $50 credit to post your job. To learn how Indeed compares to other job boards, check out our job board comparison guide.
What About Finding Passive Candidates?
In addition to posting on job boards, you also might want to source candidates. This means that you find candidates who seem like they fit what you are looking for, but haven’t applied to it, or maybe are not actively seeking a new job.
You can search for passive candidates like this on social networks or resume databases. In addition to their job board, Indeed has a large database of several million resumes which you can click here to browse for free. To message a potential candidate about your job, it’s merely $1/person. When you think of what $100 could yield from these resumes (meaning 100 potential candidates) that’s a pretty reasonable price to source qualified candidates in your area!
We recommend both posting and sourcing for your role, unless you know it’s one that will get a lot of traffic like a Digital Marketing Manager (our post on Indeed got over 100 applicants in a week!). If you find yourself with enough applicants and don’t need to source, you’ll want to move right along to the next step of filtering resumes with response templates.
Step 4: Use Response Templates
As resumes start to flood in, you will want to have a process for filtering applications. Indeed has a nice feature that lets you decipher if a candidate is a Yes, Maybe, or Reject, that you can pre-set for filtering out candidates who do not match key job requirements. You can see this in the screenshot below.
Create Response Templates
Once you have your pipelines sorted out, you will want to create a template for next steps. The 3 responses of Yes, Maybe, and Reject calls for 3 templates.
- For the Yes pipeline, you will want to create a phone screen invitation template. Here is what I use when recruiting:
I would like to set up a 20-30 minute phone screen with you this week for the open role you recently applied to. Please provide 3-5 times that work best for your this week. Also, what is the best number to call? I will then confirm back with an interview invitation.
- For the Maybe pipeline, you will want to create a template that thanks them for applying and informs them that they will hear back in 1-2 weeks’ time. This buys you some time on exploring your “Yes” pipeline before deciding if a Maybe is worth your time to phone screen.
- For the Reject pipeline, you will want to create a job rejection letter. Indeed comes built in with a very nice, classy one, or you can find more examples here.
Step 5: Phone Screen Applicants
Depending on the type of job you have open, you might be having 10 or more phone screens of candidates (hint: rule of thumb is 50% of your phone screens will become rejected candidates). I’ve even done over 30 phone screens for certain roles like digital marketing positions that get a ton of applicants.
So how can you dig through that many people and phone calls without losing your mind? Simple. Use a phone screen template. We provide free 5 minute and 30 minute phone screen templates, which will let you compare candidates on an even playing field, keep you organized, and provide a legal background for hiring decisions if you ever need it (so store your notes somewhere— like in the Indeed notes section on each candidate). Most positions will require a longer 20-30 minute phone screen, but a 5 minute call can suffice for high volume hourly jobs.
Then, once you are organized, you’ll want to send invites to the candidates you want to talk to (hint: Indeed has a scheduling integration feature that makes this easy.)
Phone Screen Qualified Resumes
I recommend having at least 5 (preferably 10 or more if possible) phone screens for every position in order to really gauge what is out in the marketplace for your job. You will ideally want to have these as close together as possible. Remember, a phone screen should be short, sweet, and focused on the candidate’s resume and fit to the job description (over cultural fit, which is more for the in-person interview). Your goal is to confirm the candidate’s qualifications and get an initial “vibe” from them.
There will be some candidates that are immediate “no’s”, and then, just like resumes, you will have a “maybe” and a “yes” pile. Some of those “maybe’s” might become a “yes” after you conduct more phone screens, so don’t jump the gun on rejecting people.
Once you have your top tier, you will want to meet them in person.
Step 6: Interview In Person
I recommend inviting at least 3 candidates to interview in-person so that, again, you can see what is out there from the talent you have already phone screened and make comparisons. Before bringing your candidates in though, you need to:
- Pick your interviewers– Determine who should interview the candidate (and why).
- Determine timing and length of the interview(s)– Decide on the length of the interviews. Usually, most people only need 30-45 minutes with a candidate. Having a candidate in for more than 3 hours can be very intimidating.
- Get your logistics in order (booking conference room space, etc…)– Make sure that you have the space and time booked out so that your interview doesn’t need to be booted for the weekly team meeting. You will want to make sure it’s a clean, quiet environment where the interviewee will feel comfortable.
- Prepare the questions for the interview(s)– Consider doing a structured interview (where all the questions are set in advance) or creating a template of questions from our 120 questions guide. You want to make the most of this time with the candidate, and while you don’t need to be a robot, it also helps you steer away from illegal interview questions and going off on a tangent.
- Tell the candidate the details and schedule them- Schedule your candidates once you are ready and organized; make sure to tell them of an intricacies ahead of time (i.e. parking being difficult).
We go over these 5 items in detail in our full article on how to interview, and remember— you only make a first impression on a candidate once. Prepare to put your best foot forward so when you do find your favorite candidate, they’ll be just as excited to work for you as are with them.
Now that you have invited everyone into the office for their interviews, host the interviews and take thorough notes on your candidates (and have any other fellow interviewers do so too). While we encourage notes, we also want to encourage you to keep the notes professional and relevant. For example, “Candidate is in a short skirt” is not appropriate. “Candidate does not appear dressed professionally” is a better way to make a note of something.
If possible, document all notes on candidates into a system, like Indeed, to again, mitigate risk on hiring decisions and to keep everyone’s memories fresh.
Step 7: Make a Decision
Now that the hard work is over, you still have a decision to make between the candidates who made it this far in the process. If you have your rockstar candidate who you know should get the offer, well done and move down to the offer letter information below. If you don’t, you’ll need to have a healthy debate on which candidate should get the offer.
Compare The Candidates
Schedule a meeting amongst the interviewers as soon as possible to discuss a candidate after their in-person interviews. Some companies prefer to wait until all interviews are over to do this; however, this can lead to skewed perceptions due to time (recency bias), as well as you can then lose candidates to the process (they get another offer). We recommend using a systematic way of reviewing them, like a point total from the interview template, to provide an even playing field and to keep everyone on the same page.
If you don’t have a front-runner, after this first round of in-person interviews, you’ll want to jump back up to step 5, or consider working on your “Maybe” pipeline to find some diamonds in the rough.
If you do have your front-runner though, you need to move quickly. You will want to consider one of our 5 optional steps below, or you will want to move to:
Provide An Offer Letter To Your Top Candidate
Once you are ready to hire, you will want to provide an offer letter, including compensation and light-level information about benefits, to your candidate. If you and the candidate did not talk salary at all in your last conversation, or maybe you weren’t able to due to your location, you will want to make sure you do your research in creating a compensation offer. If you offer something fair for their experience, the role, your location, and your industry, you should be in good shape.
Ideally, you’ve now signed your dream candidate! But if you haven’t, or if you were wondering where things like references and background checks come in, keep reading on for some other potential hiring steps.
5 Optional Hiring Process Steps
Maybe you’ve been burned in the hiring game before, or maybe you’re like us at Fit Small Business where writing and communications are a huge part of our jobs here. If you have a unique process or want to add in extra safeguards to choosing candidates, you might want to add in one or a few of our optional steps below.
Optional Step 1: Check Candidate References
While many companies automatically check references, they should double check their state laws on what they can and cannot ask before doing so, which is why this is an optional step. Some states, like Illinois and Pennsylvania, require that you can only ask about job performance and nothing else. Depending on what the open job is, your feel for the candidate, and your location, you can then evaluate if you should do a reference check.
If you do one, I recommend keeping it very simple, such as 3-5 questions, and offering the reference (which should be a past manager) to do it via phone or email. I also strongly advise you to remember that references should add dimension to the picture of the candidate, and not be the entire picture itself. If a reference is sub-par and you formerly were about to give an offer to a candidate, ask the candidate what’s up and have an open discussion.
Optional Step 2: Add A Questionnaire
In my personal consulting business and here at Fit Small Business, this is a very popular option during the application process, or after the phone screen. Adding in a 3-5 question questionnaire narrows down a large candidate pool like you wouldn’t believe by providing a nice writing sample and by showing you who is really interested in your open job. You can use generic questions like asking a candidate to interpret your mission statement, or you can do short, role-specific questions (like asking a Digital Marketing candidate to explain their favorite social media strategy).
Maybe you want to take it a step further:
Optional Step 3: Try An Assessment
The difference between an assessment and a questionnaire is that an assessment is more formal and should involve a standardized grading process when it is evaluated. We highly recommend assessments for technical roles, like computer or web developers, or for roles like a paralegal, where typing and editing skills are crucial. There are third party services who can provide assessments, or you could try your hand at creating one (e.g. my client created a legal document with 8 errors on it in Word as their assessment for a paralegal role).
Remember, you’ll want to document the assessment and how you are grading it, just in case you need to justify a hiring decision.
Indeed even has an assessment tool that you can try that has 13 pre-loaded assessments. They range from 5 minutes to 20 minutes long, and are all multiple choice or typed answers in the form of a pre-written quiz. You cannot customize them or write one from scratch yet. Once a candidate completes an assessment, you get their scored results nearly immediately into your inbox, and it is also recorded in their Indeed application.
Optional Step 4: Use A Paid Test Assignment
Something we use a lot of here at Fit Small Business is a paid test assignment, especially for our writer candidates. This way we can see if their answers to our interview questions can actually be translated onto paper by them, and we can assess their aptitude for writing. For roles like writing or graphic design, a paid test assignment makes a lot of sense.
If you’re wondering, “Why paid?” That’s because most creatives will not do any work for free, and nor should they, especially if you may use it. There have been some scams out there where companies ask for free work as a “trial”… you don’t want to be associated with those type of firms!
Optional Step 5: Do A Background Check
Running a background check on candidates is completely optional, and sometimes it is even ill-advised and discriminatory. However, certain industries like finance, child care, and healthcare do require them, and other industries and roles may be in the best interest of the company to run one.
For example, I have an IT services client where they routinely have technicians deployed to client sites, sometimes even in the middle of the night and they are given keys to the client’s office. They run background checks in order to mitigate their own risk and to put their clients’ minds at ease. In fact, I think it is even in their contract with clients that they do this!
Here is a full guide on background checks and providers from soup to nuts if you are interested or think that this step is essential for your business or the role you are hiring for.
The Bottom Line
According to a study by Leadership IQ, 46% of newly-hired employees will fail within 18 months, while only 19% will achieve unequivocal success. The three-year study compiled results that found 82% of managers reported that, in hindsight, their job interview process with these employees elicited subtle clues that they were headed for trouble.
Having a formal hiring process is the first and most important step to interpret and act on these clues. This saves you a lot of time, money and effort in the long run. What’s more is, by using Indeed.com, you can take advantage of many free application management tools. So your formal hiring process will not come at any extra cost.
This article was sponsored by Indeed