How Access to Fast Working Capital Grows More Sustainable Teams
By B Cressy|
January 11, 2024
South African SMEs are faced with a challenging conundrum: to achieve powerful, long-term growth, businesses need high-value resources like quality talent. But quality assets require an investment of time and money, two resources that are in unrelenting demand in growing businesses. That’s why access to fast working capital is so crucial for small enterprises.
Because it’s not just about access to working capital — it’s about access to time. Time to make slow, considered decisions that align with the long-term growth strategy of the business without jeopardising cash flow.
The true cost of hiring quality talent in South Africa
According to HR software provider, Wamly, the cost of hiring a new employee in South Africa is roughly R30 000 but can run as high as the global average of R60 000. This figure is calculated by considering the loss of productive hours to screening candidates and hosting interviews, hiring fees, job advertising costs, training and onboarding, and the loss of productivity during the settling-in period (which can last as long as 12 months).
Hiring is a costly process no matter what your business is, but the pressure to make the right call the first time around is especially high in South Africa due to stringent labour legislation. These laws are in place to protect vulnerable parties, but this also means that business directors ought to hire as though they are hiring for life. Making the wrong hiring call could be a costly mistake that takes a long time to resolve.
This reality gives even more credence to the idea that hiring should be a highly considered investment into the long-term well-being and success of the business. Despite this, current hiring trends in growing enterprises tend to be more reactive than proactive. The result? Hiring processes are rushed, and applicants tend to be chosen based on being “good enough” rather than “the best”, leading to relatively high turnover rates and affecting performance — factors that inevitably slow the growth of the business.
How to leverage fast working capital and slow hiring practices for sustainable growth
Considering the scenario laid out in the first half of the article, it’s clear that South African SMEs have their work cut out for them when it comes to making hiring decisions. Not only do directors have to consider legislative restrictions and hiring costs, but they also have to consider that growing businesses demand skilled employees who are ready and willing to work in hands-on, hybrid roles.
Finding employees that fit this description is not impossible, but it is a tall order and it requires time to execute well. To that end, here are our three top hiring tips to help growing SMEs unlock sustainable, exponential growth:
- Hire the person, not the position
When the business is under pressure to fill a vacancy, it’s tempting to hire the first qualified lead who responds to the job advertisement. But don’t let that false sense of urgency lead you into discounting candidates who may be lacking formal qualifications, but demonstrate a good deal of passion and teachability. Not only could you miss out on a good fit, but you may end up enforcing a pattern of rapidly cycling through employees.
The rapid rate of growth that most SMEs undergo is bound to require employees who can develop skills in response to ever-evolving business scenarios. This means that seeking out a fixed skill set may not be as important as seeking out a person with an aptitude for flexibility and adaptability.
- Develop a candidate avatar
A candidate avatar is a 360-degree visualisation of the ideal candidate. Who is this person? What are their strengths and weaknesses? What characteristics make them a good cultural fit for the company? Where have they worked? Seeking answers to these questions may help business leaders avoid hiring the position instead of the person.
- Be prepared to compensate fairly
Finding an employee who is not only qualified for the role, but also a good cultural fit for the company and prepared to work in an exciting but demanding environment that requires them to fill multiple roles with a can-do attitude is 100% possible, but it requires a proportionate investment on the part of the business.
All of this to say, as Forbes puts it, “If you’re not willing to loosen up the purse strings a bit when a stellar candidate comes along, you may not improve your team’s quality by much.” Hiring the right people is an investment, but the cost becomes that much more manageable when it’s spread over a few months.
Bridgement’s fast working capital solutions are designed to empower growing businesses to invest in their continued expansion without putting undue pressure on cash flow. Apply online in 2 minutes. Access up to R5 million in business funding in 24 hours. Grow a qualified team of great employees at your own pace.
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