In the fifth of a six-part series on starting your own business, John Downes looks at how to attract staff to your company - and the best way to retain them

Even the smallest of businesses will eventually need to look at expanding from a one- or two-person operation into a larger company employing more staff.

Indeed, if the business you are involved in requires a premises to sell its products, hiring staff could be something you have to consider from day one.

But how does a small company compete with larger outfits in attracting the right staff? For example, what are the incentives that can encourage a highly skilled IT technician, who might have a number of competing offers, to choose a start-up company over an established multinational?

According to Mr Paul Carroll of recruitment firm CPL Resources, one key consideration for any company is the establishment of an "employer brand".

"This is quite a separate entity to a commercial brand," he explains.

"The principals in a company need to think what is the story that makes something worth working for? Why do you work for a company?"

There are several factors that influence how an employer - or potential employer - will portray themselves to prospective employees, he says.

These include:

But it is not enough simply to pay above the market rate in terms of salaries, he warns. While this might serve to attract staff initially, in the long term market rates are established for a good reason, he point out. If you are paying above it, you are probably paying more than the job is worth.

Moreover, he says there is a risk you will end up with the wrong person, who is being overpaid for what they do. This can, in turn, become an expensive spiral, he believes.

"You need to have a good reason for why the job exists, and a vision of where you are going, which you can sell to a potential team," Mr Carroll says.

"Ultimately, it's a joint decision - it's about what both you and the employee will get out of it."

One key strategic way in which a small company can compete for staff with larger, more established companies is through the access it offers to decision-making within the company, Mr Carroll says.

This can particularly appeal to entrepreneur-type individuals.

"If they want to get a chance to get next to the seat of influence, joining a start-up where you are beside the owner-manager is a good place to be," he says.

"You can be having lunch with the person who is making decisions. So that has to be regarded as a very positive place to be. You can actually influence the vision of the organisation."

And while you might have to take the blame for when something goes wrong, you are entitled to be rewarded both monetarily and in terms of your position within the company when things go right.

However, he warns that some small companies make the mistake of offering equity in the company as an enticement to join.

Such incentives can work out well if you are looking to get a particularly strong individual to make a long-term commitment to the company.

But he cautions that some companies find themselves "handcuffed" to individuals because of deals based on short-term needs that give them little room for manoeuvre as the company grows in the future.

"It can be very expensive in cost terms if given to the wrong people," he says.

"For example, shares can be an excellent way of raising finance, but a 10 per cent shareholder might not want to sell at the price [ you are being offered]."

Ultimately, Mr Carroll says he advises clients weighing up two job offers to write down on a piece of paper the pros and cons of each opportunity.

But he underlines that, if it is still not possible to separate the two, the personal situation of the individual in question comes into play.

For example, if they have no family commitments or mortgage, they might be willing to take a risk with a smaller, newly established company - with all the hazards and rewards this entails.

This is something small companies in particular should bear in mind.

One small company which has dealt with the issue of how to attract staff is Dublin-based software company Cinario.

Chief executive Mr Charlie Weston says personal relationships he had made during 16 to 17 years in the IT sector were extremely important in allowing him to get established.

Initially, he used these contacts as a source of advice in getting his business off the ground, two to three years ago.

Once it was up and running, he was able to pay these people, each of whom had significant experience in senior management roles, on a consultancy basis rather than hiring them as full-time staff. Cinario currently employs 17 people.

"It can be a challenge to find staff. We are recruiting on experience but really also on attitude and personal commitment," he says. "But one way we compete as a small company is [ by saying] that in one year you will get the equivalent of three to four years' experience in, say, a semi-state company."

When Mr Weston went to the recruitment market five to six months ago, however, he said he did notice a big difference in the market, even compared with just two years previously.

"People were looking for more money, were less available, more choosy and less willing to take a risk," he says.

"It was a struggle even to get good-quality CVs in the door."

And interestingly, although he does not label it as such, he also tends to employ Mr Carroll's idea of "employer branding" to encourage the right people to join his company.

"Because we're such a small we get it right. So we tell people 'this is exactly what it's like. It's hard work but it's enjoyable work'."

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