Business Operations Chapter Four: Hiring and Recruiting

by Business Management Series on October 7, 2011 · 0 comments

in Business,Business Management Series,Management

When looking at competitive advantage, there is really only one aspect that is unique to any business: the people in your organization.

When looking to hire new employees, it is important to make appropriate decisions. In his book, “Good to Great”, Jim Collins shows that making sure you have the right people on your team is one of the factors for establishing a great company.

Having the right people can help propel your business forward; conversely, having the wrong people can hold you back. One of the most important decisions you will make as a business leader will be who you hire.

If you hire the wrong people and are forced to terminate their employment, it can actually cost you quite a bit of money. (Considering that it can sometimes take a month or longer for an employee to find his/her feet in your organization and be at 100% utilization).    This introductory period is an investment in your employee and a termination can cost your organization money. There are other costs (such as unemployment insurance and health care) to consider. Hiring and quickly terminating an employee is a “lose-lose” proposition. It is bad for the person you are terminating and bad for your business as well.

To assist you with the task of hiring the right people the first time and avoiding the problems / costs associated with hiring the wrong people, below are some best practices for hiring new employees.

Best Practices for Hiring New Employees:

1. Write a job description

This process serves two purposes: First, it helps ensure that all understand why you are hiring a new resource. By writing a job description, you are promoting a disciplined approach to increasing infrastructure and forcing both yourself and others to justify the new human resource expense. One very successful business leader used to have a rule about hiring new people: If a manager / business leader could not justify to his peers that he needed fifteen people working for him, then he should have no one reporting to him at all. While this example is a bit extreme, it does drive home the point that anyone looking to increase infrastructure should be able to show a demonstrated need for incurring additional infrastructure expenses. Writing a job description provides a method for documenting the true demonstrated need and job responsibilities for a new hire.

Second, writing a job description gives the applicant a clear sense of what your expectations are for the position. It provides potential applicants the ability to self-assess and determine if they are suitable for the job by having the right qualifications.

2. Interview several people

Hiring the right new employee can greatly enhance your business; therefore, you should never settle for anything less than the ideal fit. One way to make your decision easier is to have a larger pool of prospects from which to choose. Interviewing several candidates and completing multiple rounds will only give you choices for filling a vacant position. Like anything else in business, interviewing people is a skill that becomes more refined with time, experience and practice. Interviewing several people helps you to become a better interviewer and provides you with visibility to positive traits for potential candidates, as well as provides you with the insight to traits that do not fit your organization.

3. Sell your prospects on your meaning and mantra

One reliable way to hire appropriately is to confirm that potential prospects believe and support your organization’s meaning and mantra. Remember that having meaning and mantra should motivate and inspire not only investors and prospective customers, but also your employees and other team members. When an employee believes in (or is passionate about) the meaning that your business makes, they are more inclined to volunteer their best efforts and to exceed the requirements of their job. If a prospect genuinely does not care about this meaning nor is he/she motivated by your organization’s mantra, they may not be the best choice for your business.
Also, employees that believe in this meaning will have a higher degree of job satisfaction. High job satisfaction encourages an increased responsibility for company performance, increased flexibility and a higher degree of customer service.

4. Share your business plan

If you are hiring a top level executive for your business, sharing your business plan and overall strategic vision for the company may prove to be very beneficial. If you are a small company just getting started and hiring your first employees, the same is true.

By sharing your plan, you give the ability to understand the company direction and plan of approach. This will empower a new hire by giving them visibility to the milestones and tasks for the business and encourage them to take a more active role in helping you grow the business.

When looking to hire higher level management talent, your business plan will help entice superior prospects to consider your company.

5. Use prescreening and assessments for technical staff

There is an art to hiring technical team members. One way to find the right technical resource is to ensure that prospects hired are qualified in their technical areas of expertise. You can make certain that only quality applicants are interviewed by prescreening technical applicants with typical, technical questions.

6. Ask for references and check them

The title of this best practice says it all. When interviewing or considering any new hire you should (without question) get references and check them. This will give you the insight as to whether or not the resume and claims of an applicant are factual.

Evaluating Prospective Employees:

When interviewing prospective employees, there are some proven criteria that can help you to evaluate whether or not they are a good hire for your organization. This criteria should be weighed as to how each applies to the unique needs of your company, and is broken into two distinct tiers. Tier one represents the most important areas that all prospective employees should fit regardless of the position for which they are interviewing. Tier two should contain criteria that may or may not be important depending on the exacting needs of your company and the position you are looking to fill. Ideally, a prospect should rate highly in all areas.

Proven Evaluation Criteria (Tier One):

Aptitude is the ability for a candidate to learn new things relating to their job, the industry, and your business as a whole. Higher potential candidates will have a higher level of aptitude and will be able to learn things quickly. This trait is especially important in technical team members.

Personality is important because no one likes working with or dealing with people who have a bad attitude or are not personable. Higher potential candidates will be confident and make the people around them feel good about working with them. Typically candidates with great personalities have a good, balanced outlook on life and treat others with respect and kindness. Candidates with a good personality are more inclined to be positive and deal with job challenges and issues well.
Flexibility addresses a candidate’s ability to adjust with the changes in your business or industry. Flexible candidates are willing to make adjustments to new job requirements easily without complaint and are happy to do their part to make the business successful, regardless of their job description.    Higher potential candidates should have a high degree of dedication and flexibility; whereas lower potential candidates are more regimented and inflexible.

Proven Evaluation Criteria (Tier Two):

Life experience is perhaps one of the most overlooked evaluation criteria when interviewing candidates. A person with a high degree of life experience has operated in environments similar to yours or has been with a company like yours as it grew to larger levels. Candidates with higher potential will have been in the workplace / society and have gained critical skills in interaction with people, they may even have personally seen businesses like yours grow or fail.    This aspect is important as they may be able to provide insight in other organizations’ responses to the challenges that
you are facing. Lower potential candidates will most likely not have much workplace experience of any kind and have typically just completed their formal education.

Some may confuse life experience with job experience. In fact, there is a great deal of difference between the two. The best way to understand this is to use the adage about the difference between intelligence and wisdom.
An intelligent person will be walking in the rain and know and recognize that it is raining. They will understand why it is raining and they may even know that rain is “water falling to earth in droplets, caused by condensation in the clouds combined with temperature change”.

Someone with wisdom will recognize it is raining and will simply get out of the rain. Likewise, life experience is the experience and wisdom to know how to act and behave in many different situations. Many of the challenges that face a specific type of business are not so dissimilar to the challenges that someone with a great deal of life experience has faced.

Specific job-related experience and knowledge is a huge benefit for any candidate. This evaluation criterion goes hand in hand with life experience. If a candidate has both life experience and specific job knowledge, then they are a prime candidate for hire. This criterion is also tied into specific knowledge directly relating to the open position. For example, if you are looking to hire a technician for your business, then higher potential candidates will already have knowledge about the products you are selling and supporting.

C. Recruiting Prospective Employees

When looking for prospective new employees, there are many different ways to find applicants. One of the most obvious methods is to contact a headhunter or an employment agency. These agencies specialize in placing qualified applicants with good companies. The only drawback to these firms is the cost. Most agencies are compensated on a percentage of the hired employee’s annual salary or a set finder’s fee.

Another more cost-effective method is to use online vertical search tools such as Monster.com or Careerbuilder.com. These tools allow you to search through thousands of posted resumes and find prospective employees. There is a cost for these services, but they are usually very reasonable.

One way to find young professionals just entering the workplace is to contact your local university or college and see about posting available positions. You may also want to inquire about their intern programs.

You can also use your local newspaper to post job positions in print, as well as on the newspaper’s website. When looking for employment, many people use newspapers to learn about new, open positions.

Lastly (and perhaps one of the best ways) to find prospects is to ask your friends, family, and other employees for referrals. Prospects found through this method usually have the added benefit of being somewhat pre-qualified.

D. Managing Organizational Changes

While this topic is a bit out of the scope of this series, we want to touch on executing organizational changes. Most entrepreneurs and business professionals mishandle changes to the organization. If you are planning on selling your business, acquiring a new one, changing staff assignments or letting people go; it is important to make the change decisively.

Successful organizational changes are conducted lightning fast, razor sharp, and are well-communicated to your team. The key is not to negatively impact productivity by creating an environment where people in your organization know something is happening and may question the effect on their position.    This creates a situation where people will resist change or be under increased stress caused by rumor and speculation. One way to solve this dilemma is to communicate clearly with your team about changes that are about to happen or immediately after they have occurred. There are times when discretion is necessary, but it is important to not create a panic or prolong organizational changes without communicating them to your team.

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Looking for ways to get ahead in today’s competitive marketplace? This Business Management series provides resellers with basic strategies, skills, and tools you can use to better manage and grow your business.

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