The conversation usually starts like this: “I recently hired someone, and they’re not working out. What are my options?” The business owner will then go on to tell me the saga of the person they thought would be a star player but turned out to be a benchwarmer.
We then discuss performance management and termination policies, culminating in a decision to keep the employee or let them go.
It’s often a painful, emotional process to consider terminating an employee, one that most small business owners would rather ignore. And many small businesses are repeat offenders when it comes to poor hiring decisions. Hiring the wrong people is costly: It’s estimated it takes 1.5 times a person’s salary to replace them, let alone the cost to the business of decreased productivity, delayed forward momentum and reduced employee morale. So, how does one stop hiring the wrong people and start hiring the right people?
1. Stop hiring for convenience. Just because your neighbor’s son is home on summer break and needs a job, don’t hire him unless he fits your company and the job requirements. Same goes for family members, although this can be a trickier situation. Make hiring decisions based on the needs of the business, not the needs of the applicant.
2. Stop hiring based solely on personality. We all want to work with great people, but don’t fall into the trap of hiring the most “likable” candidate without considering other factors as a whole. In addition to personal presence, consider the candidate’s experience, education and accomplishments in the selection process.
3. Stop hiring out of desperation. You’re behind on orders and the current staff can’t keep up — you need help now. While it’s tempting to take the “warm body” approach, impulsive hires seldom succeed in the long run. Proactive business planning will help assure you hire the best employees before you need them.
1. Start hiring people who have the skills your company needs. Determine this by listing each major function (HR, Accounting, Sales, etc.) along with the top five responsibilities needed to succeed in those areas. In his book, “Traction,” Gino Wickman calls this the “Accountability Chart.” Hire people who have demonstrated competency in performing these roles and functions.
2. Start hiring people who share your company values. Jim Collins, in his book, “Good to Great,” talks about getting the “right people in the right seats” in your business. In addition to motivation, desire and skills, the “right people” share your company’s core values. Use behavioral interview questions to select candidates who meet these requirements.
3. Start hiring with a pre-determined process. Follow a simple checklist for every hire that includes the job description, salary budget, posting, interview questions and selection criteria. Following a consistent process reduces bias and risk of retaliation for unfair hiring practices. It also ensures you get comparable information from each candidate to make the best hiring decision.
It takes preparation, insight and dedication to hire the right people for your small business. By consistently following these steps, you can avoid hiring the wrong people and build a productive and engaged workforce that exemplifies your company values and adds to your bottom line.