04/ 02/ 2008
by Lena Anthony
Simple rules for recruiting top talent to your small business
In a big company, having a ho-hum employee on the payroll can go completely unnoticed. But in a small business, the effects of such mediocrity can be devastating. When you only have a handful of employees to get the job done, each member of your team is more than just another cog in the machine. No matter the role, each employee is integral to the success of your business.
That's why hiring the right people is important, as small business owners Mike Marshall, Janine Montoya and Sheila Ogle, who have a combined 50 years of hiring experience, have sometimes learned the hard way. They've made their fair share of bad employment decisions, but they've learned from their mistakes and have instituted some hiring guidelines that work for them. So whether you're ready to hire your first employee or your 50th, learn from their lessons on the rules of recruitment. Then go snag yourself a star.
Promote From Within
Sheila Ogle, owner of Cary, N.C.-based MRPP Inc., is proud of the well-oiled machine she's created. Turnover has never been a problem at her media planning and placement firm, and when she loses the occasional employee (usually new mothers who want to stay at home), she knows exactly where to start looking to fill the void. "If the opportunity is there, we always try to promote from within," she says. "Then, we'll hire at the lower end of the spectrum."
Promoting employees when there's an opening to fill has myriad advantages. From a recruitment standpoint, it means you'll spend less money looking for the right person. From a retention standpoint, "it shows your employees that there is a place to go and that hard work and the right behaviors are rewarded," says Chason Hecht, president of Retensa, a New York City-based employee retention consulting firm.
You also avoid the risk that the employee won't fit into your culture, which is so important in a business like Ogle's, which doesn't have something tangible to sell.
"The only things we have to offer are our skills and our brains, which makes finding someone who believes in our culture and has the same business ethics that much more important," she says. That's why Ogle prefers hiring people who are searching for their first job. "We don't have to break their bad habits," she says.
Even though promoting from within is generally easier, Retensa's Hecht warns that the process of preparing the employee for a new job should be no less time-consuming. "The person you promoted will need extensive management training because they're going from being someone's peer to their manager," Hecht says.
Search Smarter
Buying a "help wanted" ad in the newspaper just doesn't cut it anymore. The same goes for a standard ad on Monster.com or CareerBuilder.com. Putting minimal effort into finding qualified candidates to interview will result in candidates who put the minimum amount of effort into their job search.
"We've used headhunters, newspaper ads and online advertising, but you get so many applicants who aren't qualified," says MRPP's Ogle.
In other words, your future star isn't reading the classifieds to find a job; he or she is out there networking and making connections--or maybe he or she already has a job.
"When we're looking, we put the word out on the street among our suppliers," Ogle says. "They know what kind of company we are--and they know people at other companies who might be looking for a change. Our supplier lets them know we're looking to hire and, more often than not, we get a phone call the next day."
Retensa's Hecht also recommends posting your opening on your industry's association Web site. "If someone is involved in an industry association, they clearly have distinguished themselves as having a greater interest in their career," he says.
The key, Hecht says, is knowing where to look before you even start thinking about adding a new employee--and maybe even having a few names on the short list of potential candidates. Even if you're not planning to hire anytime soon, keep qualified applicants on the radar.
"A small business owner needs to understand that an employee adds much more value to them than a customer," Hecht says. "You've always got your ear out for a new customer. But that's just one customer. A new employee could be supporting hundreds of customers."
Institute a Process
Although Mike Marshall considers himself a hiring pro now, it hasn't always come naturally to the owner of Billings, Mont.-based Zee Creative.
Like most small business owners, Marshall had no hiring experience when he started his Web design and development firm, but that all changed when Marshall's business started growing.
"Looking back, I know it was just luck that some of the people I hired ended up working out so well," Marshall says. "I didn't know what to look for, I didn't know where to look and I didn't follow a process."
The lack of a hiring process caught up with Marshall when he made the mistake of filling two upper-level positions with two of his acquaintances--before making sure they were the right people for the jobs.
"It ended up not working at all," he says. "If we had just had them go through all of the steps, it would have become immediately clear that they didn't have the right skills for the jobs."
Not only do hiring mistakes cost a company time and money, but they can also decrease morale--a high price to pay in a thriving business like Marshall's that requires all hands on deck at all times.
Today, Marshall makes all potential hires--no matter how well he knows them--go through a standard hiring procedure, which includes a skill-specific test and at least two interviews.
"Sometimes it was shocking how bad some of the applicants were, which made us realize just how important having a process in place is," Marshall says. "We were wasting so much time interviewing people we shouldn't even have been talking to."
There are many benefits of having hiring standards in place, says Retensa's Hecht.
"Not only will having a process expedite hiring, it helps you reduce costs because you're more focused," Hecht says. "You identify the right people faster, which means you hire them faster, get them in the job faster and increase productivity sooner."
Cross-Examine Your Decision
Marshall also requires all job candidates at Zee Creative to meet with members of his staff. Not only does this give the candidates a taste of what working at Zee Creative would be like, it gives Marshall's employees a chance to see how they would work with the candidate--and identify any potential red flags that Marshall might not have noticed.
"It may be tempting to want to handle the hiring yourself, but I'm always surprised at the things my employees who sit in on the interviews notice," Marshall says.
What's more, getting buy-in from your employees can help foster a strong team starting on the new employee's first day. "Your employees who helped in the hiring process will have a vested interest in a new hire's success," Hecht says. "They chose them, so they'll want them to succeed."
It may seem like a no-brainer, but you'll also want to check the candidate's references. Unfortunately, Hecht says, most small business owners collect references but never follow up on them. "They have limited resources, so it's understandable, but also unfortunate."
In addition to verifying employment, calling references gives the new employer a chance to learn what motivates the worker and how best to manage them. You can use that background knowledge to motivate those employees to stay longer, Hecht says.
Create a Larger Applicant Pool
To say that staffing has been a problem for Janine and Ted Montoya is an understatement. In 2003, the owners of Valley Aire Heating and Air Conditioning and Tri-County Air Conditioning and Fireplaces, both located outside of Los Angeles, had to completely rebuild their staff of technicians. In a few weeks, they lost all of their Valley Aire technicians. "They all quit to go to work next door for a dollar more," Janine says. And across town at Tri-County, which they had just purchased from its former owners, they watched their tech staff dwindle from 19 to only four. "Some of them we let go; others left on their own when we started looking into things like why their gas cards were charged more than they should be," she explains.
And that's just the beginning of their staffing woes. An ongoing struggle for the 20-year business veterans is finding young people who want to work in the trades.
"The school system is so focused on getting kids into college, but some people just aren't college material," she says. "It's considered inferior to go to trade school and learn a job skill. If we could reach out to high-school students and let them understand that they can get a good-paying, fulfilling job without spending thousands of dollars on college, then I think people would be knocking down our door."
Janine teaches Junior Achievement classes to junior-high and high-school students, and she also has been involved at the community college level, participating in roundtables to discuss ways to make trade jobs more attractive.
In the meantime, she depends on an employee referral program to find qualified technicians. In return, employees get a bonus if the new hire stays six months and an additional bonus if they last a year. "It has worked really well," she says. "We just ask them to go find people just like them."
Lessons Learned
5 tips to try in your next star search
1. Promote from within and fill the void with an entry-level hire. Not only does this practice show current employees there's room for growth in your company, it reduces expenses as well.
2. Instead of just placing a basic newspaper or Internet ad, network with clients, colleagues and suppliers who know what kind of talent your business needs.
3. Follow a hiring procedure whether you're bringing on an entry-level assistant or a senior executive. It will save you time and help you avoid making costly hiring mistakes.
4. Involve your team members in the hiring process. If they endorse your decision, they'll have a vested interest in the new hire's success.
5. Don't like the applicant pool? Help change it. Volunteer in high schools and in the community to get the word out about the great opportunities available with the work you do.
NFIB.com
Find more tips on hiring and recruiting in the "HR" section of www.NFIB.com/toolsandtips.
Skills vs. Personality
One candidate has the skills but doesn't seem like a good fit with your company culture; the other might get along well with everyone but lack the skill set. Which one do you hire? Our experts weigh in:
"Generally speaking, you're better off hiring a good personality with skills to build on. The employee will appreciate you for helping them develop their skills, which will in turn increase loyalty. The exception to this rule is if the job is very technical; then skills should take precedence." –Chason Hecht, Retensa
"Personality is my preference. But obviously a good personality can't make up for a skill set that is too low. Staff that doesn't fit in well almost always causes problems down the road. I have seen the wrong person totally disrupt our entire office and create enough turmoil that good staff members were thinking of leaving." –Mike Marshall, Zee Creative
"We don't necessarily hire for skill because we can teach them that. We look for people who have a strong inner compass." –Janine Montoya, Valley Aire Heating and Air Conditioning and Tri-County Air Conditioning and Fireplaces
"I would always hire the person with the personality. You can teach the business skills, but you absolutely cannot teach personality." –Sheila Ogle, MRPP Inc.
