Q. One of the biggest challenges of a small business looking to grow is finding and retaining high quality employees. What thoughts or ideas do you have on structuring a business and compensation to attract and retain great employees without going bankrupt in the process?
A. There are really two questions here. The first is how to hire high-quality employees. The second is how to retain those employees once you have attracted them. We’ll deal with how to find and hire high quality employees this week and focus on retention next week. Hiring good people is difficult, and nothing will guarantee success, but we uncovered five ways to tip the odds in your favor.
1. Know exactly what you need – While it may seem like remedial advice, identifying what you need in each of four areas is the first step:
Physical requirements – This category includes activities such as lifting, walking, bending or speaking. Limit what you specify to the actual requirements of the job.
Experience – This includes work experience, but also education, accreditation or licenses. Focus on the results you want delivered not just on prior work experience. Be careful about eliminating good candidates by over-specifying.
Behaviors – These include honesty, the ability to work well with others, attitudes and work ethic. While employees can learn skills, it’s more difficult to teach behaviors. Hire behaviors, train skills!
Cognitive capability – Comedian Ron White observes, “You can’t fix stupid!” It’s funny, in part because it’s true. An employee can learn new skills, but their cognitive capability is unlikely to improve significantly. If you want smart employees, hire smart people!
2. Understand what you have to offer – As a small business, you may find it difficult to compete with the big dogs on compensation and benefits. However, you have other things of value: flexible schedules, broader job responsibilities, a family feel, an entrepreneurial culture or the chance to learn new skills as the company grows. Obviously, structuring a competitive compensation package is critical. We’ll explore this topic in more depth next week when we discuss retaining and motivating employees.
3. Cast a broad net with a narrow focus – Go beyond friends and family―consider many candidates, but because you know exactly what you are looking for, quickly eliminate the bulk of the prospects and focus on the promising few.
4. Leverage multiple methods and opinions – Including others in the hiring decision can offer enhanced insight. Others may catch something you missed or ask a key follow-up question. While the hiring manager should generally make the final decision, it’s prudent to involve others. Consider multiple methods of assessing a candidate’s fit. Depending on the job, there are three useful methods of evaluation: interviews, assessments and simulations or trial employment.
5. Trust, but verify – Unfortunately, prospective employees often claim education and work accomplishments that simply aren’t true. Once they are inside your organization, dishonest employees can be devastating. The SBA states that employee theft is the cause of 30 percent of all business failures. Perform the necessary checks to prevent dishonest people from infiltrating your organization. Ensuring that you get the right people in the right jobs is critical and while it’s not easy, it’s doable. Bad hires can destroy the business that you have labored to build. Following the steps outlined above will greatly improve the probability that you’ll succeed.