Hiring Staff
It may happen before you plan for it. You’ll need to bring someone into the business to assist you, lest you under-perform to the point that it affects the quality of the service you deliver to your clients. You need help with sales, scheduling or managing the flow of paperwork. You could use an office manager, training assistant or perhaps a full-time trainer beside yourself.
Obviously there are consequences when you add payroll. Profits dip short-term, for instance. You’re exposed to greater liability, too. If you’re in a competitive labor market, you may have to provide some level of health benefits in order to recruit candidates or keep them on staff.
Don’t underestimate the expense either. Typically, add 20 to 35% to the direct payroll cost (to cover worker’s compensation insurance, unemployment insurance, social security and other costs out of your pocket).
Key decisions relative to hiring staff include:
- Adding staff will boost productivity to the point of increased revenue exceeding the increase in overhead
- The business will be more efficient with extra hands at work
- Customer service levels would improve
- Outbound telemarketing by a new staffer(s) would increase sales
- Profits could increase through accounting staff
A good rule of thumb is to “hire slow and fire fast”. One can never under estimate the X factor involved in staff selection. Passion, intensity, integrity and the ability to execute all those in the line of fire is what make up customer service. These ingredients are paramount to your business’s productivity and longevity. Right out of the gate you need to know and write down, exactly what you are looking for in an individual long before the obvious job description. Then you can write a job description before you begin interviewing so you know what the person is expected to do. Measure each candidate’s experience to your job description to align their background and skill set with your expectations of performance.
Conduct your first interview with any candidate over the phone, not in person. This saves time and can be conducted carefully when you’re driving to a free demonstration, for instance.
It is imperative to check references; everyone is on their best behavior for an interview. If you are paying what the candidate is currently earning, find out why they would come to work for you. If they will be handling cash, run a background check from any number of vendors available on the Internet for such purposes (about $50).
If you are a member of the local Chamber of Commerce, they will have information about state and local employment laws. You cannot solicit or hire on the basis of gender, age, race, religion, or sexual orientation.
Require candidates that do come in to interview, complete an employment application. You will need to keep that application on file for several years. If there are inaccuracies or overstatements on the employment application, be careful going to the next level of involvement with the candidate. Spelling errors also foretell sloppy work or laziness.
With the high cost of gas, candidates that would face an arduous commute may not be long-term employee candidates.
There are few decisions entrepreneurs face as important as adding staff. Be cynical and skeptical throughout the hiring process. Don’t settle for mediocrity in any area. If this individual will interact with customers, be especially careful in the hiring decision — if they lack customer service skills, they can damage your business reputation and suppress sales growth effective immediately.
Should it be clear you’ve made a poor hiring decision, move fast and cut your losses. Cold? Not at all, more practical than anything else. Abide by the law during the discharge phase. Know the limits on your business insurance policy too. Be mindful to consider that you increase profits only if the new-hire contributes to the bottom line. Hired staff are best suited if they can fill in the gaps from your weaknesses, or they perform tasks that free your time to focus on growth and increasing your bottom line.
