Insights, Ideas, Results
Many small business owners make the mistake of assuming they can’t afford to hire a recruiting firm. In reality they cannot afford not to retain expert assistance when it comes to expanding their labor force. Not only can busy small business owners save time and money, but they can also be relieved of a stress by delegating recruiting to the professionals who can provide qualified candidates both quickly and efficiently.
Recruiting firms help small businesses in multiple ways as shown below.
There are few decisions as important as hiring employees when running a small business. Hiring the right person can take your business to new heights. On the contrary, it doesn’t take long for the business to go in the ditch if a wrong person comes onboard. After all, all businesses, large and small, are largely dependent on their employees to keep them going. The owner or the manager alone cannot take care of everything.
Attrition remains a big problem for all small businesses. It is not surprising to find replacement of the entire workforce within a year. Many small business owners feel as if they are in the constant hiring mode – advertising, interviewing and onboarding employees. How can you expect to do rigorous job when you are always in the hiring mode? However, taking right steps early on and spending extra effort in finding and retaining good employees can pay off in reduced attrition rate, taking care of the nipping the problem from the bud. In an earlier post, I discussed 5 things small business owners must do when hiring. Here we will look at the corollary. What are the traps small business owners should avoid to ensure they don’t end up with bad apples in their employee crew?
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The success of any business is largely dependent on its employees. Good employees can help improve the business, and by the same token, bad employees can sink it into bankruptcy. That is why hiring good employees should be of paramount importance to all businesses, and particularly so for small businesses.
In my observation, most small business owners consider employee hiring a necessary evil they have to deal with when current employees leaves. They approach the hiring process in an ad-hoc fashion and try to get someone quickly so that the business can get back on track. The problem is hiring this way does not get you the right employees you need to make the business successful. Eventually, either you will need to fire the employee because he isn’t the right fit or the employee himself will leave. In the end, the cycle has to repeat and soon you find yourself in the endless hiring loop.
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As we herald into 2013 I thought it would be worthwhile to revisit the stories we produced in 2012 and the response we received from the readers. Here are the top 10 articles, in no particular order that got the most attention, discussion, controversy and response.
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My previous two posts on hiring a manager for small business received interesting feedback from the readers. Some made arguments both for internal promotion, while others said external candidate is the best choice. To recap, the first post focused on why you should promote a manager from inside . I believe this is the best course of action when small businesses need to fill in the manager vacancy. However, there is a case to be made for hiring an outsider as laid out in the second post based on suggestions received from the readers.
It appears which candidate will be a better choice depends on your particular situation – what state the business is and how the newly hired manager fits in that situation. Instead of looking at this choice in black and white, you need to take a step back and look at your needs and see how the manager will help you fulfill them. So here are my thoughts on when to hire each type of candidate.
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My previous post on the biggest mistake of hiring a manager from outside generated considerable interest and feedback. The feedback covered both pros and cons of hiring a manager from outside for small businesses. While many agreed with my assessment that hiring an outside manager is a big mistake, several others raised valid points on the flip side. Those points do have merit and worth mentioning here to be fair.
The drawbacks of hiring an internal candidate has mostly to do with the internal competition / conflict between the manager who gets promoted and others that are not, along with the fact that internal candidate is not likely to bring fresh perspective. In this post I will attempt to summarize the pitfalls that arise when your business does not bring an outsider for the manager job, but instead chooses to promote an internal candidate.
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In earlier post on best practices when hiring a manager I mentioned that the small business owners should first try find an internal candidate and promote someone who is already working with you when you need to hire a manager. The feedback we received on the post as well as discussions with other small business owners has validated this practice. The reason is obvious. Any mistake made in hiring a manager will hurt your business for a long time. The best example of why this is the case can be seen in the difference in last 10 years in the performance of America’s two storied technology companies.
Look at the stock performance of IBM and HP. While IBM has experienced tremendous growth in those 10 years HP has gone in exactly the opposite direction. One of the factors that has contributed to this divergence is the way they have hired CEOs. IBM has had only 2 CEOs in the last 10 years. Not only that, they were both promoted from within and were groomed for several years prior to that. On the flip side, HP has gone through 5 CEOs since 1999 – all of who were hired from outside. I believe this is the primary reason why both companies are where they are. Let me explain the reasons why internal candidate is your best choice when hiring a manager.
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One of the most important decisions you will make as a small business owner is hiring a manager to take care of day-to-day operations of your business. This is the person who will be running the show for better or worse. Hiring a bad manager can hurt your business in a number of ways. The customers will walk away. The employees will complain and leave. The reputation of your business will decline beyond repair. In the end, the business will become a mess that can take long time to recover, if at all.
That is why it is imperative to pay careful attention and take time in hiring manager. I discussed best practices in hiring a manager in earlier post. I mentioned that you need to consider personal qualities of the potential hire – even more than the skills. So what are those qualities you need to look for when hiring a manager?
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Manager is probably the most important person for small businesses, after you. He is the one who manages day-to-day operations when you are not around, ensures that employees perform their job and is responsible for customer satisfaction. Yet many small business owners rush to hire managers without doing sufficient due diligence and end up regretting their decision afterwards and paying price in terms of business decline.
It is true that not every business needs a full-time manager, however in many situations it is a necessity for various reasons. For example, if you are running an absentee business manager is the one who will run the show. In some cases, business operating hours are more than you can provide yourself. Or you may just want to focus on high-priority strategic items and let the manager take care of operations. No matter what your reason is for hiring a manager the best practices described here will help you hire a manager who will help you grow your business.
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A great employee can contribute to your business that 10 good employees combined cannot do. Behind a successful business owner there is a strong lieutenant who stands by him every step of the way and is not afraid to give right advice even if it means disagreeing with the owner. If there is one thing you must do to succeed in your business it is to hire great employees, even if it means paying more, and give them freedom to do the best. The return you get from them makes it more than worth.
Of course, hiring great employees is easier said than done. But it is possible to do it and it starts with spotting the right person. You first need to understand what sets great employees apart from the mediocre ones. One hint – it all starts with attitude. I mentioned in earlier post that when hiring employees you should first look for attitude, not the skills. You can teach old dog new tricks, but you will not be able to straighten its tail, as the saying goes in India. So what skills do great employees have that are not easily found in others?
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