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Best Hiring Practices 101a

Although unemployment is still high and small business owners are reluctant to undo some of the painful staffing cuts they’ve had to make, some owners are creeping back into the job market to fill some needed vacancies.  So it seems an appropriate time to talk about a hiring “process.”  While there’s no hiring process that can guarantee a successful hire (one where the employee thrives in the company’s culture and meets or exceeds the company’s performance expectations), there are things you can do to greatly increase the odds in your favor.  For more on this, please read below.

A bad hire, particularly for a key position, can be very, very costly.  Obviously, there are “hard” dollars at stake . . . payroll and benefits for sure, maybe recruiting fees, and maybe training costs.  In fact, executive recruiter Russ Riendeau says he has seen the “hard” costs of a bad hire go as high as $55,000 in a 6-month period.  But there are soft costs as well, not the least of which is “lost opportunity.”  Let’s say we have a narrow window of opportunity to open a new sales territory.  We hire a salesperson, but after six months of poor performance, we have to terminate him.  So whatever we paid him during that time is down the drain, but worse, our window of opportunity is now closed.  Whatever we paid him could be a drop in the bucket compared to the unrealized revenue we had hoped to get from the new sales territory.

So you would think when a small business owner is poised to hire someone, s/he would do everything possible to make it a successful hire.

Unfortunately, unlike public corporations that have HR departments to oversee an effective hiring process, small businesses generally don’t bring on new people very often, so they never develop the skills they need to make smart hiring choices.  Or, impatient with a step-by-step, methodical hiring process, an owner may think, “I’ll just trust my gut instinct” . . . always a bad idea and certain to result in a bad hire.

The good news is, there are things a small company can do to improve its odds of hiring well.  They take time and they take work, but if they result in an effective hiring process (one that increases your odds of hiring well), the effort will easily pay for itself.  So this kicks off a series on “best practices” for a sound hiring process.  Over the next several postings, we’ll be talking about some of those things that will improve your hiring track record.

Meanwhile, if you feel your hiring track record has been so abysmally poor that you need some more intense help, call me.  We should talk.

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