During his seminars on small business hiring, Mel Kleiman often asks audience members to do something that troubles them deeply: Kleiman instructs them to take the largest denomination bill from their wallet or purse, crumple it up, and then toss it into the crowd.
While some comply, many — especially those holding a $50 or $100 bill — simply refuse and stand perplexed, awaiting the speaker’s explanation of why he’d demand such foolishness from them.
“You just hired the wrong person; how much have you thrown away now?” asks Kleiman, president of Sugar Land, Tex.-based Humetrics, Inc., a consulting firm that offers guidance in hiring hourly workers. “A lot of you will spend two weeks debating what copier to buy for $1,000, but only two hours on hiring a key employee.”
If each employee is an “X” in a company’s success equation — and a greater factor the fewer employees there are in the company — why is hiring given short shrift by so many small business owners?
“It’s hard, because people don’t come with manuals,” says Kleiman, author of the book Hire Tough, Manage Easy. “And even if they did, most of us don’t read the manuals anyway.”
Enlisting and retaining top-quality employees is arguably the toughest challenge a small business owner faces. It requires gauging a candidate’s suitability in terms of intelligence, skills, personality, motivation, and contacts. It’s a rare individual who scores high across the board.
“A lot of consultants try to sell tests that can help with prediction, but the most a good test can do is predict about 20 percent of the variables,” says Stephen Colarelli, professor of industrial and organizational psychology at Central Michigan University. “How successful someone is on the job depends on far more than the person themselves, whether it’s available technology, the business climate, the business plan, or cash flow.”
Understand Every Hire Makes a Difference
Poor hiring is a universal problem at all size companies, but a bad hire hurts a small business far more than it does a large corporation.
“Hiring and personnel comes with the territory, but it’s not what most small business owners want to do,” says Robert Wendover, director of the Aurora, Colo.-based Center for Generational Studies, which researches how various age groups relate in the workplace. “It’s time consuming, frustrating, and ends up on the back burner, which just exacerbates the problem.”
Too often, small business owners put off adding employees until a point of dire need. The result? Hiring anybody that can fill the job quickly. Such hasty shopping will only yield increasingly weaker candidates as the U.S. labor pool grows shallower, warns John Challenger, president of employee-outplacement firm Challenger, Gray & Christmas.
“We’re down to 4.7 percent unemployment nationally (as of January), so it’s becoming more of a seller’s job market,” Challenger says. “It’s soon going to be doubly hard to find good candidates.”
One major misstep small business owners routinely make is putting almost no effort into hiring their lowest-level employees.
“Seventy percent of employees are hourly and most business owners just perceive them as disposable,” Kleiman says. “Yet these are usually the people with the most exposure to your customers.
“Think about it: What’s the impact of one employee saying the right thing at the right time, versus the wrong thing at the wrong time? If yours is a small enough company, you should be making the final decision on every person hired.”
Determine Upfront Who You’re Looking For