guest commentary by David Potts
Editor’s note: David Potts is a certified public accountant with more than 33 years experience. Although every effort is made to provide you accurate and timely tax information, it is general in nature and not specific to your facts and circumstances. Consult a qualified tax professional to discuss your particular case. Feel free to e-mail topic suggestions or questions to email@example.com
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According to the math, hiring the right person for a job is more important to a small business’ success than a large business.
Here’s the math. An owner of a small business, a local florist for example, may have a total staff of five people including the owner. When one employee of this florist fails to perform their duties adequately then 20% of the workforce is mediocre. If the florist’s designer is a hypochondriac and feels ill the Saturday before Mother’s Day and calls in sick, then 20% of the workforce called in sick.
The store profit will surely take a hit, but worse, customer loyalty could be lost. By contrast, a larger businesses with 100 employees, one bad employee is only 1% of the work force and this bad employee would have much less impact on business operations.
No matter what the size of a business, employees matter. Who you hire will affect your business’ bottom line as well as its reputation. The smaller the business, the more overall impact employees have on its total operations. Yet many small businesses hurry to hire a person and when a person is revealed to be a poor performer, they are slow to fire the person.
A business owner who values people might instead tries to help the bad employee with additional training. Even worse, a small business owner might ignore the problem because he is short on time and energy due to the increased workload to cover for the employee’s inadequate performance. A bad employee equals bad business.
So what do you do to hire a good employee?
If you search the Internet, you find suggestions like “challenge them before you say hello” and “play games to break the ice.” If you own a small business without a human resource department, let me suggest a more practical approach, an approach I’ve learned after 29 years of business experience.
First, keep in mind as you start the hiring process the type of person you want to hire is seldom unemployed and in the job market. Because of their personal character and their skill set they don’t have trouble finding and keeping a job. This means at any one time there is less excellent potential employees in the job market than mediocre ones. Matching the timing of when you need to hire a person and when the best employee for the job is looking for a new position depends a bit on luck.
You can increase the odds of hiring the right person for the job if you are patient. The best employees need a compelling reason to look for another job. Their reason could be a change in management at their current job or the need to move from their current geographical location to be closer to aging parents. Their reasons for changing jobs are usually personal and not because their previous boss didn’t see their genius so they quit.
Next, when reading a resume be skeptical of the applicant’s claims. I once read about the results of a study that showed 40% of all applicants lie on their resumes. This same group of people will lie to you about having to stay home because they are sick. They will lie to an unhappy customer to deflect blame away from their self. They are liars. Liars are a liability, not an asset to your business. This leads to the next step.
Read the resume, don’t scan the resume. Then think like Sherlock Holmes. Look at the the time line of their employment history. Be wary of any gap in time where they say they were self-employed. They could have been in jail. If you decide to interview this applicant, ask a lot of questions about the time they worked for their self.
When you decide to interview an applicant, you need to be as prepared for the interview as the applicant. You can find plenty of information on how to put applicants under some duress to see how they respond, how to read body language, and how to this or that. Your best bet is to ask plenty of questions about their particular skill sets, then listen. If practical, test their knowledge and abilities.
In an interview, I’m most impressed when I get to the part where I ask the job applicant if they have any questions and they do. But the questions that impress me most are the ones they ask about Potts & Company’s culture and what opportunities we provide for growth and advancement. It indicates they are confident in their abilities and may not be desperate to have just any job.
If you have decided to hire them, before you present an offer you must check their references. Granted the applicant has carefully selected these references and might even include their preacher. But sometimes their references when questioned give you more information than the applicant anticipates. Don’t be afraid to ask each reference interviewed if they know anybody else that worked with the applicant in the past and if they do ask this reference for their name and contact information.
I know I am a CPA and not a human resource professional. I’m not a trained psychologist or a behaviorist. Why should you listen to me about hiring people? I own a small business and have hired my share of mediocre employees. I have also hired a number of excellent people. The ones who work with me now are in the excellent category. Nearly 30 years of business experience has shown me the difference between excellent workers and inadequate workers.
The difference between these excellent people and mediocre people affects the business’ profitability, productivity and efficiency, and customer satisfaction. Your success as a business is directly related to the quality of its people.
My most sage advice? If you hire the wrong person for the job be quick to terminate their employment. A business’ first responsibility is to their customers. A great employee understands this.