If you are a small business owner, you know that every hire you make is critical to helping your business run smoothly. As the old saying goes, “one bad apple spoils the whole bunch,” and in the small business world, this statement couldn’t be more true.
In many small businesses, without formal human resources departments, it frequently falls on the business owner or owners to make the call on whether to hire someone. When your business is in a growth stage and you are feeling the pressure to staff up quickly, you may feel obliged to hire additional employees without putting in the time it takes to conduct a thorough search for the best individuals.
But hiring too quickly may mean that you are sacrificing long-term business quality for short-term financial gain. As Apple founder Steve Jobs is often quoted as saying, “A small team of A+ players can run circles around a giant team of B and C players.”
Four Reasons Not to Hire in Haste …
Here are four reasons why you should hold out and not make that immediate hire for your team:
1. Not making the right hire will likely cause your business to lose money in both the short and long term.
The cost of eliminating an employee that is not working out can range from 30% to 150% of an employee’s annual salary, based on their responsibilities. (The more senior the bad hire, the more costly it will be to replace them.)
2. If your quick hire ends up as a mediocre/poor fit with your team of A-Players, it may disrupt the team’s productivity.
According to ClearCompany data, “97% of employees and executives believe lack of alignment within a team impacts the outcome of a task or project.” It works to your advantage to not disrupt the delicate balance on a high functioning team.
3. Your own reputation as a hiring manager will suffer.
If you make a poor hire, your employees may start to doubt your judgment: According to Robert Half data, 20% of the time, a bad hire will result in decreased confidence in management’s ability to make good hiring decisions. Additionally, 53% of business owners note that making a poor hire has increased the amount of stress that has been put on existing employees.
4. You may miss out on a great hire who is just around the corner.
Hiring markets are fairly fluid so it usually makes sense to wait for the right candidate to come along than to fill a position with someone who really isn’t the best fit for the job. Of course, it is important to make sure you advertise in the places where the best candidates are most likely to see your job posting.
… and Four Ways to Improve Your Process
You can count on a lot less stress if you make the right hire. So remember the adage, “Hire Slow, Fire Fast,” as these four words are especially true when it comes to staffing your small business. Here’s a few tips to increase your chances of hiring well.
1. Try a temporary solution.
If you do urgently need an employee now, perhaps to help out during the busy holiday season, but aren’t sure if this person is the right fit for the long term, you could offer him or her a trial or probationary period of employment for say, their first 30 to 60 days.
During this time, you’re likely to learn if they are productive and a good cultural fit for your business. During the trial period, make sure you check in regularly with your existing employees to assess how well they feel the new employee fits in with the team.
And there are other short-term options: Consider using temporary or contract workers instead of — or prior to — making a permanent hiring decision. You may also have the option of offering your existing employees overtime work, or you can take on more of the day-to-day work yourself temporarily.
2. Remember where your best hires came from.
Always remember how you made your best hire:
- Was it through a recommendation from a friend?
- Or a fellow colleague?
- Did another employee suggest someone they knew?
- Does a neighbor you know well have a great network?
It makes sense to repeat the methods that have worked for you in the past. And don’t forget to thank those who are responsible for recommending your best hires.
3. Look at your operations — and your tech. Do you really need to hire?
Sometimes what looks like a hiring issue is actually an operational issue.
Perhaps you own a bakery and one of your five morning shop clerks quits. Look at your operations before rushing to hire their replacement.
For example, rather than having all five employees fulfilling customer orders and competing for the one cash register, you might implement a four-person system where one employee takes orders and operates the cash register, while three employees fulfill the orders.
How’s your technical support?
For example, if a bookkeeper quits, you may be able to deploy reasonably priced software that provides an effective solution. Also stay abreast of new technologies that can help your existing—and any future—employees do better work faster. Those A+ players Steve Jobs referenced also know how to maximize technology.
4. Recover quickly from a bad hire.
No matter how careful you are, it’s still possible to make the wrong hiring decision. According to the Robert Half data, 81% of employers admit to having done so! This is the one situation where moving faster is always in your best interest.
If your process fails and you make a bad hire, the first thing to do — in order to make sure your employees remain confident in your abilities — is to address the situation quickly: Once you realize a new hire is the wrong person for the job, there’s no benefit in delaying facing the facts. You may want to apologize to your staff for the disruption caused to their work lives, and stay accountable to yourself and your team as you work to replace the wrong hire with the right one.
As a small business owner, you’re making decisions every day that affect your business’s long-term success. For more tips to help you learn and grow as a small business owner, subscribe to the Small Biz Ahead weekly e-newsletter.