According to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of the employee's first-year earnings. In most small businesses, the idea that a cost nearly 1/3 of an employee’s earnings could be wasted just by hiring the wrong person into the wrong position could be potentially crippling. Being a new, penny-pinching company has its risks to begin with, not to mention the high-stakes gamble of employees. There are some ways to improve your odds of getting a valuable hire.
1. Follow your gut.
A lot of times when a hire doesn’t work out we often realize there were concerns from the beginning. This can be avoided by putting more trust in your instincts. You know exactly what is needed for your business, although, this can be difficult to put into practice when you’re trying to fill a crucial role.
When it comes to hiring though, any red flags should be addressed. Read the attitude, body language and work relationships. If your instincts are telling you something is off, listen to them. You’ll save yourself painful months and struggling to force a square peg into a round hole. Sometimes it doesn’t mean the person is a bad candidate, they’re just not the right one for your business.
2. Follow up on references.
Asking for and contacting past references is a great opportunity to check into a candidate’s past. Talking to the people he or she has worked for will yield new insights and pinpoint existing ones. This is a free resource that could prove invaluable in preventing a costly mistake. Prevention is always key.
3. Follow advice.
During the interview process, bring in a third party to observe and add to the discovery process. This could be an advisor, manager or even a trusted employee who understands the need for this new position. This can be most helpful in hiring for a function that may not be in your wheelhouse.
Adding a second or third set of eyes and ears can help make sure your candidate is fully vetted and understands exactly what is expected in the work environment. If you’re lucky enough to have more than one qualified applicant, additional analysis and advice will prove extremely valuable in choosing the right one.
4. Follow a courtship.
Think of this as a try-before-you-buy scenario. Hiring someone for a trial period before converting to full-time can give them (and you!) and opportunity to work with the team and evaluate the fit before committing. This won’t work for every position or applicant, and should be used carefully in very small companies. There can be a negative impact on smaller teams with employees moving in and out a lot. Sometimes the trial period may be a week, other positions may deem it necessary for the probationary time to be 30 days or more.
5. Follow your rules.
Setting clear expectations is essential for any management team. Additionally, a new, early-stage company isn’t the place for employees to grow up or cut their teeth. Your business is on the line and survival is key. It is imperative to have well defined role, responsibilities, objectives and results, and expectations for all new hires on day one. If the expectations are not met, there can be no surprise on either side when you take action and move on. Within the probationary period there can be no wiggle room at all.
Make sure your rules are concrete; companywide attendance policies, workplace behavior, and performance evaluation should be adhered to and used to evaluate every employee’s job execution. Also having expectancies and consequences in place will safeguard your business down the road from retaliation.
All in all, hiring can be a gamble. But following some tried and true guidelines can help stack the deck in your favor. Make sure to hire carefully and fire quickly to avoid sinking more money into a ship taking on water. You’ll get it right more often than not.