How Do You Hire?

Many of my clients are CEOs and owners of mid-sized businesses, and do you know what one of their most challenging problems is?  It is saying no to a friend or relative who needs a job.  Can you relate to this?

In the last year, have your important new hires been made because:

• Your cousin lost his job
• Your neighbor made a career change
• Had you an overflow of orders at Christmas time?

Perhaps you hired extra staff during the Christmas season to help your business fill orders, and then these staff members became a part of the team, and your managers didn’t want to let them go when the New Year began, and business slowed.

If you are the CEO of a mid-sized company, one of the advantages – or so you thought – is that you can hire whom you like, but this may be a fallacy.  Too many owners of mid-sized companies find themselves boxed into difficult hiring dilemmas.  The fact that they can make decisions themselves can also be their downfall: when others take advantage of this.  For instance, when you get a call from your cousin and brother-in-law who just got laid off, you know what to expect.  Or when you hear about a neighbor making a tough career change, and he wants to have lunch.  He comes to you and wants your advice, but more than that, he needs a job to feed his family.  Of course, you want to be a good relative or good neighbor, whatever the case may be.  But these can result in hiring mistakes.  How do you know that your cousin, or neighbor, is qualified to work in a company like yours – whether you are designing new software or selling office chairs?

As the CEO of a mid-sized company, it’s important that you have some managers on your team who can help you determine where new positions are needed, and help you systematize the hiring process.

Your hiring process should be preceded by:

• A clearly defined job description
• An interview process with several highly skilled candidates
• A clear idea of how this new hire would integrate into his department and into the company as a whole
• A cost/analysis to balance the expense of hiring the employee with the resulting revenue he should generate
• To whom this new hire should report

Has your company done this kind of planning?  Perhaps, if you do not have a designated Human Resources department, you have individual staff members who are highly skilled in interviewing and vetting candidates.  Perhaps they work throughout the company for you.  Before you run into a busy time when orders are swamping your business, you should enlist these staff members to professionalize your hiring processes.

As the CEO of a mid-sized company, perhaps you hired the first 20 employees, and after that, you vetted those which your key staff hired.  With a company with less than 500 employees, your staff may feel proud of the close-knit community your business has created.  But some experts warn that mid-sized companies are more vulnerable to bad hires.  If a bad hire comes on board and shakes up the status quo, it may take months – and thousands of dollars – to undo the damage.  Also, experts advise that when your company is smaller than the huge enterprise companies that might dominate your region, you may not have top talent knocking at your door. So the need to hire strategically is, even more, important.

If you company is expanding quickly, and the overflow of orders during the holiday season looks like it will continue, if you have not already hired a Human Resources department, it’s time to do so.  Each manager cannot be expected to keep up with all of the changing laws related to employee benefits, taxes,  health insurance, and other details that hiring employees involve.  As soon as you find yourself needing some help with your hiring process, get a professional involved.

In an article about a trend for some companies to go with HR (Human Resources) departments, The Wall Street Journal reported:

“Outback Steakhouse, a unit of Bloomin’ Brands Inc., had no HR department before 2008 but created one not long after the Equal Employment Opportunity Commission sued the restaurant chain for sex discrimination. In 2009, Outback paid $19 million to settle the case and agreed to add an executive-level HR position.”

This example is the worst-case scenario and not one that will affect your company – we hope – but just because you are the CEO of a mid-sized company does not mean that you have to say “yes” to every friend, relative, or “friend-of-a-friend” who needs a job.  Professionalize your hiring process, outsources to a human resources consulting firm, or start your HR department. You’ll be glad you did.

If you would like assistance designing a Human Resources department for your mid-sized business, contact a senior consultant at Ember Carriers at (513) 984-9333 for a free strategy session about HR.

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