Before you pony up $50,000 for a new truck, you do some serious research. Hiring decisions deserve at least the same scrutiny. When you hire a $15 per hour employee, he'll cost you about $10,000 in hiring and training costs, plus $30,000 in salary and another $7,500 in tax and benefits. That's $47,500 in the first year.
Unfortunately, owners often hire under pressure, without a plan, process or hard data, and end up with whatever warm body is available. Sometimes you get lucky, usually not, and sometimes it's a real disaster. Remember the $10,000 in hiring and training is what it costs you every time an employee turns over.
A better way
First, your business has to be attractive. Everybody in town knows who's great to work for and who isn't, and the great employees want to work for the best employers. If you have a reputation as "Attilla the Boss" and your business is total chaos, who would want to work for you?
Being an attractive employer isn't just about money. It's a package of money, plus, company image, benefits, working conditions, advancement opportunities and many other things. You can't be the most appealing to every potential employee, but your overall reputation has to be positive and a cut above the crowd.
Create a process
When looking for a job candidate, use the following process:
Job description: Create a job description, including what results are expected from the position, how are they measured, and what actions and duties must be performed to create those results.
Ideal candidate: Define your ideal candidate, including what skills, experience, education, training and attitudes are required to get the results you specified in the job description.
Finding candidates: Absolutely the best sources are people you know, who in turn know candidates, such as current employees, friends, suppliers, subs, etc. A distant second are trade schools, union halls and agencies.
Basic information: Gather basic information from job applications to collect the data you need from your candidate requirements, and require three references.
Screen: Using their applications, compare the candidates' qualifications and experience to your standards for the ideal candidate. Pick the top three candidates.
Interview: Interview your top three candidates for a minimum of 30 minutes. Have questions structured to cover all the key requirements and write down your thoughts. Keep probing until you get the answers you need. Have the candidate's potential direct supervisor involved in this process. Multiple rounds of interviews are important for higher positions.
Pick your winner: Compare notes, pick your winner and have a backup. Nobody's ideal, but they should be close. Do not hire a substandard person just to fill the slot. If there's no one close to your standards, start over.
Check references: This is critical. Have your questions prepared and don't be shy. You're getting ready to invest a lot of money and effort.
Background check: Do drug, criminal and credit screenings, and verify identification. These are all excellent investments to make before hiring an individual.
Pay top dollar: Top-quality tools cost more, but are a far better value in the long run. The same goes when hiring a person for a specific job.
Hiring great people isn't too tough, but you won't get them unless you make the investment. Once you improve your hiring process, you will find the best people for your company.
Jayme Broudy is the founder and principal of Contractor's Business School, a coaching, training and consulting firm, specializing in helping contractors produce more profit in less time. Visit www.contractorsbusinessschool.com or call 800.527.7545 to get information on business strategies.