ENTREPRENEUR’S NOTEBOOK — Tips for Hiring People Who Benefit the Bottom Line

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When you own a business, the decision to hire a new employee along with the process of finding the right person can be quite daunting.

With no human resources expert to take charge, you’ll need to tread in what may be relatively unfamiliar territory and handle the entire process yourself. It’s an extremely important decision, as that person will surely have an impact on your bottom line.

But let’s step back for a moment. First of all, are you sure you really need to hire someone at all, or do you just need to get better at organization, delegation and time management?

In addition, have you gone through the numbers to see if, and how, you can afford an addition to your staff?

If you decide you can afford someone, have you thought through the impact that person will have on your bottom line? This is relatively easy to understand if you’re hiring a salesperson, but if you’re taking on a back-office person, it’s not so cut and dried.

You’ll need to determine whether the work this person does will free up time for you or others to sell more, work with more clients, produce more product, or improve service levels so additional sales are generated or customer-retention levels are increased.

After you’ve analyzed the ramifications, the math is easy. Can you cover the cost (salary, benefits, insurance, etc.) of bringing someone new on board? If the math doesn’t work out, there are alternatives.

Instead of hiring someone full time, maybe a part-time employee is the answer. Or maybe finding temporary help to get you through the busiest times makes the most sense, or even using interns from local colleges where their work counts for school credit and provides them with experience without you having to pay salaries.

Essential attributes

Assuming the math works out and shows you can afford a full-time employee, the next step is to draft a complete job description, along with a list of attributes you feel are necessary for the job.

For example, if you’re looking to hire someone in customer service, you probably need a worker who is articulate, caring and tactful. If you’re hiring a bookkeeper or credit manager, you need someone who’s more detail-oriented, not so much a “people person,” and obviously very comfortable with numbers.

You also need to decide how much authority (if any) this person will have. If it’s quite a bit, you’ll want to look for someone who’s bright and decisive, has some knowledge of the business, and is adept at thinking on his or her feet.

Interestingly, many managers tend to focus solely on the skills required to perform the job and don’t give much thought (if any) to the personality traits involved in being successful on the job. Though it will take time and effort, going through the process of drafting a job description complete with attributes necessary for success is extremely important because when a new hire is successful, you should see a positive impact on the bottom line.

Conversely, when a new hire is unsuccessful, that can be costly your investment in dollars, time and missed opportunities will have been totally wasted.

Costly mistakes

And what about new hires whose level of success falls somewhere in the middle? Unfortunately, there’s a price tag for that as well.

Employees who fall into that in-between category are usually there because of a breakdown somewhere in the hiring process and are not totally satisfied with their new job.

Low job satisfaction can equate to high levels of absenteeism (when nothing gets done), lower levels of productivity on the days employees are at work, and over time, probably a higher than normal turnover rate, which means you’ll have to incur the costs of hiring and training all over again.

All of this further accentuates the need for an up-front effort to get the right employee for the right job in the first place. Knowing exactly what you want and need before you start looking is a key element to ensure a successful new hire.

Then, as you go through the interviewing process, it’s probably not a bad idea to have candidates meet other employees with whom they’ll be working. Sometimes others in your company can provide a perspective (either positive or negative) that you don’t have.

This also demonstrates to current employees that they’re important and you value their opinions. That, in turn, helps build morale, loyalty and job satisfaction, which can produce a positive impact on your bottom line.

Through it all, it’s important to recognize that the hiring process cannot and should not be taken lightly. All of the people who work for you have a definite financial impact on your business and must be viewed and managed in that light.

When the hiring process is done correctly, it’s truly a win-win for everyone.

Mark Hafner is president of Celtic Capital Corp. He can be reached at [email protected].

Entrepreneur’s Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact James Klein at (213) 743-1759 with feedback and topic suggestions.

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