Have clarity on what the position is, go with your gut, have criteria to measure new staff, use the probation period correctly

David FullerThis week, I’m picking my basketball team for the year. This isn’t a sports fantasy team, it’s a high school basketball team with 12 real people. The stakes are high for me.

While I’ll be playing to win, I may or may not pick what seem to be the most talented players, because team dynamics are of far greater importance than individual performance.

If I pick the wrong players, I could have five months of headaches and dysfunction. Even if we win, with the wrong players, the stress and drama of leading the team wouldn’t be worth the effort.

So how does this relate to business?

Every day worldwide, business leaders like you and I are picking our teams. We’re hiring and firing people. Others are leaving our organizations, retiring and moving on, and we need to fill the positions.

The stakes are high. Who we bring onto our team can change the dynamics. These new hires can bring drama, dysfunction and distress. Or, if we hire properly, they can help take our company to another level of success.

So what’s the actual cost of making a poor hire?

According to a survey by Careerbuilder.com, 75 per cent of employers said that they’ve hired the wrong person at one time or another. Employers surveyed pegged the actual cost of a bad hire at $17,000 on average. Other estimates suggest that the actual cost of any new hire is 60 per cent of the first-year wages. This is no small amount for a small business owner.

And depending on the position, even for small businesses, hiring the wrong person can often add up to much more. I know over the years that I’ve lost hundreds of thousands of dollars because I made mistakes hiring or kept unsuitable people on too long. Tony Hsieh, the founder of Zappos, has said that his bad hires have cost him over $100 million.

Every time we bring a new person onto our work team, there’s a productivity loss. Not only does it take months or even a year to get a new person up to speed in their job, the time and energy spent on recruiting, hiring, training and on-boarding a new employee is substantial. A three-year study by LeadershipIQ of more than 300 companies hiring over 20,000 employees found that 46 per cent of employees don’t work out.

You probably think that many companies hire people who don’t have the right skill set and as a result they have to fire them. The truth is that this only accounts for 11 per cent of the failures. The reasons so many people don’t work out are:

  • 26 per cent of new hires fail because they aren’t coachable, they think they have all the answers and aren’t ready to look at things from the company perspective;
  • 23 per cent fail because they can’t properly manage their emotions or deal with others on the team;
  • 17 per cent don’t work out because they aren’t motivated;
  • 15 per cent are unsuccessful because they have the wrong temperament for the job.

So what do we have to do to get the right team?

Have clarity on what the position is.

Often we create jobs without having a clear understanding of what that position entails and the value we need the position to generate.

Having an empty position in our company is a great time to reconsider how the business is working and what type of person we need to fill that spot. Once we have this understanding and have defined how much we can afford to pay, we need to advertise it in such a way that we create interest for our ideal employee.

Go with your gut.

Unless you have a track record of picking the wrong people, you’ll have a good feeling about whether someone is right or not.

Once we were hiring a new employee for our business and I was doing interviews with our manager. We had a number of people come through that day. Some were very qualified but nobody struck us as perfect; one fellow came across as downright dangerous.

Our last interview was a fellow who came in and nailed the interview. When he left, we knew instinctively that he was the right person. He had some technical qualifications, but more importantly he had a great attitude. After we checked his references, we hired him and he was fabulous.

Have criteria to measure them.

Often when my clients ask me how to hire people for their companies, I take them back to their core values. What are the things that are really important to your company?

The core values of one company might be honesty, community, integrity, fun and drive. If those are important, bring them into the interview and pick the right person based on how they fit with those values.

Use your probation period properly.

Usually when we hire employees, we set a probation period in which we can evaluate the employee and ensure that they’re a good fit. Many companies fail to use this time to ensure that they’ve made a good decision.

On-boarding, training and reviewing the employee to confirm our choice are essential. Often our new employees don’t work out because we fail to support them through this period properly and ensure that they settle in and fit into the culture.

So I’ll pick my team carefully this week and so should you. The stakes are high and I’ll be looking for attitude over aptitude, as you should. I’m looking forward to an exciting basketball season filled with enthusiasm, learning and laughter.

If I can get my team to be committed to each other and to the pursuit of the game, the winning will come naturally.

Troy Media columnist David Fuller, MBA, is a certified professional business coach and author who helps business leaders ensure that their companies are successful. David is author of the book Profit Yourself Healthy. Email dave@profityourselfhealthy.com.


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