How To: Hire Well
Your people are your greatest asset. Yet many small-business owners do not have an interview strategy, which can lead to expensive hiring mistakes.
“The impact of a single small-business hire is drastically more important than in a big company,” says David Lewis, CEO of human resources consulting firm OperationsInc and AllCountyJobs.com. “The difference between 1/25 of a staff being ineffective versus 1/200 is huge.” And the damage of a bad hire in a staff as small as five could be catastrophic.
Many business owners take the hiring process for granted. Interviewing job candidates is a fine skill that can and should be honed, says Claudio Fernández-Aráoz, a senior adviser at executive search firm Egon Zehnder and the author of It's Not the How or the What but the Who: Succeed by Surrounding Yourself with the Best. “Research shows that the best professional interviewers have an amazingly high predictive accuracy,” he says. “Effective interviewing is not an art or the result of an intuition or a gut feeling. It’s a craft and a discipline that can be learned and should be taught.”
Here are the essential elements of a successful interview:
Have a plan. Go into the interview with a goal. Are you looking to assess hard skills? Personality fit? Do a favor for the friend who referred his cousin? “Interviewing is time-consuming—and critical,” Lewis says. “Think through what you want to accomplish and what you will ask.”
Be objective. “The biggest mistake is allowing emotion to compromise the hire,” Lewis says. “If you already have a preconceived notion that the person is a great fit on paper or because physically they look like they came out of central casting, it can become love at first sight.”
Don’t be overly impressed by flashy résumés. “A typical mistake is to hire the guy who was successful with huge support from great colleagues, great systems, a great brand, great platforms and great clients,” Aráoz says. Instead, ask candidates how they would fit into a small organization. Present pointed questions about how they would handle specific situations central to the position for which you’re interviewing.
Ask questions specific to the job duties—or ask candidates to prove their skills. “You don’t hire a boiler technician by sitting across the table from them and looking at their résumé,” says Chuck Blakeman, founder of the small-business consulting firm Crankset Group and author of Why Employees Are Always a Bad Idea. “Instead, take them down to fix a broken boiler.” Need a marketing whiz? Ask them to create a marketing plan and write a news release for a product or project you sold years ago.
If you’re interviewing for a project manager to work within a tight budget on challenging deadlines, just ask: “Did you ever have to manage a project with a tight budget and a challenging deadline? What was the situation? What was your exact role? What did you do? What were the consequences?”
Hire for culture. “First you have to define your culture—otherwise in a small business the new hire will define it for you,” Blakeman says. Once you are sure the person is a skill fit, focus on personality and chemistry.
Take your time. The biggest mistake many small-business owners make is rushing through the hiring process, Blakeman says. Consider the time you spend hiring to be an investment in your greatest asset.
Company: Looney Labs, a games-maker based in College Park, Md.
Technique: Schedule team interviews in which a joke is requested.
Results: Looney reports 100 percent hiring success.
When my husband and I started the company, our biggest mistake was hiring friends. It never worked out. Then six years ago we started working with a recruiter. She knows us really well and is excellent, always finding us a handful of very qualified people to interview.
A candidate’s first interview is with our three-person executive team. We spend a lot of time doing the talking—we’re an unusual company, very small, family-owned and passionate about our product. We want to make sure potential hires understand what is required in the job and decide whether they feel they would be a good fit. If we sense they would fit into our team, we invite them back and send them away with three things: a personality test, one of our games and a plush flower—a fun tchotchke.
The second interview is with our entire eight-person team. By then the personality test results have been shared with our employees, who also know their own scores. That’s a conversation starter, but then each employee is encouraged to find out whether the candidate has the skills and personality needed to work with them. I like to find out if the candidates played the game they took home. The mood is really a casual free-for-all, designed to help the person let his or her true personality show.
And then, sometime into the hour-long period, my husband, Andrew, tells a joke. We see how the candidate reacts, and he asks the person to share his or her favorite joke. Some freeze. Some are quick.
No part of the process is a deal-breaker. Everything is designed to make sure they will fit in with us. After that final interview, the executive team takes input from everyone and makes the decision.
Several of our hires told us they really felt a sense of what it was to like to work here before they accepted the job. And after the final interview, many candidates let us know that they really, really want to work with us.
Through this process, our hiring success has been 100 percent. Interviewing well is such a critical function of our business. We can’t afford a bad hire.
Company: My Internet Marketing Partner, a web design and marketing firm based in Charlotte, N.C.
Technique: Interview candidates online through a skills assessment first, then weed out whiners.
Results: The company has grown by 240 percent in the past year, since implementation.
About a year ago I had to let someone go after only six months on the job. It cost me a lot of time and money, and in hindsight I realized that I didn’t test the person’s actual skills before hiring. I had hired on a gut feeling. Since then I created a structured system for finding and hiring the right candidates based on objective criteria.
Now, before they even come in to meet me, each potential hire has gone through a three-step vetting process. First I create a detailed job description and post it on various industry forums. Included are instructions to send a résumé to an email address with a specific subject line and to answer three simple questions—one of which is their hourly rate. In a quick glance of the subject line, I can disqualify a huge number of contenders for failure to follow directions. The salary question is also powerful—candidates with high confidence in their skills are more likely to ask for a high rate and are more likely to deserve it.
I then email the remaining applicants a link to an online questionnaire with questions specific to the position. A year ago I posted for a programmer, so those questions focused on coding language and identifying issues with a sample design. That batch is narrowed to about 12 candidates who go through a third round of more granular questions related to the position.
Finally, I invite three candidates in to interview. By then I’m confident each is qualified, and I’m mainly looking for a personality fit. The meeting lasts from 30 to 50 minutes and I plan the questions ahead of time. I spend some time talking about how important our work is to our clients’ businesses, and therefore their lives. I look for how they respond, whether they present themselves professionally, and if they have a good sense of humor about themselves. One question I always ask is: “What did you not like about your previous job?” If someone is a chronic whiner, this question opens a can of worms.
Gut instincts still play a big role in the final hiring decision. But in the past year I have hired four people—bringing my total staff to five—and all have been hugely successful. This has completely changed my company, freeing me to focus on sales while more than doubling business in only one year.
Founder and Managing Director
Company: The Expert Institute, an online platform that refers professional firms to experts they need
Technique: Videoconference with potential hires, then invite standouts to a group interview.
Results: Turnover is at zero, growth has been huge, and the team is happy.
One of the great perks of being a business owner is that I get to pick who is on my team. I’ve worked at companies in the past where there was a weak link, and that was no fun.
When we start the vetting process, we sort through résumés for relevant experience and skills. One in 10 is asked to interview via videoconference. Not only does this save us time, but you can also learn a lot about people in their own environment. They are more likely to be relaxed and show their true personalities. You can also tell about their professionalism and commitment to their work: Once someone met us virtually from a sandwich shop wearing an old T-shirt and using a lousy Internet connection. On the other hand, when candidates get dressed up and make sure they are in an attractive, quiet environment, I have a good sense of how they will interact with clients.
About one in 10 of the video interviews lead to an in-person sit-down where they meet with our entire team. I want to learn what the candidate’s personality is and his passions or work ethic. Members of the team are encouraged to ask about hobbies, travel and working style.
I look for people invested in their careers who have something to prove—that sums up our whole team. I also want to see that they are genuinely caring and often ask, “Why do you work so hard?” I don’t want to hear that they just want to buy crap for themselves, but rather to make a good life for their families or give back to the community.
Finally I get feedback from the whole team, and either I or the direct manager makes the final decision. Any doubts from the team are noted in a log and reviewed 100 days after the hire. The whole process takes about 50 hours. But the investment is worthwhile. Thanks to this system, we’ve had no turnover in the past two years and our revenue has more than doubled annually. Plus we’re having tons of fun.
So what about firing well? Learn how to fire an employee—if you must.
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