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The New Entrepreneur: Picking People

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Change of tack today, as I’d like to tackle the subject of dealing with employees. Unless you are setting up your business as a sole trader, at some point you are going to take on staff, and you need to be able to manage them effectively if you want your buesiness to succeed. This post highlights some of the issues you should bear in mind.

As always, there will be laws and regulations specific to your territory and industry that you need to adhere to. I’m not going to go into all of them here, but be sure acquaint yourself with the rules governing things such as the minimum wage, redundancy pay, pensions and discrimination legislation. A friendly lawyer will be able to give you the basics, but it’s best to make sure you are aware of your obligations and duties to employees before you actually take anyone on.

As I have said in earlier posts, employees are going to be the biggest cost that your business has to bear, and you should put off recruitment for as long as possible when you are establishing yourself. However, once you decide that you need to recruit employees, it’s important to determine what kind of staff you want. Ideally, they will fill a skills gap that you yourself are unable to. For instance, if you are running a marketing consultancy but are rubbish at online communication, you would want to recruit somebody with experience of web marketing campaigns and awareness of social media as a communication tool. The objective of recruitment is not to make sure there’s a body at every desk; rather, it is to make sure that your business can do all potential tasks to best of its abilities.

When searching for employees, the easiest (and cheapest) way to do so is probably through word of mouth amongst friends, family and business acquaintances. Personally, I believe in keeping family and business as far apart as possible, but if you are comfortable working with and managing somebody with whom you already have a relationship, this is the first option to try. If it doesn’t yield the employees you are looking for, it is then time to advertise. As a young company who probably aren’t looking to recruit board members, it’s easier to ask employees to fill in a form rather than sifting through piles of CVs. Make the form as clear and concise as possible, being careful not to ask any questions that could be construed as discriminatory. Having all applicants fill out the same form is useful not only for making comparison quick and easy, but it can also serve as a framework for interviews when you start whittling down your list of potential employees.

The most important thing when interviewing candidates for a position is that you need to shut up. I know you probably want to give potential employees chapter and verse on your exciting new business, but now is not the time. You can get round to that on their orientation day. Instead, the interview is the chance to get more information and some insight into the people with whom you are going to be spending at least five days a week. Ask open-ended questions which need more than a “Yes” or “No” answer and make detailed notes on the responses you get. The type of questions you should be asking should relate to candidates’ careers to date, the skills they can bring to the table and their overall attitude to work in general. They should also be able to demonstrate that they have read the job specification that you used in any advertisements and are able to show how their skills fulfil it. Make sure you have enough time for each interview and are free from interruptions and distractions while conducting them. Afterwards, you can take your time to go over your notes and start the process of coming to a decision about who to hire.

I know it is difficult, but you shouldn’t go on first impressions when making a recruitment decision. Gut instinct has its place, but you need to be as objective as possible if you are going to hire the right person for your business. Go over your interview notes and place the candidates who most closely match the skillset that you are looking for in the shortlist. Consider also the kind of salary each candidate will expect, whether they have expressed a willingness to take on extra duties or do further training, and also how long they are likely to stay with your business before moving on. Select that candidate that is the best fit. Don’t, whatever you do, take the candidate you “like” best. I know someone who does this: he has a failing ringtone business filled with beautiful but incompetent redheads and blondes.

Once you have decided on the suitable candidates, you can then make them a conditional offer. Conditions could be the provision of suitable references, or satisfactory completion of a probation period of a couple of months. Once these conditions have been filled, you can then offer them a full employment contract. Again, this is something that you might be more comfortable getting a lawyer to deal with, but it should basically cover the job description of your new employee, their salary, their rights and obligations, and any company procedures you have established. This is one area where there is no such thing as too much detail: make sure that everything is included. This ensures that you never have to put up with the “It doesn’t say that in my contract” response to any requests.

Effective people management lowers staff turnover, which is costly and time-consuming, so the next post in the series will deal with actually managing people once your company has them.

[Image by KM & G-Morris]

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