There are some signs that the economy is starting to turn around. If you have been running lean on people, you might be considering hiring someone soon. Happily, there are some very good people out there looking for jobs — but there are many more less-than-good people. The question is, how do you know which is which? You can get lucky only so often. I can tell you that most of the business problems I’ve had over the years have been because of bad hiring.
First of all, understand that entrepreneurs frequently aren’t great at hiring. They tend to like people and to be optimistic, which is dangerous in the hiring process. Here’s a better approach: Think guilty until proven innocent. People lie and are delusional. And some of the worst are the best at interviewing; they have lots of experience!
The problem is that busy entrepreneurs want to get through the hiring process as quickly as possible. During interviews, they spend too much time talking about the great company they are building. And they either don’t take the time to check references or don’t know how to do it. They hear what they want to hear, and they don’t know how to ask the tough questions. For instance, if he was such a great sales person, why did you lay him off?
Here’s another good one: Would you rehire her? The typical corporate response is: No, it’s against our policy to rehire. Well, what if it weren’t your policy? That often brings a long silence, which is when you know you’ve got a problem.
There is also the matter of money, or lack of it. Trying to hire great people requires more money than we can sometimes afford, or at least think we can afford. Looking back, I realize that I would have been better off paying more money for experienced people than getting a bargain on someone too green or too mediocre.
At a time like this, it’s important to remember “The Peter Principle.” The book, written by Laurence J. Peter and Raymond Hull in 1969, describes how people advance in a company — doing a good job and getting promoted until they hit their level of incompetence. Then they stop getting promoted.
I would like to update this theory. These days, instead of not getting promoted, they get laid off, downsized or job-eliminated. (Take your fingers off that keyboard! I’m not saying that all people who are laid off are incompetent!) Then maybe I hire them, thinking I’m getting the other company’s secret sauce. Or you hire them, thinking they are going to help “take you to the next level.” Sometimes it works. Frequently, it does not. You need to improve the odds.
When I was finally ready to hire a showroom manager to oversee my five or six sales consultants a few years back, I interviewed a woman who had been running a lighting showroom with five people. I asked her how many people she had to go through to end up with the five good people she had. She said none. She said everyone she had hired worked out well. I laughed. Then I told her, “Either I have much higher standards than you, or you are some kind of hiring goddess.”
I hired the woman. Her name is Ivy. She is a hiring goddess. She was with me for about six years until she left to move to Portland, Ore., about 10 years ago. Most of the people she hired are still with me. We would interview together, and afterward she would ask me what I thought. I would frequently say that I liked the candidate. She would then proceed to tell me the many reasons why the person would be a horrible hire. I stopped interviewing with her. Her batting average was about 90 percent. Mine was about 50 percent. I found better things to do.
There are other ways to hire for crucial positions. You can use a contingency search firm, which charges a percentage of the yearly salary. I have tried that a few times, and it has never worked out. Maybe I picked the wrong firms.
Another option I have found is hiring a contract recruiter. This person does the interviewing for you and charges by the hour. I asked Miriam Berger, owner of A Hire Authority in Deerfield, Ill., and someone whose services I had used, why companies hired independent contract recruiters. Many companies, she explained, do not hire enough people to justify the expense of a full-time recruiter. The company saves a lot of money by paying the recruiter by the hour instead of a percentage. Plus, the person becomes intimately familiar with the company and can hire more than one person at a time without extra expense.
Establishing a better hiring process will have a profound impact on your business. When you hire better people, not only does your business get better, but your life also gets easier. It’s the ultimate win-win.
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