For most people who choose to go to college and get a degree, the belief is that you will definitely learn what you need to be successful in our career. But even if you get a business management degree, you won’t learn the most important thing in managing employees. That is, how to rent one. And yet, as you build your career and maybe even start a business, your ability to recruit and hire people may be the single most important factor in your ultimate success. And there are costs associated with not properly hiring, despite the impact on your career.
While not exact, the U.S. Department of Labor’s estimate is simple: The average cost of a poor hiring decision is at least 30 percent of the individual’s expected earnings in the first year. If you hire an employee with an annual income of $90,000, the cost to the organization could be $30,000. There are also higher costs, which include time and energy spent managing poor performance, lost productivity due to disrupted projects, and lack of continuity of work. Finally, and perhaps most importantly, there is the negative impact on team morale and the associated stress.
The first step to success in hiring properly is understanding the importance of hiring and the fact that you need to learn this skill. No one is born to employ people; it is a learned matter gained through knowledge, mentorship, experience and then applying what you have learned to develop the ability to hire well. Here are some insights to help you get better at hiring people.
Investors invest in people. As much as you love your startup and believe that the market conditions are perfect, the truth is that most companies will have to adapt and change. Uber, PayPal, Instagram and hundreds of other companies all started with one solution and had to switch to another. What made them successful? The team. What all those companies had in common was a strong team that was able to take feedback from the market and build new products until they became the success they are today. Your goal in hiring is to build a great team at all levels of the company, from the interns to the C-suite.
Any hire can be important. Nothing is more dangerous to a startup than one bad hire, one person who doesn’t fit the culture or just isn’t good enough at their job. Even if you resolve the situation quickly, you will get distracted and lose a lot of time. Startups don’t have the luxury of making a lot of mistakes. Bad hiring is one of the riskiest and most costly mistakes you can make at a startup. Empowering your team and getting out of the way is key, but it’s only possible if you hire the right people.
High performers attract high performers. The potential draw for talented job seekers is joining a team of highly skilled colleagues. Despite all the potential problems that come with bad staff, there’s a huge benefit to doing it right. With every great person that joins your team, the team gets stronger and it also becomes easier to attract the next person. The key is, how do you hire the first employee if you don’t already have a great team? The good news is that you already have a team even before you are first hired. You and your co-founder(s) are a team. Your investor is on your team. Perhaps there is a strong advisor on your team. You’ve got a team long before you hire that first employee, even if it doesn’t feel like it.
Culture is the team. It is difficult to create and manage a high performing team. Great teams are generally a group of great individuals mixed together in the right way. The glue between the great coder and the social media marketer and the magic that enables sales to sell the right solution is having the right culture. Culture isn’t about free food, yoga class on Tuesdays, or other perks. It’s about shared values and beliefs and the company’s mission that brings everyone together. A great culture helps the company to be successful and will greatly help it survive in difficult times. The importance of culture has a major impact on your hiring. Every person you bring in in the early days changes your culture, for good or bad. It’s crucial to find out if someone fits the culture or if someone is the right person for your team. Hire for culture first and then measure if they have the skills and knowledge to do the job.
ABL. Always looking. Hiring isn’t magic, and it’s not luck – it’s a skill you have to develop. You may be good at it, but if not, you can learn to get better. And remember, you’re always hiring. It doesn’t matter if you’re interviewing at the office or at a networking event. You may not be looking for someone right now, but you will be in the near future or at your next job or company. Finding and assessing real talent can be difficult, so always be on the lookout because you never know when you’ll need someone you’ve already met.