Dear Jayme,
Where are all the good employees? Why I can't seem to hire them?
Clint
Dear Clint:
When you hire a $15/hour employee, it will cost you about $10,000 in hiring and training costs, plus $30,000 in salary and another $7,500 in taxes and benefits. That's $47,500 in the first year.
The new employee can also drastically affect other employees, your reputation and your customers, and he'll have access to your expensive tools and equipment.
Before you pony up $50,000 for a new truck, you do some serious research. Hiring decisions deserve at least the same scrutiny.
Unfortunately, contractors often hire under pressure, without a plan, process or hard data and end up with whatever warm body is available. Sometimes you get lucky-usually not-and sometimes it's a real disaster.
(Remember the $10,000 in hiring and training? That's what it costs you every time a $15 employee turns over-no kidding.)
So what's a better way?
First, your business has to be attractive.
Everybody in town knows who's great to work for and who isn't, and the great employees (like everyone else) want to work for the best contractors. If you have a rep as Attilla the Boss, and your business is total chaos, who'd want to work for you? The best people? No.
Being an attractive employer isn't just about money. It's a package of money plus company image, benefits, working conditions, advancement opportunities and many other things. You can't be the most appealing to every potential employee, but your overall reputation has to be positive and a cut above the crowd. If it's only mediocre, you'll tend to attract only mediocre people. If it's lousy....you know the result.
Then, create/use a process:
Create a Detailed Job Description
What results are expected from the position? How are they measured? What actions/duties must be performed to create those results?
Define the Ideal Candidate
What skills, experience, education, training and attitudes are required to get the results you specified in the job description?
Find the Candidates
Absolutely the best sources are people you know who in turn know candidates such as current employees, friends, suppliers, subs, etc. A distant second are trade schools, union halls and agencies. Ads are dead last.
Gather Basic Information
Use job applications to collect the data you need from your "ideal candidate" requirements, and require three references.
Screen
Using their applications, compare the candidates' qualifications and experience to your standards for your ideal candidate requirements. Pick the top three.
Interview the Top Three
Spend a half hour minimum, uninterrupted, in a private office (not an informal bull session at the donut shop) interviewing. Have questions structured to cover all the key requirements, and write down your thoughts. Keep probing until you get the answers you need. Have the candidate's potential direct supervisor involved in this process. For higher positions, multiple rounds of interviews are important.
Compare Notes, Pick Your Winner and a Backup
Nobody's ideal, but they should be close. Note: Do not hire a substandard person just to fill the slot. If there's no one close to your standards, start over.
Check references
This is critical. Have your questions prepared, and don't be shy because you're getting ready to invest a lot of money and effort.
Do Drug/Criminal/Credit Screens and Verify ID
Conducting these screenings are excellent investments.
Pay Top Dollar
Top-quality tools cost more but are a far better value in the long run. The same goes for people.
Hiring great people is an excellent business decision, but you don't get the return unless you make the investments. Fix your processes once so that you can leave the weirdoes, druggies and slackers for your competitors.
Cheers!
Jayme
Construction Business Owner, November 2008
