Tuesday, September 29th, 2020

One of the sad outcomes of my consulting work is that I’ve seen, again and again, how companies make the same mistakes in selecting employees. There are a few common errors made by a majority of companies. Here are the top six selection errors that you need to avoid…

Selection errors cost four to five times annual salary. Hire the wrong person for a $30,000-a-year job and it eventually will cost you about $150,000. The tangible costs alone of a poor hire are often quoted as a minimum of 25-35% of a year’s base salary. The costs go beyond direct salary and benefits. The costs can include materials, recruiting expenses (fees, travel expenses, management time, and advertising), training time and training materials. Other less obvious costs could be losses such as spoilage of materials, products or other resources, lawsuits and even the loss of a customer. All of these costs are quantifiable, and you probably can think of more. And not the least of costs is the time and effort to repeat your recruiting and selection process and training.

Intangible costs of a poor hire are five times the tangible costs

Intangible costs are not as easy to quantify. Here are a few that other company owners have shared with me: …..

Here are a few rules to consider when selecting someone to lead a team. You may view some of them as common sense, but don’t let that fool you. My 30 years of experience with both great and poorly performing companies has convinced me these rules are not commonly practiced, yet they are extremely important for building great teams.

Do you know your organization’s most vulnerable link?

At what job level is your practice or company most vulnerable? Different experts will give different answers to this question. I believe the lowest level of your management or leadership team is your most vulnerable link. This group, line managers— works closest to the client or end product. This is the point where the owner’s vision, mission and values are passed on to the employees closest to your client or product. The ability of the line manager to recruit, select, develop, maximize and retain talent is paramount to building a great organization.

Other ways to evaluate the strength of your organization…..

The logical place to begin our journey is to examine how privately owned businesses and professional practices grow. There is a natural and predictable set of stages into all companies fall… Here we will cover the four major stages of business growth: Entrepreneurial, Personal, Organizational and Beyond.

The personal goals of the owners drive business decisions and ultimately form the basis of the growth stage where the business will reside. You do not need to attain a certain growth stage nor must you go through all these stages. You may start and indefinitely remain in the entrepreneurial stage. That is your choice and I place no value judgment on your conscious decision. That said, progressing through these stages is the surest and clearest path to greatness.

This article foreshadows what to expect as you expand your organization and build toward greatness. If you are frustrated or stuck in your growth cycle, this article may help explain why that is and what you can do to move forward to more fun and profits…

My margins have changed, I have more customers than before, but I am working harder and my accountant tells me my profit margins are down. What shall I do, even my staff is beginning to view each new customer as a problem rather than an opportunity? I sense that we are serving our clients well at great expense to our employees’ job satisfaction- this cannot continue without something cracking. Maybe I should add people- but how can I do this when my profits are eroding?

There are many businesses that have gone through a review process and ended up with less clients and made more money. Much has been written about the value of keeping your clients and that the best source of new business is from your existing clients. Also, as business owners we know that to meet our growth goals we need to develop new business also. How do we maintain the balance of servicing our existing clients and grow our business in a cost effective manner?

It is time to review your customers and determine which ones are better and why.

Recently, a group of advisors offering diverse services to owners of privately owned businesses were discussing the state of affairs. We all know that the economic environment is difficult and challenging. The capital structure has vanished. Banks are not lending and when they do lend it will be with many stipulations. Interest rates are down – but still money is not flowing. Private equity firms are forced to use capital to keep their current investments alive. Only a few businesses are capitalized well enough to make strategic acquisitions and if they do, they are at bargain prices. Owners are forced to sell well below their expectations. It is not pretty, but all owners need to mitigate their risk of transition. They will not be getting a lot of cash in any near term transaction and they may be forced to finance any transition.

You have heard a lot about assessments from assessment company articles, email, Internet etc- I am confused with the information… As a small to medium sized company owner, how do I select the right assessment for me to use?

As a company owner, I used assessments to help me make decisions on who to hire and who to promote and found them helpful. As a consultant to small business owners, I looked carefully before I selected an assessment company. I set up criteria that were helpful from my past experience as a company CEO.

Selection Criteria:
• Does the company have ……….

As president of your company you often see talented people that “your gut tells you” they would be great in my business and….. Some of them are friends, others are casual acquaintances and some believe it or not are related by marriage. I wish I had a low risk way or just a way I could approach people. I don’t want to hire a friend or relative and not have it work and I don’t want to not approach them.

First of all, you are to be congratulated on wanting to bring in talented people to your organization that will be successful in your environment. I do not know of a successful company owner who was not a good recruiter for their business. At the same time, I also know of relatives and friends who appeared to be a good fit, but sadly were not.

In this article, I will take you through an approach that will allow you to recruit talent you have identified and why it is essential that you have your management team adopt this …….

I seem to be getting great people to interviews and they seem to be very qualified and impressive and I like them right away…..but when they join the company they are not the same….I must have missed something. One of my lessons when managing my sales force hit home many times, when I only hired experience or on superficial impressions- I learned that two other key items came with the new hire; chemistry and behavior!