- How to avoid overhiring and under-hiring at your business.
- Why you need to connect all job postings to your company’s core values.
- Where to post job openings.
How to check references.
- Why you should consider an employee referral program.
Finding great talent is one of the greatest challenges any business owner will face. This is especially true for Acquisition Entrepreneurs who have acquired an existing company. These AEs may not be as familiar with the business as the people who have worked there every day for years, so adding to that team can cause extra stress.
At Acquira, we tend to recommend that AEs look at home services businesses for their acquisition targets. But it’s important to note that, in the home services industry, there are about five employees retiring for every individual entering the workforce. So attracting and retaining good people becomes even more critical to ensuring the company succeeds.
In order to attract the best talent, that means you must establish a strong employee value proposition and an attractive compensation and benefits package. This will help you attract and retain top talent, but to ensure you’re hiring the best people, you need to develop a philosophy and framework that you can repeatedly use to execute a job search.
Before you begin looking outside of the organization to fill a role, you should always ask if someone internally would be a good fit. Hiring someone from within the organization helps the company (by saving money and time training and onboarding the individual), the individual (by helping them progress through their career), and the morale of other employees.
Of course, hiring from within will still create another hiring need lower on the organizational chart, but that can be handled by a well-implemented succession plan.
Making Sure You Hire The Right Amount Of People
When an acquisition entrepreneur takes the helm of an existing business, there are a lot of things to do. The frenetic pace of the work often leads you to miss some important details which can lead to processes like a hiring framework being rushed or completely overlooked.
In many instances, this leads new business owners to open up positions without proper consideration of whether the jobs are actually needed. This is known as overhiring.
On the other hand, being overly cautious about who you hire can also harm your team. Under-hiring can create burnout for the existing team members while also producing poor results.
To avoid these problems, there are a few key steps you can take:
- Define what the new hire should achieve in spans of 3, 6, or 12 months. Whatever timeframe best applies to your industry.
- Ask yourself if you have enough to keep them busy. Ask your team for input here. If they feel they are at or above capacity, then it indicates you need to hire someone else. Or if they think that a new, specific skill set would help the company, you may need to look into hiring someone new.
- Check to see whether the work can be divided among the existing staff. If that’s already the case, ask yourself if the work could be handled better if a new, additional person was handling it.
- Create a daily planner for the hypothetical new hire. How will they spend their time? Be as specific as possible. How will they fill 40 hours each week?
- Ask yourself if you should be hiring someone for the leadership team. Depending on what’s needed, it may make more sense to hire an experienced leader who can motivate people and oversee entire processes.
- Finally, ask yourself if adding someone new would slow things down. If the company is small and agile, work often gets done at a faster pace. When you hire someone new, there is a training and onboarding process that needs to happen, not to mention the learning curve of their time on the job.
The Hiring Framework
Now that you’ve confirmed that you do, in fact, need to hire a new employee, here are some things you should consider, as laid out by Chris Winn, CTO of Creative Market:
- Connect all job postings to your company’s core values
By now, you should have laid out your company’s core values. Every candidate that you interview should fit perfectly into those values. Your company’s values should serve as a guiding star to help you think strategically about who you will hire and wade through the information you receive about each candidate.
- Know what you need
Now, it’s time to be a little selfish. At this stage, don’t just think about what the company needs. Since you’ll be managing the employee, think about what you need from a new hire. Should they be collaborative? D you want to create a mentorship culture or a culture that values self-starters? You should aim to hire people that whom you’re excited to work with each day.
- Define the role
Why does this role need to be filled? What are their daily responsibilities? Who will they work with each day? What are their key performance indicators? What will success look like for them?
- Create a skills assessment
Any appraisal of a person’s skills should align with the real-world tasks of the job.
- Know what you’re looking for
Imagine what traits a good hire will have through the lens of your business's core values. Think about the best and worst hires you ever made and what traits those people possessed.
The Nitty Gritty
1. Where to find employees
One of the best ways to find qualified, hard-working people is through employee referrals. Personally referred applicants already have a good idea of what it is like to work with you. You should consider offering a referral bonus to the referring employee if the applicant is successful. One study showed that only 25 percent of workers recruited through job boards stay for more than two years, whereas 45 percent of employees obtained through employee referrals stay for more than four years.
Employees who have been through a formal accreditation or certification process in recent years probably have a number of contacts from those days.
In the world of recruitment agencies, a candidate with the perfect combination of qualifications, experience, and soft skills is known as a “purple squirrel.” Hiring through an employee referral is said by recruitment agencies to increase the chance you’ll find a purple squirrel.
Online portals include sites like indeed.com, monster.com, ziprecruiter.com, linkedin.com, and glassdoor.com. These are probably the most common way to attract new hires. However, if you’re in the home services industry the pages and pages of jobs on offer can be dismaying.
When posting a job via an online portal be sure to describe your employee value proposition: why should they work for you and not a competitor? Use the existing job outline as the basis for describing the job responsibilities: the more they know the better they’ll be able to self-select. Be clear about what skills and qualities are required, and what you are willing to train for.
As we mentioned above, the home services industry has more people exiting the workforce than entering it. This problem is compounded by the fact that the services industry as a whole is highly fragmented and has relatively low entry barriers. This leads to many people offering their services as independent contractors. Part of your employee value proposition should make it clear that working for a good company is better than working for yourself.
Also, remember to use LinkedIn’s search engine capabilities. Type in certain keywords related to your job and see if possible candidates appear, especially within your geographic area.
It’s best to use a variety of methods for job posting, including the old-fashioned ones. If you live in a community with fewer than 50,000 people, an ad in the classified section of the local newspaper might still be successful and information about it may be passed on by word of mouth. After all, people’s aunts and acquaintances don’t read online job portals for jobs in your area, but they may read the local newspaper. Also, a newspaper ad may reach older candidates in the community who are not at ease with online forums. Even a “now hiring” notice on the business’s window (with job title) may spread the word, and convey that the company has plenty of work. When advertising the old-fashioned way, it’s best to email the job outline to prospective applicants.
Your city or county may also have a brick-and-mortar center for job postings. You can also look at local colleges that run accreditation programs in your industry.
We do not suggest using a professional headhunter because the cost can be in the tens of thousands, and their network in the trades industries is not likely to be extensive.
2. The Interview Process
When it comes to home services businesses, remember that most, but not all, states require some form of accreditation or licensing. (In a few cases, it is the city that requires it.) So when you interview it’s imperative to see proof of current accreditation.
Applicants should fill out an application form immediately prior to the interview. Resumes can be written or edited by someone other than the candidate, and so can applications if they’re filled out in advance and emailed to you. An application completed in person serves as a test for the accuracy of spelling and grammar, as well as attention to detail.
We suggest conducting just one interview, which can be expanded to two if you need to decide between more than one short-listed applicant. Interviewing should be performed by the owner and the position’s direct supervisor. Remember, you’re looking for the optimal candidate in the available pool, not the perfect candidate with nothing but strengths. Soft skills, especially the ability to get on with others, are just as important as hard qualifications. So is the perceived fit with company values. It is a truism that while hard skills can be taught, attitude cannot, and employees are usually fired for attitude rather than lack of skills.
When you interview you are determining three key things: skills; personality; and culture fit.
When you interview you are determining three key things: skills; personality; and culture fit. These traits are integral to an organization whether the position you're hiring for is customer-facing or in the back office. You want to ensure, to the best of your ability, that everyone you hire fits in with the existing culture and work ethic of the company. During the interview, look at body language for giveaways about temperament. Does the applicant make eye contact? Do they give their full attention to you? Are they rude or polite? Patient or impatient? Are they courteous to everyone in the office? Did they arrive for the interview on time?
Besides the standard questions on training, work experience, achievements, strengths and weaknesses, ask questions to tease out behaviors, attitudes, and perspectives. According to gusto.com’s blog, the best interview questions to ask at a small company are:
- “Tell me about a time you did a lot, with very little.” This focuses on resourcefulness.
- “Tell me what you do that makes the biggest impact on the organization in your current job.” This focuses on key motivators.
- “Tell me about a time you feel a boss treated you unfairly.” This focuses on accountability and honesty. Unless their work experience is very skimpy, they will have been subject to an unfair boss and should be frank and confident enough to talk about it.
- “Tell me about a time you went the extra mile for a customer.” This is a measure of customer focus.
One well-known personality test that we like at Acquira is known as The Big Five, or OCEAN. It measures scores on five traits: Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism. At Acquira we are looking for high applicant scores on Openness and Conscientiousness. Your needs may well be different, but if you are in the home services industry it is likely that you will value a high score for conscientiousness, and for agreeableness in customer-facing employees. The test can be found online.
3. Checking References
It’s important not to skil this step. A proper reference check can ensure that you don’t end up hiring someone who doesn’t like to work and, conversely, you aren’t dealing with employees who want to run the show. Although this may sound jaded, remember that people will often list references that include their mother under her maiden name or close friends. Make sure you pay special attention to phoning the references given for previous employers.
If the employer reference simply confirms position title and length of service, that shouldn’t necessarily discourage you. Larger employers often have a policy of not describing the employee’s performance, good or bad. If you’re lucky you will get someone who is frank anyway.
4. The Offer Letter
An offer should be made by telephone and followed up immediately by a formal email and paper offer.
This offer should clearly state the position title, compensation, the name and position reported to, and all details of benefits. The paper copy should include a space for the employee to sign and date their agreement. Employment can be made ‘at will’, which means you can terminate the employment without cause, as long as you are not doing so for discriminatory, retaliatory or malicious reasons. This clause also allows the employee to terminate their employment at any time.
You should consult a lawyer before you hire your first employee to ascertain whether your state allows ‘at will’ offers and whether there are any constraints on them. We discuss this more in our article, “How To Let Go of Employees Who Don’t Improve.”
Hiring and training employees are expensive. So is living with a vacant position, which can compromise work quality and restrict company growth.
At all times, you should aim to retain good employees while motivating them to do their best. The onboarding process, compensation and benefits package, and emphasis on a unique and pervasive company culture are all intended to increase employees’ satisfaction in their jobs.
A word of caution: don’t go overboard trying to make work fun. There is often an institutional employee cynicism towards the employer, who holds the formal power to withhold and punish. In addition, employees can smell insincerity a mile off. Simply making a point to show that you care goes a long way, especially through positive feedback and one-on-one chats with employees when you both have time.
If you’ve determined there is not a cultural fit between the employee and the company and you’ve tried without success to change the situation, don’t try to paper over the cracks. Hopefully, the dissonance between the strong company culture you’ve created and the employee’s attitude will create discomfort for them and they will look for another job. Firing is never pleasant and can stress everyone in a small company.
How To Hire Employees For Small Business: The Conclusion
Hiring great employees is not an easy task. Not only do you need to sift through piles of applications, check endless references, and conduct many interviews, you also need to ensure that the person you hire is a good fit culturally.
But a careful and deliberate hiring framework can ensure that the candidate you eventually hire is the perfect fit for your organization and team. It will also increase the chances that they will stay with the company for years to come.
Have you had any particularly bad hiring experiences? We’d love to hear about them in the comments below.
Much of the above article was inspired by the training offered in our ACE Framework, our change management system designed to spur post-acquisition growth. The Framework is only available to individuals who close a business through our Accelerator Program. To learn more about the Program and how Acquira can help you on your personal acquisition journey, schedule a call with us today.
- Be sure to avoid both overhiring and under-hiring.
- You should consider offering a referral bonus to the referring employee if the applicant is successful.
- Soft skills are just as important as hard qualifications.
- To increase employee satisfaction, pay attention to your compensation and benefits package, and place an emphasis on creating a unique and pervasive company culture.
Acquira is a business acquisition in a box service. We help entrepreneurs buy businesses and we invest in them and their chosen businesses. We are here to help ensure that each business we work with is posed to make the biggest positive impact possible for its owners, employees, and community.
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