A company’s most valuable asset is usually its people. Nonetheless, while businesses put a lot of resources into research for product development, they frequently leave the selection and training of human “assets” to untrained professionals, to guesswork, or to the belief that you can teach anyone to do something just because you like them. These assumptions are just as costly for a company as going to market with a product that won’t sell.
There is so much information available about hiring that it can be a daunting task to sort through it all and decide what will work best for your company and your values. The method I see most often at entrepreneurial companies is improvisational: “Let’s give it a try and see if it works.” Unfortunately, in most cases, hiring this way does not. And when your hiring process doesn’t work, it’s a costly failure. Finding and interviewing candidates for a position should be a slow process, like dating before you get married. You want to date for as long as it takes before you commit because, as anyone who’s been through one knows, divorce is usually messy, emotional, time consuming, and expensive. Firing someone often is too. So, let’s walk through how to develop an intentional process for hiring and retaining the best candidates for your company.
Job Description and Salary Range
To continue with the dating analogy, think of this step as a profile on a dating site. Without a clear job description, how will you know when you find the right candidate? You have to be clear about the desired profile or anyone you interview can seem like the right fit. As I mentioned in Chapter Three, I’m a big believer in a simple job description that includes:
- Job duties and responsibilities
- Required skills and characteristics
- Desired skills and characteristics
If you have a one- or two-page description incorporating these three items, you have a great start to your intentional hiring process. Your job description will allow you to identify the behaviors that will form the basis of your behavior-based interview questions, and that will reveal whether or not a candidate will be able to perform the job to your specifications. More detailed job descriptions are fine, just be sure to identify the key characteristics and skills required for a successful hire. Most importantly, don’t forget to declare your mission and values. If you hire for a values match, the rest gets a lot easier.
I recommend creating a salary range for every position in your company. By doing this before hiring, you set salary expectations early and you avoid the problem of employees expecting a raise every year just for sticking around. Another reason to set salary ranges in advance is that it helps establish a culture that pays for performance not longevity. Furthermore, when you have established a salary range based on research of comparable positions, it becomes much easier to say “no” when an employee at the top of the pay range asks for a raise because you’ve already established the fair ceiling for the position. Ambitious employees who want to earn a salary beyond the range for that position can request more training, take on added responsibility, or go to school on their own. Or, if one of your organizational values is learning, perhaps you can establish a program that reinforces additional training or education to help those talented or high-potential employees stay engaged or advance into new positions.
In setting salary ranges, it’s important to conduct some outside research on pay ranges for your industry and for each job. You want to be fair and aware of what market conditions are in your region and industry so you can attract and retain top talent. Getting a “bargain” on an employee is likely to backfire on you in the future when that person finds out what their marketable skills are worth to the industry. They will want more money, or they will leave, and neither of these is a conversation you want to have frequently. Fortunately, there are multiple resources for salary surveys. One of the most popular of these is www.salary.com, but you can also easily do research with geographic or industry-based parameters.
Your employees have probably already done their own research and found out what salary ranges are for their positions. If anything, they will put themselves in a higher classification than you would. Remember the “bookkeeper” I talked about in Chapter Three? The company hired young, unskilled help for accounting clerical positions and paid them twelve to fourteen dollars an hour. When they renamed that position “bookkeeper,” the employee did her research on what a bookkeeper typically makes and came back, survey in hand, demanding twenty dollars per hour, although her skills and experience hadn’t changed. Had the company had an accurate job description, title, and salary range set in advance, this awkward situation could have been avoided altogether.
Excerpted from my book, “Putting Together the Entrepreneurial Puzzle: The Ten Pieces Every Business Needs to Succeed.” Available here on Amazon.