There are many mistakes small businesses make when it comes to hiring for the first time. Mistakes through infancy stage can be lethal and costly to your business. It is too bad that promising business ideas die too soon not because of lack of market demand but due to lack of proper HR management. Sometimes, small business owners overlook the importance of having the right members simply because they have a product or a service in high demand.
Below is a List of Mistakes Small Businesses Make when Hiring
1.Hiring from Outside the Region
At Ibex Consulting, we, most of the time, look for candidates from the region. Therefore, the majority of our 250,000+ resume database is of candidates who have Gulf experience. Candidates who are already in the Gulf already have the right experience. They would not only do their job right, but they could provide valuable advice on how to do things in other departments. They are available for interviews and can join immediately. Most importantly, they already know the prevailing salary range and would not shock you with their high expectations.
Do not worry about not finding the right candidate in the market. Our experience indicates that there are enough candidates for every caliber in the market around you. Nevertheless, if you looked everywhere and could not find what you are looking for start searching overseas. Even then, look for those who worked in your region previously and are willing to come back.
2.Doing the Hiring Yourself
For certain calibers, hiring might be easy and straightforward. However, it is recommended to rely on professionals for key positions. You might be an excellent entrepreneur but hiring the right people is a different game. If you decide not to hire a headhunter, you can still seek hiring advice from friends with experience. The best people who can provide hiring tips are those who work in HR.
If you decide to hire a recruitment agency, make sure that you clearly convey your requirements. Be specific on what you are looking for. Nevertheless, if you are not sure of what kind of staff you want to hire state that to your recruitment agency. Given their vast experience, they can surely understand your requirements and guide you through establishing the right criteria. Remember, recruiters and headhunters know more than just searching for candidates. Thus, they can offer you much more that what you are looking for.
3.Searching for the Perfect Candidate
If you find the right candidate at an early stage, you are lucky. However, avoid wasting time trying to look for the perfect candidate as it does not exist. You might find someone who is a perfect fit for your requirements, but they could be too expensive, too old, too arrogant or just too anything.
Of course, you cannot just settle for just any candidate. Instead, make a checklist of qualities you anticipate in a candidate. This could be part of your overall business manual which should be the constitution of your business. You can have a separate checklist for every position you want to fill. Once you are convinced that a candidate meets most of the qualities in your checklist, make an offer.
If you feel that a candidate lacks certain skills, make an assessment on whether it is possible for them to acquire it. The most important quality you should consider is the candidate’s ability and willingness to learn. Naturally, every candidate would declare that he or she is willing and ready to learn. However, we have all heard this kind of statement. The simplest way to prove this is to look at the candidate’s track record. Has the candidate progressed through his or her career or has the candidate been moving sideways? Another simple trick is to test the candidate using basic and common software and applications.
4.Not Knowing what the Business Requires Exactly
Hiring by itself requires experience. By default, many startups lack hiring experience. They might know exactly the job titles they want to fill, yet, they have no clue about how to identify the right candidates to fill these titles.
Suppose you are starting up a small restaurant, do you know the number of waiters and waitresses you require? Maybe you would not require any as most of the meals are ordered for to go. Do you need an accountant or a good ERP system with someone who can multitask entering transactions in the system?
Similarly, if you are planning to sell building materials decide whether to have an indoor salesperson, someone who spends most of the time making sales calls or both. Selling indoors requires less effort than outdoor and it costs less. Selling outdoors generates higher sales and requires higher investment. Do you need to have a warehouse, or you can operate by just-in-time or order-to-order. Having a warehouse requires additional fixed and variable expenses. However, it results in higher margins as you get discounts buying in bulks and ordering in advance. Order-to-order gives you the advantage of not renting and customizing warehouses, not requiring a storekeeper and not requiring a truck to mobilize goods sold.
To overcome this obstacle, you need to set priorities. These priorities should be in-line with your greater business vision. The best approach at this stage is to start small without compromising on quality and grow gradually. Hire the least number of people possible to make it easier for you to manage your customers as well as your staff.
5.Taking Candidates at Face Value
Generally, candidates would tell you exactly what you want to hear. They highlight their strengths and never mention their weaknesses. How do you think most people would reply if you ask the classical question: what are your weaknesses? Do not we all reply by presenting a strength wrapped in a weakness? Such a reply might be like “my biggest weakness is that I’m too organized or I’m obsessed with perfection”.
Develop the skills of cold reading people. Acquaint yourself with basic human psychology and learn body language and non-verbal communication. This will help you not only in distinguishing suitable candidates, but it will also help you in every facet of life. After all, business is all about understanding people.
Structure your question in a way that you lead the candidate into a funnel. That means, leading the interviewee from a wide general question to narrow specific ones. The questions should be all related and the candidate’s answer to the question should be related to the answer he or she provided in the first question. Moving down the funnel you would know if the answers you are getting are not consistent and, somewhat, conflicting. It could go like:
You: Are you willing to make an effort to develop yourself professionally?
Interviewee: Yes sure. I always seek growth opportunities and focus on learning.
You: What kind of action do you usually take to grow and learn?
Interviewee: I take courses, learn new skills related to my job, attend training programs, etc…
You: You got your degree 7 years ago and in your first job you worked as an assistant accountant. I see that you did not attempt to obtain additional accounting certification and in your second and third job you are still an assistant accountant!
There is nothing unethical about tricking candidates into funnel questions. You are hiring for your own business and should not take the risk of hiring an incompetent candidate. Honest suitable candidates will always tell you the truth.
6.Being Impressed by Candidates’ Personality
The word personality is derived from the Latin word persona, which means mask or character. Literally, we wear masks that conceal our true personality until those masks become our true identity. Naturally, interviewees strive to look their best during interviews. Just read any blog on how to carry yourself during a job interview and follow the steps and, voila, you are a perfect candidate. However, developing cold reading skills should help you infiltrate through the mask the candidate puts on if they are putting on any.
In most parts, there are common interview questions every interviewer asks and every interviewee anticipates. Candidates prepare ready-made ideal answers to these questions. Your challenge is to break from classic questions and come up with your own. This would certainly entice candidates to leave their comfort zone as they have no script to read from. Once the candidate starts improvising you can clearly read through their true personality. They start acting in a natural way that allows you to determine whether they fit your business.
7.Having False Salary Indications
Often, startups, especially those with limited budget avoid paying for a feasibility study and would rather crunch the numbers themselves. That is fine if your business is straightforward. However, you still need to have accurate data on key issues such as staff salary.
Honestly, it is far better to underestimate than to overestimate when it comes to salary. If you have budgeted a lower salary, you would eventually find out while interacting with candidates. The real issue is when you allocate a higher salary than the market average. Candidates tend to ask for more and if you do not know the range you are likely to agree to their demand.
8.Focus on Profit not Loss
When assembling the team that will help you achieve your dream of becoming a successful entrepreneur stop worrying about losing. Instead, focus on winning and making profit. In our interaction with employers on www.jobibex.com we regularly hear them say: we do not want to lose. Unfortunately, their focus is not on what they want to achieve but on what they want to avoid.
While searching for candidates, look for those who focus on winning. Surround yourself with persons with winning mentality. Do not be afraid to pay extra if you identify value in a candidate. Once a candidate is part of your business the wellbeing of your business becomes their own objective as nobody wants to end desperately looking for another job because their company is closing down.
9. Neglecting Reference Check
At the initial search stage, the type of reference check we conduct is basic. We mostly rely on the candidate to provide the required info. Once we receive the employer’s confirmation on the selected candidate, we perform what we refer to as a “deep reference check”. At this stage we take candidates at face value.
A few months ago, one of our clients was at the final stage of salary negotiations with a candidate for a very senior role. The client chose to involve us in the initial search stage and eliminated us during the selection stage. The client just sent as an “fyi” notifying us about their intention to hire the candidate and we asked the client to hold the offer until we check him out. To our surprise, that candidate embezzled around $5 million from his previous employer and there was a case in court. While speaking with a director of the previous employer he made it very clear that this person is not allowed to join any organization until the case is over.
Reference check is vital especially in an open market. Some candidates are sensitive to this phase of employment. People are also reserved when it comes to providing a reference when asked for one. In some parts of the world, people can sue you if you provide a negative reference to them! That is why most of the reference requests are provided verbally as opposed to in writing.
Never rely or bother to use the references candidates include on their resumes. They are worthless and somehow staged and misleading. Create your own reference for every candidate. Start at the top and ask owners, directors and general managers of the companies where the candidate previously worked. They usually provide the most honest and true picture about the candidate you are about to hire. Even if they do not know or remember the candidate, they can also ask their employees who are bound to provide their boss with the right answer. Honestly, after asking those who are on the top about a candidate you would get all the answers and can stop there.
10.Overestimating the Power of Changing Others
If you feel you made a mistake and hired the wrong person show them the door sooner than later. Deciding to live with your hiring mistakes hoping the person will change might be a costly choice. If the recruit is not making enough effort in the initial probational stage, it is a good indication that you should not expect much moving forward. You did your homework and chose who seem to be the best candidate out there. However, if that candidate fails to live up to your expectation you should both move on your separate ways.
Always be fair as to give your employees the chance and the time though. You cannot blame your employees for your lack of communication or organization. So, before pulling the trigger always investigate if there is anything at your end that need to change. It could very much be your fault and it should not reflect on your employees. After all, firing is more difficult than hiring. Besides, the word travels fast and very soon your business will lose attraction as you terminate people irrespective of your justification.