Employee Hiring (Encyclopedia of Small Business)
Hiring employees is a process crucial to the success of a business, and as most successful small business owners know, the hiring process does not begin with the interview and end with the job offer. Rather, it involves planning and considering the job prior to an interview, recruiting and interviewing wisely to bring in the right person, and providing new workers with an orientation that enables them to get off to a strong start with the company.
WHEN AND WHO TO HIRE
Prior to advertising a position, interviewing, or making a selection, the manager must consider several key aspects of the open position and the person they will seek to fill that staff opening.
CONSIDER THE JOB Any employee selection process must take place within the context of the larger business enterprise. An open position is an invitation to make positive changes in workforce structure. Does the job need to be created or filled? Does it need to be reorganized? These are questions that should be considered before beginning the hiring process.
First, consider the position itself. Prior to the employee hiring process, business owners should determine what tasks need to be addressed by the work force, and gauge how many people will be needed to accomplish that task. Consider the ideal functions and responsibilities of the job itself, not the person or persons who last held the position. At this point, it is beneficial to compose a job description and a job specification. The job description lists the duties and responsibilities of the job, and can include a ranking of the importance of each of these tasks. A job specification includes a listing of critical skillshose skills that are necessary for an individual to perform the job effectively. The job description and specification are tools which can not only aid the employer in finding the appropriate person to fill a job opening, but can also help guide the employee during his or her time with the business.
If the job exists and has been adequately defined, there is still opportunity to make changes to the position. Consider whether the position needs to be restructured. Are you asking that the job encompass too much responsibility? Are you asking too little? Small business owners might also want to consider whether the tasks associated with a position can be incorporated into one or more already existing positions. Often, it is not necessary to hire another employee, but only to re-evaluate present positions and re-design the work flow.
CONSIDER THE CANDIDATE After making sure that the position is thoroughly defined, consider the person that you want to fill the position. What skills, knowledge base, and personal traits will allow someone to successfully perform these tasks? Should the candidate have an advanced degree? What kind of personality would compliment the team? By consulting the critical skills in the job description, the manager will be able to get a solid idea of the type of candidate who will be most likely to successfully meet the challenges of the position.
A hiring manager should be careful, however, that they not become unduly idealistic in determining employment criteria. Few small businesses have the luxury of biding their time until the perfect prospective employee comes along. A would-be employee may not embody every single desirable trait on a business owner's wish list, yet still provide a fundamentally sound performance. Ultimately, each business owner needs to determine for him or herself whether a prospect's positives are sufficient to outweigh any negatives (in lack of experience, personality, or training) that they may carry with them.
When creating a bank of candidates for the position, small business owners and entrepreneurs can look either within or without the company. There are advantages and disadvantages to both methods.
HIRING FROM WITHIN The advantages to hiring employees from within the company are a greater company knowledge base, continuity, and improved morale. An employee already in a business is likely to know more about the company's needs and will be able to approach a new position with the added perspective of his or her previous position. Hiring from within also brings continuity to a companyhe talent of the individuals remains within the company, and therefore is "re-invested." Finally, employees generally feel good about a company which promotes from within. It signals a company's belief in their people and in the quality of work that they do, and provides them with tangible evidence that their own efforts can bring about career advancement.
The disadvantage of hiring from the existing employee base is that it means a limited pool of qualified candidates. Within the current employee bank, especially if that bank is relatively small, there may not be a person qualified to fill the position, or there may not be a person who wants to fill the position.
HIRING FROM OUTSIDE Ultimately, every employee comes from outside the company at some time. Sometimes, bringing someone in from outside of the company is difficult because of the high learning curve. Often, though, external sources are necessary and desirable. People within the organization may not have a specialized skill or a specific level of education or experience necessary for a position's demands. Moreover, when hiring from within is practiced to exclusion, any company runs the risk of growing stagnant in its ideas and methods. Though they might be challenged by a new position, people from inside a company approach things in a way that has always worked for them. Sometimes, a fresh outlook can bring new vitality to an enterprise.
METHODS OF RECRUITING A small business can turn to several different methods of recruiting to secure external applicants. Newspaper advertising is by far the most popular and well-known of these methods. A well-written advertisement can bring in many candidates. Generally, the more specific the advertisement about the job and qualifications sought, the better qualified the applicants will be. But as Peggy Isaacson, a Florida-based human resources consultant told Lynn, "[Small business employers] can't just place a help-wanted ad in the newspaper and expect to be flooded with top-notch candidates. While advertising has its place in the hiring process, it's not enough. In this market, good people won't just come to you; you have to aggressively look for them."
In recognition of this reality, Isaacson recommended to Lynn that companies consider the following methods of recruitment:
- Utilize personal and professional networkshis encompasses everything from neighbors to fellow community/business association members.
- Establish an employee referral programompanies that offer cash bonuses for referrals that result in hirings sometimes enjoy success with these programs.
- Utilize school placement offices
- Establish a presence at job fairs.
- Post notices at senior citizen centers.
- Contact area employment agencies.
- Post job openings with job banksany professional associations maintain job banks for their members.
- Offer competitive compensation packages.
- Instill a positive, attractive work environment.
Any or all of these methods may be used simultaneously to draw the best selection of applicants.
Once a bank of potential candidates is established, the manager must select candidates and begin the interview process.
CHECKING REFERENCES Checking references, though time consuming, is an important step in the hiring process. Prospective employees will often provide professional references, if not on the resume itself, then at least on request. A manager may choose to check references before the interview with a candidate if they are provided, or may opt to check references between a first and second interview. In any event, a manager should always request references and make the calls.
Chances are good that a previous employer will not provide more information about the employee than their name, the dates of employment and the positions the person held. This is because a company, or any person within a company, which provides false information can be held legally liable for that misinformation. This potential liability does not, however, prevent a hiring manager from asking about the employee's work habits, performance or attitude. It is possible that someone may comment further on the employee, especially if the person is not a member of the Human Resources Department, but is a former manager. If this kind of additional information about the employee is made available, never discuss it with the employee directly. Rather, use it as a guide for probing questions about the person's previous work experience with that company.
EMPLOYMENT TESTING Thousands of companies use employment testing of some kind to evaluate candidates prior to employment. Employment testing is an area fraught with legal pitfalls, however, so it is best to seek the advice of a professional employment testing service or an attorney experienced in labor law before implementing such requirements.
MAKING A DECISION AND AN OFFER
After the interviewing process has taken place, it is not always easy to come to a final hiring decision. Sometimes a business may be forced to choose among a number of highly qualified, attractive applicants. This is obviously a nice problem to have. Conversely, on other occasions a business may undertake a time-consuming search, only to find themselves with candidates who are notably flawed in one respect or another. In such instances, the company leadership needs to determine whether the business can afford to extend the search, or whether business realities require that they fill the position with the best of the candidates before them.
THE OFFER The hiring manager should personally extend an offer of employment to the selected candidate as soon as possible after the interview. This begins the employee/manager relationship. Define the amount of time the candidate has to consider the offer few days to one week is usually enough. The offer can be extended in person or over the phone. It is important to note that an offer, even verbal, may be construed as a contract between the employee and the company. Therefore, construct the offer carefully.
An offer should include the following:
- Confirmation that you are speaking with the right person.
- Offer of the position, including title and reporting relationship.
- Starting salary for the position.
- A suggested date for the candidate's response
- Proposed starting date for the position.
- Indicate necessary follow through by you and/or the candidate
A manager should note that the position itself may dictate how to offer the starting salary. If the person is being offered an exempt (salaried) position, consider offering the salary in terms of bi-weekly earnings, or the smallest possible increment in which they are paid. If you are offering a person a non-exempt (hourly) position, you might offer the salary as an hourly wage. This could be important because the offer may be construed as a contractual agreement. If a yearly salary is offered, this may imply employment for one year. If the person is employed for a shorter period of time they could conceivably sue for the full, offered salary. By offering the salary in smaller increments, you avoid the possibility of any misunderstanding.
NEGOTIATING TERMS Every candidate offered a position has the option to either accept or reject the job offer and may want to negotiate terms, usually salary or benefits. Though the company may not be able to consider alternate terms of employment, it is often wise to hear a candidate's proposal. If the candidate is truly the best qualified person for the job, there may be some room for compromise on both the part of the candidate and on the part of the company. Listening to a proposal also establishes the manager's willingness to hear out other suggestions, a practice which is well received by any employee.
LAWS IMPACTING THE HIRING PROCESS
The hiring process is subject to legal guidelines set out by both federal and state government defining the boundaries for discriminatory hiring practices. Companies may not discriminate in hiring on the basis of sex, age, race, national origin, religion, physical disability, or veteran status. These are called protected classes. A hiring manager may not screen out any applicant because of membership in a protected class, nor may any interview questions address topics pertaining to the protected class. The main acts and laws which define these classes and the hiring practices based on them are:
- I. The Civil Rights Act of 1964 (Title VII)
- II. Age Discrimination in Employment Act of 1967 (ADEA)
- III. Americans With Disabilities Act of 1990 (ADA)
- IV. The Uniformed Services Employment Reemployment Rights Act of 1994 (USERRA)
- V. Immigration Reform and Control Act
Anti-discrimination laws do not require any company to hire an applicant because of membership in a protected class. A manager is not required to hire applicants from any protected class in proportion to their numbers in the community. A manager is required to select the best qualified applicant for the position, based on the critical skills of the job, and is required to make that selection irrespective of whether or not that applicant belongs to a protected class. To be sure that hiring practices do not violate any of these laws, focus on the candidate's capabilities based on the critical skills of the job. Any questions about the legal aspects of hiring should be directed to a capable employment lawyer.
NEW EMPLOYEE ORIENTATION
Once the hiring decision is made and the offer is accepted, a manager needs to prepare to welcome a new employee. An employee orientation program should produce good will and provide education about the company; a poorly planned program can increase confusion and even hasten turnover. Employee orientation is more than a paperwork sessiont is the new employee's first impression of the company.
One of the first things the manager should review is the job description, along with the specifics of the position, its goals, and the critical skills. After this has been accomplished, the new employee can be introduced to the company at large.
REQUIRED FORMS All new employees are required to fill out specific forms on the first day of employment. These include federal and state forms such as:
- VI. Federal Tax Withholding Form (W-4)
- VII. State and/or Local Tax Withholding Forms
- VIII. Employment Eligibility Verification Form (I-9)
The company may also have specific forms for emergency notification and other critical information. Be sure each form and its purpose is explained to the employee and that the employee is given sufficient time to complete them.
COMPANY SPECIFICS New employees need to know more than where their desk is. They need to know the way to operate on a daily basis within the company. An orientation session should address any of the following topics pertinent to the workplace:
- IX. Areas for public information (bulletin boards, etc.) and private information (mailboxes, etc.)
- X. Entrance and exit for the building
- XI. Introduction to managers and co-workers
- XII. Location of departments
- XIII. Location of restrooms and breakroom
- XIV. Location of secured area for personal belongings
- XV. Operation of the phone system
- XVI. Parking
- XVII. Training schedule
COMPANY POLICIES Specific company policies should be thoroughly reviewed with every new employee, so that all employees understand the guidelines under which they work. Though these might be discussed during the interview, they should be reiterated in an employee's orientation. Policies to review can include the following:
- XVIII. Company Mission Statement, history and future
- XIX. Company benefits and payroll policies
- XX. Company dress code, office hours
- XXI. Company communications and open door policies
- XXII. Company policies against harassment and discrimination
Employee manuals containing this information are typically distributed during the orientation process. Employers should make sure that they receive written documentation from the new employee when they receive their manual, for this paperwork conveys significant legal protections in the event of future employer-employee difficulties.
Cadwell, Charles M. New Employee Orientation: A Practical Guide for Supervisors.
Dauten, Dale A. The Gifted Boss: How to Find, Create and Keep Great Employees. Morrow, 1999.
Half, Robert. Finding, Hiring and Keeping the Best Employees.
Harris, Jim, and Joan Brannick. Finding and Keeping Great Employees. AMACOM, 1999.
Lynn, Lacquelyn. "Hire Power: How to Find the Best Employees in Today's Dwindling Market." Entrepreneur. September 1997.
Morgan, Ronald B., and Jack E. Smith. Staffing the New Workplace: Selecting and Promoting for Quality Improvement.
Weiss, Donald. Fair, Square and Legal: Safe Hiring, Managing & Firing Practices. AMACOM, 1993.
SEE ALSO: Employee References; Employee Reinstatement; Employment Applications; Employment Interviews; Resumes