Archives For Step 6- Make an Offer

After you find the perfect candidate, it’s time to close the deal! Make them an offer of employment. Some candidates may negotiate, so be prepared!

The Hot Standby

Chuck Smith —  April 29, 2013 — 3 Comments

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Have you ever been caught in a situation where events out of your control left you with few options? An important supplier fails to deliver on time. A business partner’s promise is broken and you’re left picking up the pieces. A key employee suddenly quits. At one time or another, it has happened to us all.

That’s why a piece of advice I heard recently from Jim Dolan, CEO of The Dolan Company, struck such a nerve. He said, “Do the extra work to have a Hot Standby.” Dolan’s example was about an investor who made promises to him and then at the last minute changed the terms of the deal. Since Jim’s investment banker insisted on “hot standbys,” they were able to close the deal with a back-up investor on the same day.

At NewHire, the examples we see of this overlooked necessity fall into two broad categories:

  1. Business owners who run into trouble when a key employee leaves with no one trained and ready to take that person’s place, and;
  2. Hiring managers who slow down or stop the recruiting process because a single well-matched candidate is identified.

In today’s business world few small and mid-sized companies (SMBs) have the resources to maintain a team of reserves. The GE model of management (where backups are constantly groomed for each position) is nice to talk about but not a realistic option for most SMBs.

Here are some suggestions more suited to most mid-sized businesses:

  • Cross train wherever possible. Make sure that your employees are able to do more than one job, paying special attention to the most critical job functions.
  • Maintain a pipeline of candidates, even when you are not hiring. You may not have the resources or the need to hire anyone today, but keep your eye out as if you do. Always be on the look-out for talent and create a method for keeping track of who you might like to have on your team in the future.
  • When you ARE actively hiring, schedule a second set of first interviews, even when you have identified a well-matched candidate in the first round. This second round of first interviews is an important way to have a hot standby for both short and longer term hiring needs.

When you are in the midst of recruiting for a job, don’t stop the process until your new person is on board. Too often we see employers say things like, “I like Terry, let’s see how the interview process goes before we meet anyone else.”

If we apply the concept of the Hot Standby, Terry is still the number one candidate. We just keep talking to candidates two, three, and four, until we know Terry is on board. What if Terry gets a better offer or a counter offer, or has a terrible 2nd interview or a no-go reference? If the recruiting process is put on hold waiting on Terry, it can add weeks, even months, to reach your desired outcome.

Jim Dolan’s Hot Standby concept is so powerful in recruiting and hiring. Our best-practice recommendation: keep the top candidates engaged all along the way and continue to develop and screen the candidate pool for other top talent. Having options takes additional work, but it’s often worth the effort!

Dolan was part of a nine-member panel put together by Bob Jordan to celebrate entrepreneurial success in the Midwest and the publication of his book: How They Did It.

business competition on trackWould you buy a car without thinking about what you needed it to do? Of course not! Otherwise, you could spend your nights trying to figure out how you’re going to fit your entire family into that sweet 2-seater sitting in the driveway. The same logic applies to bringing on a new employee. You need to do some research beforehand to figure out who you want to bring on, what you want them to do, and how you want them to operate. The difference between knowing and not knowing these things is the difference between hiring an employee who can hit the ground running and one that has to spend more time adjusting to how you do things.

1. Know the job

Before you post the first ad informing the world that you’re hiring, you need to understand the job your new employee will be doing. If you’re having a hard time coming up with a short description of the position, it’s most likely because you don’t know or understand the responsibilities of the position. You have a general idea of what the employee should accomplish instead of a defined list of what they will be doing. By knowing the details of the job, you’ll be better able to craft a job posting that brings in qualified candidates. If you can’t come up with these details on your own, assessments like job benchmarking tools can fill the knowledge gap. By taking input from people directly involved with that position, you can get an in-depth understanding of what the responsibilities are. From there you can craft a position profile that accurately reflects the duties of that position.

2. Know your ideal candidate

There are as many different personalities and work-styles as there are ice-cream flavors, and to wit, not everyone loves chocolate.  An employee’s personality can either complement or hinder productivity, so it’s imperative to know what personalities work best within your company. For example, do you want someone who’s competitive or collaborative? Bringing aboard a great employee is as much about finding the right talent as it is about understanding your company culture. If you know what kind of attitude would fit in with your company culture, then it makes sense to invest in personality assessments like DISC & PIAV tests. The combined report offers invaluable insight into the work attitudes and motivations of candidates. With that information in hand, you’ll be in a better position to make an informed decision about who would be the best fit for your company.

3. Know the boss

You should know the managerial style of whoever will be supervising that position, regardless if it’s you or someone else. Their management style can either be the oil in a finely tuned machine or the sticky residue that gums up the works. High tension environments that result from personality conflicts are as unhealthy to morale as they are a hindrance to productivity. It’s important to create a team that responds well to their supervisor’s managerial style so that you can avoid those pitfalls. Is the manager someone that needs to approve everything and get regular updates, or would they rather assign tasks and expect their team to manage the minutiae of getting it done? If you want more insight into the managerial style of your supervisors, try the DISC & PIAV tests for management; they can give valuable information on how your managers operate. Use the results from those tests to screen for candidates that you feel would blossom under your manager’s style and avoid the candidates that would whither.

The purpose of doing all this due diligence is to save you from the headache of a bad hire. On paper, everything can look great, but reality can be a different story if that new employee doesn’t fit in with your company culture. That’s not to say that person couldn’t be a good employee or get the job done, but the time spent finding a middle ground between your attitudes and work styles could be better used on moving your business forward. Like the old saying goes, “time is money,” and it’s never a sound business practice to waste money.

What do you do to prepare for hiring a new employee?

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Companies often ask us if it’s true that the best hires come from hiring personal referrals. The answer is — sometimes! According to a New York Times article by Nelson D. Schwartz, employers are increasingly relying on referrals to fill open positions.

In the article, John Sullivan, a human resources consultant states, “Among corporate recruiters random applicants from Internet job sites are sometimes referred to as “Homers,” after the lackadaisical, doughnut-eating Homer Simpson. The most desirable candidates, nicknamed “purple squirrels” because they are so elusive, usually come recommended.”

This is not true! Just because recruiters don’t have a good method for assessing the talent of people who apply online doesn’t make online applicants poor candidates. It just reveals that the hiring company has poor recruiters.

There is no doubt that referred candidates are an extremely important part of the candidate pool. However, substituting a referral for a recruiting process that casts a wide net for all available candidates, screens effectively and identifies the “best available talent” regardless of the source is a mistake.

Relying solely on referrals is both lazy and dangerous. It is lazy because it makes life simpler for recruiters and hiring managers who don’t have a good way to sift through tens or hundreds of possibly more qualified candidates. It is dangerous because people tend to only refer people like themselves. The consequence is that your organization becomes increasing homogenous and less diverse… and this is not only about race or ethnicity. Relying too heavily on a sourcing from referrals is likely to reduce differences in class, education, gender, communication style, behaviors and attitudes that can improve your company.

So, go ahead, reach out for referrals and include them in your recruiting. Just make sure that you don’t short circuit your recruiting process by hiring the wrong person for the job only because they were “referred.” Never hire from a candidate pool of ONE.

What do you think?

Pay

There are a lot of factors when deciding whether to pay your employees on a salary scale versus a commission scale. Many of these factors depend highly on the company in question.

Here are two questions you need to ask yourself first:

1. What type of salesperson are you looking for?

In many cases, commission-based sales draw a certain type of salesperson. The stereotypical “hunter” mentality comes with commission sales; someone who is there to sweet-talk, make a sale, and move on. These people are good at what they do, but they are difficult to hold on to and are often less apt to buy into a team/corporate mentality. Moreover, there is very high turnover in this type of role because not everyone who thinks they’re going to succeed will actually do so.

2. Can you comfortably make the distinction on how much you’re willing to give as a commission?

There is a balance to strike within rate-of-commission: Some jobs are 100% commission (real estate, insurance) while others are base-plus-commission (most product-based sales). Each has its advantages and disadvantages and those should be addressed before hiring anyone. Commission-only will increase the chance of a revolving-door of employees while base-plus-commission will provide a little more job security for a new employee.

There is a fear of salespeople taking their clientele and leaving when they’re on commission, because once they have those clients, they’re “safe.”  This model breeds an attitude of looking out for oneself which can create a sort of divide within the company. If salespeople aren’t treated like other employees, there can be a rift in cohesion of a staff. Norm Brodsky believes that this problem is real and affected his company regularly. Thus he started offering base + commission for the first two years, then, upon offering full-time/long-term employment, eradicating the commission altogether and offering a higher, safer salary.

With a set salary in place – particularly one that is near what a salesman would have been getting on commission in a comparable role – you’ve essentially offered that employee peace of mind. Commission breeds an air of “if I don’t sell, I don’t get paid” and that creates a more stressful work environment.

If you’re looking for a set-up that encourages sales and may have slightly less focus on account maintenance and service, then commission is probably the way to go. Commission-based pay puts all the emphasis on the successful completion of a sale; whether or not it is best for a long-term outlook for the company depends on the company. If you’re making more money due to high-sales, you have more money to reward the people who are bringing in these high-volume sales.

Whichever pay structure you choose, the most important aspect is to make sure it has been clearly communicated to the employees.

Hire better salespeople NewHireLooking to hire your own sales superstar? Check out our Roadmap on How to Hire Better Salespeople. You’ll learn the 3 job boards you have to be on to engage with sales talent, the assessment strategy you’ll never hire another sales rep without, and the best interview tips for hiring sales reps. Get it here…

ClockWe get anxious when hiring a new employee – we want our candidate to start right away so we can move on to the next thing on our to-do list. But first we need the candidate to accept our offer of employment. So how long should we wait to get an answer back?

Well… it depends.

While a standard turn-around time to respond to a job offer is 3-5 days, the answer depends on a couple key questions we need to ask ourselves before we make an offer of employment:

1. How urgent is this hire? If the company needs to make an urgent hire, it’s acceptable to give the candidate a near term deadline for responding. For example, make the offer on a Monday or a Tuesday, and ask for a response by the end of the week. Alternatively, make the offer on Thursday or Friday, and give the candidate the weekend to think it over. Either way, set a firm appointment time for a follow up conversation.

2. Is the candidate considering other offers? The job market IS heating up in some fields, and top candidates are getting multiple job offers! If we suspect that the top pick is handling multiple offers, it’s important to act fast. Give the candidate a specific date to respond. If they are considering other offers, they’ll most likely ask for longer to consider the offer. If the candidate is worth the risk of waiting, respect their wishes for additional time.

3. Do you have a “hot standby”? If you have a strong viable number two candidate, you can put a bit more pressure on your top choice. In the meantime, keep a conversation going with the hot standby. If you don’t have a reasonable second option, continue your recruiting process and develop your pipeline. (Read more about “hot standbys” here.) 

Asking for a response within 48 hours is not considered best practice. The candidate needs time to make arrangements and think the offer through. If the candidate makes a quick decision they come to regret, it might also hurt the employer and the business. Studies show that employees who are unhappy are not as productive at work, take more sick leave and happy employees tend to stay in their job twice as long.[1]

Every situation is different – but it’s important to think all of these factors through before making an offer of employment.

There’s a feeling afoot that the economy is improving. We’re certainly seeing evidence in the hiring activity of our clients. No one will be sorry to put the events of 2009 and 2010 in the rear-view mirror. New statistics on what cost-of-living by state.

But, as we start to hire again it’s important for us to make sure that all of our jobs provide a living wage. It’s not just a moral imperative; it’s good business. Here’s a link to an interesting new study that gives details on just what constitutes a living wage today. I’d love to hear your feedback.

When we create jobs that a real person can do in a reasonable workday for a decent amount of money, we create stability within our companies. When our companies retain stable employees our clients are happy. This causes clients to do more business with us and refer us to their friends and colleagues.

Way back when in the history of our temp agency we had a contract with a large Chicago bank which had a contract with the IRS. The bank provided tax form processing to the IRS for 941 quarterly taxes. To fulfill the contract the bank hired temps who would work 60 hour weeks for 3 weeks around the quarterly tax deadlines. The IRS, and therefore, the bank were insistent that the same temps work once a quarter for 3 weeks making about $8 to $10 per hour.

We didn’t last long providing temps to this project because we always hated the fact the client wasn’t providing a means for the employees to earn a living wage. In fact the IRS expected that these temps would use government resources like Unemployment, Food Stamps, TANF and Welfare to make up for the periods when they weren’t needed to process taxes.

So, where possible, it’s incumbent on us to do our best as employers to create jobs that provide a living wage. Your thoughts?

I’ve been reading a lot lately about the importance of Checklists. I was asked recently if I had a Checklist for Hiring. I do and here it is:

10 critical things to know before you make an offer.

Ask yourself, Is the person…

1. The “Best Available Talent
2. Legally eligible (has to provide proof!)
3. Reference and background checked
4. Able to work in the place(s) and for the time required
5. Pleased to accept the compensation offered
6. Able to do the work…
a demonstrated capacity (not experience) to do the job
7. Able to learn and adapt
8. Time Horizon minimally acceptable (likely to do the job for x years)
9. Going to get along with others in your environment
(NOT a recommendation for a homogenous environment)
10. Someone you are looking forward to seeing everyday

Love to hear what you think. Did I miss any? Do you disagree with any?

Check out yesterday’s NY Times article on hospitals refusing to hire smokers.

Do you think that companies should be allowed to not hire smokers? Answer this one-question survey: Click here to take survey

I’ll publish the result next week.

Thanks to Karla Dobbeck of HR of Human Resource Techniques, Inc.
www.hrtechniques.biz for allowing us to reprint this content from her monthly newsletter. It’s great stuff that many employers don’t know:

Your newly hired employees deserve the best chance for success at your company. You can help each become a valued member of your team by planning a well thought out New Employee Orientation.

The EEOC and OSHA require that employees receive specific training before entering the workplace and if you are ISO, QS or TS certified, additional competency work is also required.

Start your employees out right by ensuring they have the tools they need to be successful. Before sending unsuspecting new hires into your facility, make certain they understand:

– Their job – provide a copy of the job description. Unless your employees know what is expected of them, they will have a hard time meeting expectations.

– Administrative Procedures for calling in, payroll, timekeeping and requesting time off, etc. Your employees will feel at home when they know how things are done at your company.

– Benefits, eligibility requirements and how to access, etc. Now might be a good time to get enrollment forms into their hands as well.
Safety. Include emergency measures, where to find MSDS and how to read them, what PPEs are required and their responsibilities under Lockout Tagout

– Important company policies – those hot button issues for you. Attendance, work rules, cell phone use to name a few. Don’t forget Harassment & Discrimination reporting and your commitment for zero tolerance.

– How to get additional information and who to see with questions, concerns or issues. Who should the employee contact for an equipment failure, bad parts, missing tools, etc.

– Company information – your history, industries you serve, mission statement and quality statement.

Take some pro-active steps to get employees started on the right foot. Remember, this is your best chance to make sure the information a new employee receives is consistent and sends the message you want to send. When employees feel welcomed and part of the family, their decision to join your company is validated.