Nearly every business is guilty of making a less-than-stellar hiring decision at one point or another. A whopping 95 percent of companies surveyed by Brandon Hall Group for its Talent Acquisition study have admitted to this mistake.
While a bad hire can potentially slow down growth at any company, it can actually have a fatal effect on a startup. According to a report by CB Insights, the third leading cause of failure by startups studied was that they hadn’t built the right team from the beginning.
Creating a strong team means that each new hire (or promotion) must be made strategically and with great care, as the margin for error can oftentimes be quite small. Here are three tips to help you build a pool of talent that brings your start-up to the next level.
Define your company culture first
Startups, by definition, are small operations. They may even comprise just one person, so there might not be much of a company “culture” in place just yet. But when your culture does form, it will be a combination of your organisation’s values, beliefs and behaviours that have developed over time. The process of figuring out what this means for your new company makes that first hire that much more important.
Before you start looking for a new addition to your company, then, take the time to define your business’s values first. What mindsets and characteristics are needed to fuel your mission?
Peter Holten Muhlmann, CEO of Trustpilot, one of the world’s largest online review platforms, explained to me via email how his company does this:
“All your hires need to imbibe the company culture, the value of your brand and ultimately transfer it to your product,” Muhlmann wrote, “so that it is obvious to your customers what you stand for. A strong, value-based work culture built on integrity will raise the bar for your hires down the line for years to come.”
This CEO should know. Trustpilot employs more than 600 employees of 40 different nationalities across its seven global offices. If there is one thing he has ingrained in the workplace culture, he said, it’s that the success of his company – and the online review space in general – is completely dependent upon transparency and authenticity.
This is part of the reason why the Trustpilot platform remains “open,” meaning that its reviews aren’t moderated and brands can’t suppress negative reviews. It’s also why the task of maintaining Trustpilot’s core values and honest consumer feedback belongs not just to the company’s “compliance department,” but to every employee.
For your start-up, you should set objectives for short-term and long-term strategies to build the culture you want. This is why you should define values from the beginning, then use that knowledge to guide your hiring decision. The alignment of values must take place before new employees are brought on board.
Outline job roles and personality preferences
By the time start-up owners realise they need to hire someone, they’ll often be experiencing an overwhelming workload. With such a full plate, you may find it tough to know exactly which roles and responsibilities need to be filled. Since most new launches have not had the time or pressing need to clearly define job roles or organisational structure, it is important that entrepreneurs do so before bringing on a new hire.
Checking off technical skills needed is easy enough, but finding someone with the necessary soft skills to excel in the position is what really matters. Some 93 percent of employers surveyed by Wonderlic for its Hard Facts About Soft Skills report emphasised that they considered interpersonal skills and critical thinking vital to look for in a new hire. However, finding that perfect cocktail of hard and soft skills can be a challenge.
Big data technology has a solution, of course. AI-powered recruitment solutions like Harver can do wonders to eliminate the guesswork when it comes to making that initial hire. The system measures both aptitude and attitude by using big data to scour through candidates’ profiles and match their skill level to job descriptions. From there, it uses machine learning to evaluate the person’s soft skills, problem-solving abilities and alignment with the company’s values.
This leads to more informed hiring decisions and a vastly improved likelihood of finding the right matches. As Harver’s CEO Barend Raaff explained to me via email,
“The costs involved with replacing employees can be huge,” he wrote. “We believe that a new hire should fit two categories: skill match and personality match. Aligning both these elements is the key to making informed hiring decisions and reducing turnover.”
Take a step back and critically examine why you need to bring on a new hire. What responsibilities will he or she have? Why those responsibilities? And what skills will be necessary to fulfill this role? Failing to define these criteria will make it more difficult to find the perfect fit. So establish the personality and skillset you need, right from the beginning.
Understand How to Develop Talent, Not Just Find It
Unless you have a huge budget to hire someone with years of experience, one of your greatest challenges in hiring, as a start-up, is being able to spot potential. Furthermore, start-up leaders must understand how to properly develop the people they actually bring on board.
When you bring on younger talent with less experience, make it a point to check in and monitor that person’s development. A performance-management system like 15five can make it easier to accurately assess employee engagement across the board. The tool uses quick surveys to acquire feedback and keep up on issues like morale and performance.
Along the way to reaching your milestones, you can set goals and priorities, along with recognition systems. 15five opens up channels for employees to share their thoughts and suggestions with upper level management.
Overall, job stagnation is one of the top reasons why employees leave a position, according to Glassdoor.
Entrepreneurs thrive on growth and improvement. If you can commit to promoting these goals for your start-up, its outlook will only grow brighter as time goes on.
So, don’t fall victim to making a hasty hiring decision you’ll later regret. Setting a clear vision and defining important requirements is the way to identifying the perfect candidate; enacting a system that continues talent development is the way to keep that talent long-term.
This article was originally posted here on Entrepreneur.com.
The Pros And Cons Of Hiring Recent Graduates For Your Start-up
Here are the pros and cons of hiring graduates for your start-up.
As a business owner, chances are you receive lots of applications from recent graduates, but you might be hesitant employing them due to a number of reasons: from lack of experience to their perceived unreliability and not having enough resources to train.
Start-ups need talented, enthusiastic individuals to help drive the business to the forefront of their market. Often passion projects and personal labours of love, start-ups most of all need someone who can buy into the vision.
As much as this could be a seasoned professional with dreams of shaking up the industry, this could also be a fresh face looking for a challenge.
Here are the pros and cons of hiring graduates for your start-up.
One of the key considerations for start-ups is keeping costs sleek and streamlined. So, from a pragmatic perspective, it’s much cheaper to hire fresh graduates than experienced staff with high expectations. So, if you need people with specific skill sets who can learn on the job, graduates are a great option..
…But, they expect more than you think.
Maybe not from salary alone, but graduates on the cusp of Gen Z have clear expectations of their workplace. This includes training, opportunities for growth, flexible working etc. All of these things come at a cost.
To graduates looking for work, a lack of workplace perks and opportunities can tip the scales against you. A recent study from the Bright Network revealed that a company’s people and culture was the most important factor when choosing a graduate role.
Cultivating a workplace that is attractive to graduates may end up costing you more than what you save in reduced salaries.
Related: When To Hire A Consultant
Graduates are free from the mental baggage of corporate life, working in silos and having to navigate office politics. As such, they are feel much more comfortable with voicing ideas, opinions and points of view.
This makes graduates potentially key resources of ideas that your company can tap into. Sure, not every idea is going to be solid gold, but you can certainty get some unique perspectives from the graduate point of view.
…However, with fresh faces comes a lack of experience.
Most fresh graduates typically don’t have experience in the working world. As such, it takes time to train them. Beyond the usual training of getting them used to the company culture and protocol, you need to teach them about working life and work habits generally. You’d be amazed at how many things you take for granted about work that some people just don’t know.
That having been said, not all graduates are so green. Some will have experience having worked summer jobs and internships, while others will be mature graduates will a career of work experience behind them.
If your start-up is a graduate’s first job, they are going to want to make a splash! Unlike people further in their careers that just want to come to work and do the job, graduates are energetic, with the drive and capacity to do more. Free from the family commitments of dependents, they’ll be more committed to work instead. This is particularly important for many start-ups where the driving attitude is to work to the job and not the clock.
…You need to keep them keen though, because that drive will push them to job-hop.
More fresh graduates are choosing freelance or part-time work instead of working full-time and keeping their options open. In fact, one in four graduates leave their job within the first 12 months. So, if you can’t maintain the momentum, you can expect to find an empty desk where a graduate once was.
The idea of a job for life has fallen out of favour. Rather than a ten year career, the average career is considered to be 6 years, and sometimes less. So when you hire a fresh graduate, it’s safe to assume that they might be using your company as a stepping stone.
But, if you can cultivate an attractive environment for graduates and help them achieve their personal career goals, while getting them to buy into your start-up vision, they could easily make your company their company.
Ultimately, it all boils down to the individual. Not all fresh graduates change their jobs in a matter of months, and not all experienced hires are uncreative, jaded people. The important thing to do is to ask the right questions during the interview and make sure that you hire the right people for your business.
4 Lessons We Can Learn From The High-Profile Firings At Disney
Knowing how to handle a toxic personality is important, but it’s even better to avoid hiring the wrong person in the first place.
These days, The Walt Disney Co. has a relatively stellar reputation. Its movies are ridiculously popular, and its image has become increasingly squeaky-clean over the years. In many ways, Disney has come the closest of almost any company you could name to accomplishing the impossible: pleasing all of the people all of the time.
Over the past year, however, the House of Mouse’s pristine image has absorbed a few dings and dents. Most recently, the company dealt with roaring controversies surrounding two personalities: Comedian Roseanne Barr and director James Gunn.
Both situations involved offensive tweets, though the context and content of those tweets were vastly different. While Barr landed in hot water for sending out racist and outlandish tweets, Gunn made headlines after some rather questionable tweets – including jokes about pedophilia and rape – that surfaced from about a decade ago.
Regardless of the circumstances, both celebrities met a swift response from Disney: Immediate termination of their contracts with the company. In this way, Disney sent a clear and consistent message to its employees: that any negative attention from potential customers would result in the loss of a job.
Interestingly, the company didn’t base its firing decisions on any skittishness about money – the ratings for Roseanne probably still would have been fine, and Guardians of the Galaxy Vol. 3 undoubtedly would have still made oodles of money at the box office. Instead, the firings were fueled by risk management, with the company attempting to shift the focus off online outrage so it could proceed with business as usual.
As a public company with a family friendly reputation it holds near and dear, Disney finds itself in an incredibly difficult position when it comes to hiring. In addition to worrying about whether someone can do the job he or she has been hired to do, the company must also consider whether that person has the potential to upset the public with past or present behaviour.
In the age of social media, a vocal minority is enough to create a major headache for any company.
One wrong personality can result in big risk
No employer hires someone’s complete personality. The company hires someone who has the skills for the job in question. Barr was hired for the role she plays on television rather than for her political opinions or the content she posts on Twitter. Our personal and professional lives aren’t mutually exclusive, but sometimes the two simply don’t get along.
While most companies hopefully won’t have to handle armies of strangers dredging up old tweets, they will eventually have to contend with toxic personalities in the workplace. One bad hire can become a drain on the entire team’s energy, negatively affecting the performance of the organisation.
While knowing how to handle a toxic personality is an important part of risk management, it’s even better to avoid hiring the wrong person in the first place. This might sound easier said than done, but there are several ways organisations can navigate the hiring process without falling victim to the same pitfalls Disney did.
1. Codify and share the organisation’s goals
This should go without saying, but many companies seem to struggle when it comes to voicing clear rules for conduct and organisational goals. If there is no agreement or strong management, there is no way to solve disagreements or differing interpretations. Then, when a toxic personality comes into the mix, it can create a disastrous state of affairs.
CBS recently learned this lesson the hard way, succumbing to infighting and legal battles between corporate leaders and Shari Redstone, its controlling shareholder, over the direction of the company. Because there was no contingency plan or clear set of goals to guide the company, the next move for CBS is completely up in the air.
2. Formalise a chain of command
At the very least, an organisation should establish clear boundaries of responsibility. If there are no formal goals for each role, it’s impossible to evaluate the performance of any team member. That, in itself, is enough to cause conflict.
This type of delineation in a company can be difficult in the start-up world, where most people wear a variety of hats. Even if it isn’t possible to clearly state who is responsible for each task, it’s still possible – and necessary – to appoint an arbiter who can make decisions that end conflicts. According to the Bureau of Labor Statistics, this is a common solution for a variety of companies – there are an estimated 7,800 arbitrators or mediators in the United States performing these tasks.
3. Hire for attitude; train for skill
For new start-ups, sometimes one rotten apple truly can spoil the whole bunch. Because there are usually only a handful of employees in a variety of roles, a toxic individual has the opportunity to gum up the works of an otherwise functional team.
When hiring someone for a startup role, the hiring executive must take great care to ensure that each personality meshes well with other team members’. Skills can be taught, but mutual respect needs to be there from the start. This goes beyond start-ups, though. Daniel Schwartz, the CEO of Restaurant Brands International (which owns Burger King and Tim Horton’s), considers attitude when it comes to hiring, according to the New York Times. Bring in people who are willing to work hard and to leave their egos at the door.
4. Outsource tasks calling for specific expertise
Despite such precautions, hiring is a huge risk for any startup because personality fit is not always apparent at the outset. Labor contracts are often difficult or costly to set up – and just as difficult to cancel. As a result, a toxic personality becomes an anchor that is difficult to cut loose.
A contract with an external supplier, however, can be renegotiated, canceled and even revoked – at a much lower cost. This makes a start-up more flexible and helps it avoid the risk of toxicity. Entrepreneurs overestimate the benefits of in-house employees, not noticing that they’re better off delaying hiring full-time employees for as long as possible.
Related: “I Wish I’d Fired More People”
Deloitte’s Global Outsourcing Survey tells the same story: 78 Percent of respondents said they were happy with their decisions to outsource tasks. The top reasons for outsourcing in the first place? Cutting costs, solving capacity issues and staying focused on the core business. Outsourcing allows a start-up to stay nimble, and it eliminates the potential for a newcomer to ruin your organisational morale.
In many ways, hiring has become a minefield: It’s impossible for companies to anticipate every single personality clash or PR nightmare. But by using these techniques – and hiring only when it’s absolutely necessary – your company can avoid major internal dramas akin to the public firestorms Disney has weathered.
This article was originally posted here on Entrepreneur.com.
Benefits Of Outsourcing For A Multinational Company
If you are still on the fence about outsourcing, read on below for more information on how it can benefit your multinational company.
If you are running a multinational company, you are likely in a highly stressful position. This means that you do not have time in your day to focus on the minutiae of administrative tasks, scheduling appointments or even spending too much time on dealing with customer service. An effective way to remedy this issue is to look into outsourcing.
One of the many benefits of outsourcing is that it is highly cost-effective, allowing you to save money while still delivering the same level of service to your clients and customers. If you are still on the fence about outsourcing, read on below for more information on how it can benefit your multinational company.
Expertise and efficiency
The companies that you outsource tasks to are experts in their fields. They are trained in their fields and know exactly how to tackle the tasks head on without having any issues.
The benefits of outsourcing include the fact that many of these outsourcing companies will have their own specialised equipment which means that they will be able to complete tasks in a quicker time period than your own staff could. You will not be compromising on quality and you will be lightening the load on your own teams so that they can focus on more important tasks and issues.
It is remote…which saves money
As a multinational company, you are already familiar with remote work. Some of your offices might work remotely, which can be highly cost-effective. Another benefit of outsourcing is that many of the companies are remote, meaning that you will not have to spend money on setting up a desk or office for them to work in.
Remote outsourcing means that the outsourcing company can contact you via email and messaging services, which saves you from having to spend money on phone calls and petrol for in-person meetings. Of course, you will have to be able to reach the outsourcing company easily so you will need to ensure their communication methods are stable and will not falter during times of emergency.
You are not in charge of the outsourced staff
One of the benefits of outsourcing is that you, as a manager, do not have to contend with managing the outsourced staff. For example, if one of the outsourcing company’s customer service agents needs to go on maternity leave, it is not up to you to find a replacement worker.
Running a multinational company is stressful in itself, and having to replace staff who you are not in charge of will only add to this stress. Business process outsourcing companies save you from having to deal with added pressure by replacing their staff themselves. While this might mean that operations are down for a day or two, it will save you both time and money in the long run.
You will gain access to global knowledge
Being a multinational company means that you have offices in more than one country on more than one continent. This means that you will need global knowledge in order to make your company a success, which just one of the benefits of outsourcing.
Business process outsourcing companies can help you to gather data on the consumers in the different countries your businesses are based in, allowing you to make informed decisions on marketing strategies and where to focus your efforts. You will need to ensure that the outsourcing company adheres to all rules and regulations concerning data privacy, as both you and them could face significant fines and legal consequences.
You can focus on what is important
With outsourcing, you can turn your attention to what is more important. For example, you might outsource your business administrative tasks in order to focus on improving your marketing and branding strategies in the different countries which your company is based.
You might need to capture data in order to make decisions, which can be a highly time-consuming task. If your outsource data capturing, you can focus on developing your customer service model and improve your profit. Being able to focus on what is important will allow you to build your multinational from strength to strength rather than having to divide your attention between important tasks and day-to-day concerns.
Make your multinational a success
Managing a multinational business is a major achievement, which brings with it a large amount of stress. You can combat this stress, however, by investing in outsourcing. An outsourcing company only hires experts, which means that you will not be compromising on quality and will be receiving excellent service.
It is remote and cost-effective, allowing you to use finances for more important concerns and you will also gain global knowledge which will help you to make smarter business decisions. Focus on what is important and you will soon find your company growing by leaps and bounds.
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