When I started my first business almost ten years ago, my definition of success was how big my company could be in terms of staff. The more people I employed, the more successful I felt I would be.
Many businesses and many failures later I now understand that success has many definitions, but the least effective is how many people you employ. One of the most effective is profit. Profit and cash flow should dominate any small business’s definition of success.
In my experience, the more staff I hired, the more complicated my business became and the more difficult it became to be profitable.
Of course this isn’t a one-size fits all rule. Often an increase in staff can alleviate pressure, increase sales and make your organisation feel more whole. Context always needs to be applied, so lets apply some context.
Push To Breaking Point
In one of my businesses, I recall hiring a staff member five months after launching. We’d just signed a huge client, were set to travel abroad for a month and needed someone to hold the fort while we were away. This was a mistake.
Five months into any business you barely know what your name is, let alone how sustainable your growth is, where your major revenue streams are, or how you work with your co-founder. In hindsight, this first hire put unnecessary stress on our business too early.
What we should have done was work harder. When you think you can’t work any more, work harder. If we’d worked to breaking point and then considered hiring, we would’ve had a better understanding of our business, clients, product and each other.
Advice from the trenches: If you’re just starting out, give a lot of thought to your first hire. Who’s it going to be? What skills should they have? What type of person are they, and what will they become in your organisation? Are you hiring the best possible individual?
Hire the Right People
People often say that you should trust your gut with hiring – fantastic advice but not always easy to stick to. If you’re looking to hire quickly, then it’s going to be hard to only hire people that your gut says you should.
Advice from the trenches: When hiring, I like to ask very specific questions that tell me if they’re my kind of person and if they’re going to gel with the company ethos.
Ensuring your team works well together, fits together and understands one another is imperative to the survival of your business. Always hire the right fit, do not compromise.
Hire Slowly, Fire Quickly
Making sure you’re hiring the right people is even more crucial in South Africa where labour laws are not in favour of the employer. It’s extremely difficult to fire people. There are hoops to jump through, checks and balances and then there is the CCMA to contend with if you make any mistakes.
Advice from the trenches: This is why it is very important to not rush the recruitment and hiring processes. Hire slowly, take care, be thorough and don’t rush the ‘getting to know you’ phase of the process. It can take months of maneuvering to remove a bad egg from the team in the correct and bureaucratic way.
Ask The Right Questions
We’ve heard about Google, Microsoft and other cutting edge firms asking ludicrous interview questions to ‘understand the thinking process of the candidate’.
Personally I think this methodology doesn’t really apply to small businesses. You need to understand every person coming into your organisation and if you’re asking vague and arbitrary questions that you don’t really understand, then how do you know where they fit in?
I like to ask the following standard questions:
- What was your favourite thing about your last job? This gives insight into what the person likes to do, what types of activities they enjoy and if they’ll fit the company needs.
- Who was your least favourite person at your last job? This allows me to see where they fit into a hierarchy. Was their favourite person their boss, their co-workers, the lunch lady?
- 3. Do you have any side projects? I love to understand what my team does in their spare time and want them to engage in things other than their job. This often helps me understand if they’re self-starters and can maintain a side project or if they do the bare minimum to keep themselves engaged in their work.
It’s important to remember that people lead to processes. When there are just two of you, you might not have to worry about leave, work hours, breaks, holidays and the rest of the complications.
When you’ve got a team the complication and responsibility is exponential – once you’ve got people on your books you become responsible for their livelihoods.
Youth Employment An Opportunity
South Africa has a high youth unemployment rate – it is vital for business to consider alternatives for youth employment.
A young female graduate with hands-on experience in setting up and running community projects, had resourcefully turned a hobby into an income-generating small business to support herself, while seeking employment… a skilled person, wouldn’t you say? It took her five long months to find employment – and in that time she received 50 rejections – 50 rejections with no useful feedback as to why she was being turned down. We employed her – and within the first few days she’d surpassed our expectations, had added ‘value’, so much so, that two weeks later we assigned her to a project.
It’s this kind of potential that company recruitment approaches seem to overlook!
There are 6-million unemployed young people in South Africa – and the social and economic transformation economy that is crucial for the country, is an economy that has been growing at less than the minimum 5-6 percent required to shrink unemployment, largely due to the under-performance of main institutions.
Business accustomed to turning problems into opportunities of value-creation regards the South African Education and Training system as one that does not deliver in equipping young people with the requisite work and readiness skills. There are government tax breaks and grants which provide opportunities for short term employment, but unfortunately these do not create value, nor are they sustainable as they are not used strategically.
Last year I had the good fortune to attend the Youth Employment Enterprise Skills Solutions (YEESS) summit in Nelson Mandela Metro – engaging with the young attendees I found that they were determined to change the view held by business that they are considered a risk, to one which recognises that they can, and do, add value and assist in realising opportunities, particularly because of their age -related attributes that give them the edge.
- are a cost advantage – they cost less (South African staff is paid on the basis of the years of work rather than the value)
- have a higher level of energy – they work faster and for longer hours
- have flexibility – they learn new tasks /systems quickly, and are often more innovative
- can increase revenue – they enjoy engaging with customers, and being ‘entrepreneurial’ (eager to promote products and services in the market)
Business should consider these opportunities – the model that many businesses currently use pays young people a stipend which usually just covers their living costs and employs them for a short period; and then the norm is to “find” something for them to do to keep them busy… a soul-destroying experience that in no way creates value and is certainly not one on which to build a career.
Alternatives to the existing model are to:
- clearly pinpoint the opportunities and define the value (that the potential employee is required to add)
- provide training – measuring potential is a challenge – a short training programme for job-seekers can clearly identify the ones who benefit most, and are thus likely to be the most valuable – and there is the plus of 4 BBBEE Skills development points for the training of unemployed people
- provide a ‘proving’ period (3 to 12 months) where goals, expectations and support are clearly laid out -this provides an important business foundation experience in a productive environment considerably improving the chances of the young person’s absorption into the business culture.
By changing the way one views youth unemployment – to see youth employment rather as an chance to reduce costs, increase revenue and contribute to the building of skills and training future entrepreneurs – presents the perfect opportunity for business to contribute to the country’s future stability and gain economic returns.
Temporary Employment Providers — Friend or Foe?
Contrary to the fact that legislation states that temporary employees work under a dual relationship between a TES provider and their client, the relationship has been questioned, confusing the situation and muddying the waters.
Currently, under a dual employment relationship, employees are given the protection of employment benefits under the TES provider and, after a three-month employment period, attain extra protection by being considered under the employment of both the TES provider and their client.
Yet various unions have pushed back against TES providers, citing that ‘labour brokers’ don’t have the best interests of the workers at heart. So, are TES providers truly the enemy — or could they be the solution?
What is a TES provider?
The term ‘labour broker’ is being bandied about with startling regularity. Surprising, because ‘labour brokering’ is actually a concept that no longer exists in legal terms, according to Joanette Nagel, Labour Specialist at Hunts Attorneys.
“It’s a term associated with ‘bakkie brigades’, those once comfortable picking up ‘piece workers’ and exploiting them with little to no consideration for labour laws,” Joanette explains. “Today’s TES providers are reputable organisations that, with the backing of the law and strict policies, provide a valuable service while ensuring that the rights and wages of temporary employees are in line with permanently employed staff.”
Sean Momberg, MD at Workforce Staffing Solutions, agrees: “A dual relationship where the employee is employed by both the TES and the client after three months means that the employee is actually afforded more protection. If, for example, the client falls into circumstances in which they can no longer honour the contract, such as if they go insolvent or a project is cancelled, the TES provider is still bound by contract to the employee and their rights to compensation, among others, are protected.”
The role of a TES in business
According to the Global Employment Trends for Youth 2017 study, conducted by the International Labour Organisation, the rapidly changing labour landscape has made the expectation of traditional or permanent employment less realistic than ever before.
“There is a global trend towards temporary employment that is supported by a new trend of flexibility in career choices as well as employment environments. The demand for TES providers to play a more active role in the labour market is higher than we have ever known,” affirms Sean.
Organisations will also benefit from this trend, especially as businesses can outsource all non-core related labour requirements, allowing them to focus on their core purpose and not concern themselves with the labour function, or the overheads associated with human resources. “A TES takes on the responsibility of employment, remuneration, legal disputes, strike mitigation, employee wellness, interactions with unions, and many other HR concerns that are extremely resource intensive,” says Sean.
A TES ensures economic continuation
“President Cyril Ramaphosa said in his recent YES initiative launch, that even those with further education often struggle to bridge the gap between learning and earning. TES providers help with bridging this gap, offering skills development that guarantees jobs,” notes Sean.
“TES providers are here to stay and offer the best of both worlds to organisations and employment seekers alike. Dual relationships continue to protect workers, underpinning and promoting their rights, while helping businesses to cover any skills and employment gaps within their organisations without having to invest in huge HR departments and legal representation to do so.”
Spotting a reputable TES provider
- Registered and compliant with the Labour Relations Act (LRA)
- Likewise with the Unemployment Insurance Fund (UIF) and relevant bargaining councils
- Has the necessary insurance and off-balance sheet financial protection in place
- Able to provide proof of regular auditing
- Able to show full legal compliance and holds a letter of good standing.
Million Rand Questions Answered By Founders Of Multi-Million Rand Businesses
Don’t waste your time asking job candidates to name their greatest weaknesses (yes, everyone will say they’re a perfectionist). Instead, try these four tips from seven entrepreneurs who offer up their best strategies.
1. Interview for growth
Building and maintaining a sustainable business is having the right infrastructure to do so, and that takes people — great people. The problem is that while you’re on your growth path, you can’t necessarily afford the best and most experienced in the market, so the trick becomes hiring people who you can see will grow with the position — you’re not hiring for now, you’re hiring for where you want to be. When we interview, we look for hungry people.
We want to know where they see themselves five years from now. — Steven Kark, Paycorp
2. Look for accountability
One of our favourite interview questions is ‘Tell me about when you missed a deadline.’ It’s an immediate red flag if they say they never have; either they’re lying or they’re not accountable. We’re looking for an answer that says they had an issue, what that issue was, that they recognised it, and how they found a solution — solution and accountability are key. We also believe technology makes the whole process easier, particularly if you are stretched for time. Spend time designing questions and then get someone else to ask them. Video each interview, watch the interviews in your own time, and then select the top candidates for face-to-face interviews. — Elvira Riccardi and Donna Silver, Afrizan
3. Dig into their current environment
We can’t compete with corporates on benefits, so we offer something even more valuable: Time and flexibility. There is a caveat though: Don’t employ someone whose benefits were better than you can offer. We interviewed someone who was a perfect candidate, except she was coming from a large corporate that offered an on-site masseuse for free, amongst other things. As much as we loved her, we knew we wouldn’t hold on to her. She was used to an office environment that we could never offer.
You need to be hiring people who are stepping up; not the other way around. We always dig into what their current office environment is like. — Renay and Russell Tandy, Ngage
4. Make them sweat
For years we had issues around high staff turnover. We realised that the problem started in the interview process. We were hiring the wrong people who didn’t suit our culture, and they would quickly burn out, or challenge our expectations. We realised that 80% of the success of a hire is culture. Natie Kirsh used to recommend going for a drive. He said that if you sit in the passenger seat and just chat, asking any questions that come to mind, the candidate will soon reveal themselves in the simplest ways. You’ll see the person, and you can make a judgement call on whether they suit the requirements of the position and the company.
We also love the questioning method of four-year olds. Whatever the answer to a specific question is, follow it with a ‘why’.
At the beginning it’s not even about the answer. Candidates will always arrive at an interview with certain rehearsed answers. If you keep asking why, eventually they have to start giving you completely unrehearsed, unplanned answers, and that’s when you’ll get a real sense of who they are. — Ran Neu-Ner and Gil Oved, The Creative Counsel
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