Mike Cote's Business Editor's Notebook: Hire right so you won't have to fire later
While uncertainty continues to worry business owners - from the stalemate over expiring federal tax cuts to the continued unrolling of the Affordable Health Care Act - at some point next year most will face the same decision: whether to hire someone.
Just as you wouldn't rely on your gut instincts to untangle the maze of tax law or health-care legislation, neither should you do so when deciding what person will do the best job for your company. Hire someone and they last only a few months? That's money out the door, says Robert Nadeau, a Plymouth State University professor who teaches business owners and human resource professionals about the hiring process.
"A car is a $20,000 decision. A house is $200,000 decision. Employee turnover costs about three to five times their base salary," Nadeau said. "In the corporate world, it's about a $150,000 mistake."
Nadeau, the director of the Professional Sales Program at Plymouth, will present "The Hiring Process - Hire Right the First Time" from 9 to 11 a.m. Friday at White Mountains Community College in the Littleton Learning Center.
Nadeau shares processes he learned in his 20-year career as a sales manager for Liberty Mutual Insurance. The most important takeaway: The more time you spend assessing candidates, the more likely you'll find the right person, and the more likely they will stay awhile.
"Every hour you spend on the front end doing the right thing in the selection process you save eight hours on the back end," he said.
That means building a process that allows you to make choices efficiently as you sift through resumes to screen for the right skill set and spending 12 to 15 minutes to interview your candidates by phone before you invite finalists to visit for a face-to-face encounter.
"The first two or three steps in the process are designed to knock people out," Nadeau said.
He tells owners and hiring managers to take careful note of every aspect of a candidate's behavior. How does their voice mail sound? Is there music in the background? How do they present themselves?
"I try to help them be more objective in a very subjective process," he said. "People use their gut too much. That cannot be discounted, but in the hiring process for your business, you need to pull yourself away."
To get that detached perspective, Nadeau suggests using an assessment test that can gauge a potential employee's competence for the job.
"It should not be more than a third of the process," he said. "If it was right all the time, you'd just have the test. But a well-validated test is more accurate than a interview."
If the candidate makes the grade on the assessment, then it's time for a behaviorial interview, a 60- to 90-minute session that allows employers to see how potential employees might behave in stressful situations. The questions should be prepared ahead of time and be the same for every candidate.
"If you're the owner, have someone else do it, such as your HR person or someone on the staff. At this point, you already like the person. Get someone who is more neutral. You've already put a halo on them."
The questions might deal with how the candidate handled an unhappy customer: What actions did you take and what was the result? Such questions can sometimes lead to awkward silences, Nadeau said.
"What I train people to do in the seminar is to come up with a well-described situation. Situation, action and result."
And most importantly, let the candidate do most of the talking.
"Business owners who are proud of their business like to talk," he said. "They almost sell the job. A candidate should talk four times to your one."
For for information on "The Hiring Process - Hire Right the First Time" and to register, call the Littleton Learning Center at 535-3222 or firstname.lastname@example.org. The seminar is $25.
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Mike Cote is business editor at the Union Leader. Contact him at 668-4321, ext. 324 or email@example.com.