A well-selected workforce is key to growing your business. You can improve your business by sharpening your recruiting and hiring techniques where and how to look for qualified people, how to interview and screen candidates, and how to make a job offer.
Plan First, Hire Later
- Publicize Your Opening
- Identify Your Need
- Spread the Word
- Write a Catchy Ad
- Evaluate Resumes
- Interview Candidates
- Check References
Choose Your Winners
- Administer Personality Tests
- Take Your Pick
- Make a Job Offer
“When I hire people, I mostly listen to my gut.
Sometimes it’s a leap of faith.
You’ve got to take a lot of flyers.”
Gary Hirshberg, founder and CEO, Stonyfield Farms Inc.
When an entrepreneur who runs a yogurt company with 150 employees and $50 million in annual sales admits that hiring is largely guesswork, you can conclude one of two things:
- That’s a relief; or
- That’s terrifying.
While hiring personnel is never foolproof, you can up the odds of finding and selecting a superstar if you act carefully and consistently. Trusting your gut is fine to a point. But you’ll also want to cover all your bases so that you avoid costly mistakes.
Recruiting and hiring employees begins with a plan. If you plunge in without a systematic approach, you can rush your decision and wind up with a mismatched person who’s ill suited to work in your hard-charging, fast-growth environment. What’s worse, you can land in legal hot water without even realizing you’ve done anything wrong.
Advantages to planning your recruiting and hiring:
- You ensure that you hire smart the first time. A system that helps you assess candidates thoroughly reduces the odds that you’ll have to repeat this expensive, time-consuming process.
- You can build a database for your future hiring needs so you don’t have to start from scratch every time. With each hiring decision, you’ll collect resumes, job applications, and interview evaluation forms all of which can give you a head start in identifying future candidates.
- It helps control training costs. By first identifying the skills and experience needed to do a job and then hiring the right person to do it, you can reduce the need for new employee training.
- It helps you document and standardize a potentially litigious process. A well planned recruiting and hiring system, complete with applications and forms that your attorney has approved, creates a paper trail to protect you from adverse legal action.
Publicize Your Opening
Aggressive entrepreneurs often find their growth plans stymied by the lack of qualified people to fill positions. In a tight labor market, this problem intensifies. But that’s no reason to hire the first warm bodies that walk in the door.
You need to define the job clearly, list those prerequisites applicants must have vs. should have, and plot an outreach strategy so that you target a pool of people who fit the bill.
Identify Your Need
Before you post a job opening, ask an employee who’s currently in that position to write out for you in specific terms what the job entails. If the job is new to your company, list all the duties that you think it will require.
Anticipate the questions applicants will have from the start. Examples:
- How many hours a day will be required to get the job done? How many hours per week do you need someone? Is this an exempt or non-exempt job? Is it temporary?
- Must the job be done in the office, or can someone work from home?
- What kinds of education/experience/job skills are required to do this job?
- What’s the potential for advancement?
- What kind of supervision can the worker expect?
- Are there any physical demands of the job? Examples include lifting, driving, extra-long workdays on your feet that require lots of stamina.
- What duties are involved? Quantify the tasks if possible. Examples: transcribing four 10-page reports a day; responding to an average of 10 online customer requests a day; answering 50-70 calls a day; etc.
Your job description alerts candidates of what to expect, helps set the pay rate for the position, and lays the groundwork for performance standards so that both you and your employees can track their progress. It also includes the following information:
- Job title
- Reporting relationship
- Primary job function
- Primary and secondary duties of the job
- Job requirements (formal education or training; experience; technical or nontechnical skills; budget responsibilities; supervisory duties)
Then there’s the issue of pay. While large companies often include a salary range for a specific position within the job description, smaller firms may want to maximize their flexibility. In any case, you must still decide how much you’re willing to pay someone and what employee benefits to offer. Analyze salary surveys for similar firms in your industry, which you can obtain from professional associations, trade groups, trade publications, your local chamber of commerce, and major firms in your area.
Spread the word
After you clarify the skills and experience you need to fill your job opening, it’s time to launch a search for candidates.
The quantity and quality of the applicants you attract will largely depend on where you look for them. If you seek only highly technical or skilled positions, you may want to limit your advertising to trade publications. This increases the odds that those candidates who apply will have specific backgrounds and experience. An administrative aide, by contrast, might come through a “help-wanted” sign posted on your office door or a classified ad.
Regardless of how you spread the word, specify how you want applicants to respond. It’s usually best not to give out a phone number you could get swamped with unwanted calls. Instead, provide a mailing address, fax number, and Web address for people to send their resumes.
Many entrepreneurs find their best hires through word-of-mouth. Tap these resources:
- Your personal network. Give your friends or professional contacts a chance to refer candidates. Ask everyone from your accountant and lawyer to consultants or independent contractors you hire. Collect Web addresses for your network of friends and acquaintances, write a brief e-mail that describes the job, and send them an online “news flash” about your opening. This makes it easy for them to pass along your information to potential candidates.
- Professional associations. Contact outplacement firms, alternative employment groups, trade organizations, chambers of commerce, and other business associations. Many of these groups will help you publicize your job opening to their members or clients via a newsletter, online job posting service, or central bulletin board.
- Schools. Colleges, universities, high schools, and technical or vocational programs have job placement offices that link graduates with employers. Assign one of your employees as an “ambassador” to these schools; this person should forge relationships with career-planning directors and give them the inside track on job openings at your company.
- Firms that downsize. If employers lay off workers in your area and you want to hire their outgoing employees contact these firms and explain the types of workers you seek. Try to “partner” with other businesses so that you get first crack at the individuals they let go.
- The federal government. When local military bases discharge personnel, hiring managers can find excellent candidates. Navy and Marine training facilities are especially fruitful sources of workers. Even if you’re not currently hiring, invite a military placement officer from a local base to visit your office or tour the plant. The more they learn about what you do and want, when hiring needs may arise, the more they can steer potential candidates your way.Also check the U.S. Department of Labor Employment and Training Administration’s Web site, a comprehensive resource to help employers fill jobs. Or contact your regional office of the Labor Department regarding its Employment and Training Administration (ETA) recruiting resources:
- Boston: (617) 565-6330
- Philadelphia: (215) 596-6336
- Chicago: (312) 353-0313
- Kansas City: (816) 426-3796
- San Francisco: (415) 975-4610
- New York: (212) 337-2139
- Atlanta: (404) 562-2092
- Dallas: (214) 767-8263
- Denver: (303) 844-1650
- Seattle: (206) 553-7700
- Your present employees. Many large employers pay a referral bonus to employees who introduce a candidate who ultimately gets hired; an increasing number of entrepreneurs are doing the same. You can pay a set amount, say $250, to any employee who brings aboard someone who stays three months. Or you can offer a range of bonus payments depending on how long the new hires stay and what job they fill.
While word-of-mouth sources often result in the best candidates, you may want to expand your search to cast a wider net. Examples:
- Employment services typically fall into two categories: contingency and retained. You can hire contingency search firms (also called placement agencies, personnel agencies, or employment agencies) to recruit employees at all levels, although they’re most often used to fill low-level jobs.
- Executive search consultants (also called headhunters or executive recruiters) are also contingency or retained. When retained, they work on a contract with a client firm to fill a specific opening usually a mid- to high-level manager. They may be paid a retainer fee of one-third at inception, one-third at the halfway point, and one-third when the candidate is hired. While headhunters vary, a typical retained recruiter’s assignment involves a job that pays between $80,000 and $150,000 a year. Contingency recruiters, by contrast, usually handle assignments for jobs below $80,000; their entire fee is paid after a candidate is chosen or “placed.”
- Print advertising often generates the most response, but if you choose regional and national newspapers prepare to screen resumes and reply promptly to candidates. The best day to place an ad is usually Sunday.
- You can also advertise in trade magazines or specialty newspapers or journals. See Bacon’s Magazine Directory (800-621-0561; www.bacons.com). If you advertise nationally, candidates may expect you to pay for their travel to and from your office for interviews.
- Radio advertising for support level jobs or sales positions can also work well. The M Street Radio Directory (800-248-4242) includes program formats, recent ratings, and contact information for almost all U.S. and Canadian AM and FM stations.
- Online services serve as a clearinghouse of resumes and online classified ads that can match job seekers with recruiters. Some of these sites charge employers to list ads. Examples: Monster.com, CareerBuilder, Careerjournal.com from The Wall Street Journal, America’s Job Bank, HotJobs, Internet Career Connection, and NationJob Network, which even includes a link for entrepreneurs to attract venture capital. If you’re trying to fill marketing jobs, see Marketingjobs.com.
- Some job boards offer a resume database service with either “public” or “confidential” resumes. Public resumes allow you to contact the job seeker directly. Confidential resumes do not list this information, so you must use an e-mail service that the job board provides to reach the job seeker. Thus, the job seeker remains anonymous at first.
- Your Web home page. Accept job inquiries on your company’s Web site and post job openings as they arise. Update prospective employees about your organization’s news, your employees, growth rate, corporate culture, milestones, products and services, career paths, training, and benefits.
Write a Catchy Ad
A recruitment ad should sell both your company and the specific position that’s open. Avoid cliches such as “dynamic company seeks” or “self-starters wanted” Offer concrete, enticing facts instead. Use the answers to the following questions to enliven your ad:
- How does your company differ from rivals?
- How fast is the firm growing? Include year-over-year growth rate as evidence.
- Do you offer flexible hours or a work-at-home option?
- What makes your benefit package special? Does it include day care/elder care, a concierge, or a bring-your-pets-to-work policy?
- What’s the growth potential for new hires?
- Did you just move into a state-of-the-art facility?
Hiring expert Robert Half offers these three examples:
- “A rapidly growing restaurant chain is seeking a manager who is anxious to take on more responsibility.” This sells the career potential.
- “A small but dynamic advertising agency that specializes in travel accounts is looking for an administrative assistant who likes variety and doesn’t mind the pressures of deadlines.” This sells the glamour of working in travel.
- “World-renowned museum looking for astute individual to manage our financial affairs.” This sells the prestige of working for a fine museum.
Consider including the name, nature, and location of your company. You’ll get a greater response, which can work for you if you’re equipped to handle incoming resumes or against you if you’re not. To weed out applicants, you may want to include a salary range for the job or even mention stock options as a piece of total compensation.
Don’t refer to race, creed, color, gender, age, physical ability, or other discriminatory factors. That’s against the law and it’s bad business. Make sure all requirements specified in the ad are job-related. To protect yourself further, don’t promise in the ad that the position’s “permanent,” “secure,” or “stable.” End each ad with the phrase, “Equal Opportunity Employer.”
If you answered “yes” to all five questions, you’re all set. If you answered “no” to any of them, sharpen your ad so that it draws the most favorable response from the kind of high-quality candidates you seek. Investing in a display ad or a longer, more detailed write-up may attract more candidates, but it’s more important to keep the text succinct and engaging. Each phrase should evoke excitement and reinforce your company’s distinct image. Use words like “we” and “our” to inject a more personal tone. Write the ad as a newspaper reporter writes a story: Choose a headline and opening sentence that capture readers’ attention. The headline should list the job title and describe the position. The first sentence should explain the benefits of the job and of working for your company.
There are three rules to sift through resumes efficiently:
- Review them in small doses. Assess no more than 15 in one sitting.
- Sort them into three groups: definitely interview, possibly interview, and do not interview.
- For key positions, have at least two people evaluate each resume. A second reviewer’s input can ensure each resume gets fair consideration.
Take notes on any concerns (such as unexplained gaps in employment history or apparent demotions at past employers) and list questions you want to ask the applicant. When scanning the resume, use a different color pen for jotting down positive and negative indicators.
Don’t rely solely on software packages that help you search resumes for key words and phrases that describe the desirable skills, proficiencies, or prerequisites you seek (such as “contract negotiations,” “budget administration,” or “PowerPoint”). Such programs serve a useful purpose if you’re receiving hundreds of resumes and you need to filter out unqualified applicants. But for small, fast-growing companies, it’s often wise to have a manager devote at least a minute or two to scanning each resume to get a more complete picture of each candidate. You may have the flexibility to pursue someone who lacks certain skills but possesses other, equally valuable talents that you can use. Moreover, strong applicants can get screened out because their resumes lack a certain word, even if they’re otherwise well qualified.
Note: Some Internet job bulletin boards will screen resumes for you using key-word searches for an additional fee. If you expect a deluge of resumes and you’re willing to risk losing out on some potentially strong candidates, this may prove a cost-effective, timesaving step.
After you evaluate resumes, arrange short phone interviews with promising applicants. Use these conversations to explain the job in more detail, gauge the individual’s interest, clarify the person’s work history and experience level, and schedule a face-to-face meeting.
Before an in-person interview, map out the process so that you’re well prepared. Example:
- Greet candidates and have them fill out a job application
- Give an overview of what you want to accomplish in the interview
- Elicit information about candidates (You’ll get a better sense of candidates by asking questions before sharing specific information about the job.)
- Briefly describe the job and your company
- Invite and answer questions
- Close the interviewSource: Adapted from Robert Half on Hiring
Your interview questions should help you understand what the candidates did at their last job, how they did it, why they did it, how much supervision they faced, how they felt about their job, and why they left (if they’re currently not employed). Use open-ended questions to encourage applicants to say more than “yes” or “no.” Example: “In leading your team, what did you do, specifically, to make the group successful?”
Other good interview questions include:
- What do you consider the single most important idea you contributed or your single most noteworthy accomplishment in your last job?
- Can you describe what your workplace must be like for you to work at your best?
- What kind of rules did you think were appropriate in your last job? What rules do you think were unnecessary?
- What did you enjoy most/least about your last job?
- Can you walk me through how you arrived at an important decision in your last job?
- What are the best/worst risks you took in your last job? What was the result of those risks?
- Describe the best boss you’ve ever had.
- Given what we’ve discussed about this job, in what areas might you need further training to maximize your contribution here?
Prepare to follow up with the magic word, “Why?” This simple question lets you extract more valuable information from interviewees and allows them to elaborate on their points.
Avoid trite, unhelpful questions such as:
- What are your strengths and weaknesses?
- Where do you see yourself in one year? Five years? Ten years?
- What do you think you can bring to this job or to our company?
- Tell me a little about yourself.
Steer clear of questions involving religion, race, national origin, gender, age, marital or family status, sexual orientation, physical disability, arrests, or financial status. It is illegal to ask questions pertaining to any of these issues.
If you ask illegal questions, you can face a discrimination lawsuit by unsuccessful applicants. If you’re unsure about whether to ask certain questions, ask an employment law attorney for advice.
During the interview, observe candidates’ body language along with their answers. Do they take responsibility for their past successes and failures? Do they radiate confidence? Do they seem excited by working in an entrepreneurial environment?
Meanwhile, don’t give away too much with your facial expressions and nonverbal cues. Indicating obvious approval or disapproval when a candidate speaks can influence what you hear next. An applicant who senses approval may try too hard to please or shut down for fear of triggering your disapproval.
Before closing the interview, ask candidates, “At this point, to what extent are you interested in working here?” Then thank the candidate and provide a timetable of what happens next.
Rate each candidate on a scale of 1 to 5. The candidate’s qualifications:
Sample Interview Evaluation Form:
To further narrow the candidate pool, check at least two work-related references for applicants you’re seriously considering. Don’t just contact the candidate’s supervisors or human resources managers; also seek out subordinates, co-workers, and the boss’s boss.
Former employers may not answer all your questions for fear of triggering a defamation lawsuit. For that reason, asking for “employment verification” instead of a “reference” may help launch the conversation more successfully. At first, just stick to the “safe” facts such as the date of hire, past job duties, and supervisory responsibilities.
Once the reference feels more at ease, ask more revealing questions such as:
- In your opinion, what are this person’s strengths?
- In what ways could this person improve?
- How much of a contribution do you think this person made to your company while working there?
- How would you compare this person’s work to others who had the same job?Source: Adapted from Robert Half On Hiring
With the reluctance of most references to open up, you may want to conduct your own background check to confirm the applicant doesn’t have a history of violence, a criminal record, or other problems. Many consultants offer background checks and other investigative services; some firms are listed in the “Resources” section.
Beware of skipping the reference-checking step. Even if you assume you won’t learn anything useful, not doing any legwork can expose you to a “negligent hiring” lawsuit if the individual turns out to wreak havoc in your workplace. Just making the calls and documenting the responses can protect you from liability later on.
Reference information is always subjective. If an employer sounds bitter about your candidate, but gives grudgingly positive answers to your questions, you might rightly assume that the employer wasn’t happy about the candidate’s leaving the company. On the other hand, if all of your references cite a disturbing flaw in your candidate, such as a tendency to miss deadlines, then you’d probably do well to reject this person. If a reference offers information that disagrees with what the candidate told you, ask the candidate about the contradiction without sharing the source of the information (references are confidential). You can then decide whether to continue considering the candidate for employment based on what you learn.
One trick to reference checking is to make the most of voice mail. Here’s a technique from Pierre Mornell, author of 45 Effective Ways for Hiring Smart!: Call at least five of a candidate’s references in the evening when you don’t expect them to answer. Leave this message on their voice mail, “[name of candidate] is applying for a job with our company. If you think this person is excellent, please give me a call at [your phone number].” The more calls that are returned, the better.
Administer Personality Tests
Now that you’ve identifying your top candidates, winnow them down even more by having them take personality tests. As long as you administer such tests consistently and they aren’t discriminatory, you’re probably on safe legal ground. But check with an attorney just in case.
Examples of tests:
- Manager Performance Predictor (MPP). Designed by Friedland & Marcus, a career counseling firm in Chicago, this simple, low-cost test takes about 20 minutes. Call (800) 931-1107 or see Friedland & Marcus .
- “HT squared.” Also known as the “High Tech-High Touch” test, this computer-based inventory by Select International in Pittsburgh comes in different versions depending on the type of job you’re filling. It takes 90 minutes to 3 hours for applicants to complete and costs $90 to $500 to administer. Call (800) 834-8593 for more information.
Aside from personality inventories, you can also administer skill- and knowledge-based tests to measure a candidate’s familiarity with certain job-related competencies.
Take Your Pick
Making the right hiring decision is critical to your business. Every hiring mistake can cost your firm 1.5 times the candidate’s salary, according to Avert Inc., a Fort Collins, Colorado-based company that provides background checks and employment screening services for employers.
To avoid making a bad hire, review all the data you’re collected on your top candidates. Ask a trio of your trusted senior managers to analyze all the information on applicants who’ve made your “final round.” Compare your management team’s opinions and recommendations and note areas of agreement.
As an added precaution, you may want to evaluate strong candidates’ work product by asking them to demonstrate their talent. Choose an exercise that lets them tackle the specific duties of the job you’re seeking to fill. Examples:
- Ask them to write a letter alerting your customers of a new billing procedure.
- Have them call a supplier to discuss the status of an order or even complain about late shipments.
- Invite them to a meeting and assess the level of their contribution.
- Give them the specs on a new product you’re rolling out and ask them for ideas to promote it.
- For support staff, have them answer your phones for ten minutes and observe how they handle callers.
- For technical support staff, have them try to fix a glitch in your computer.
Other keys to smart hiring:
- Focus on accomplishments, not credentials.
- Look beyond first impressions. If you fall head over heels for candidates too early in the interview process, you may disregard negatives that surface in subsequent interviews, personality tests, background checks, or other stages of the courtship. Fight off the “halo effect,” where you discount evidence that flies in the face of your initial fondness for the candidate.
- Don’t try and force the fit. If a candidate doesn’t complement your organizational culture and seems threatened or uncomfortable with the informal, fast-paced, or high-energy atmosphere of your business, that’s a red flag.
- Visualize candidates working in the position. If you can’t picture them working well with you, your customers, and employees, don’t hire them.
- Don’t rush a hiring decision and settle for less than you originally sought.
- If you make a mistake, fix it fast. If you know after a week that it’s a bad fit, rectify the situation immediately.
Make a Job Offer
Once you’re sure you’ve found the right candidate, make a job offer promptly. Call to give a verbal offer of employment. When the candidate agrees to your terms, follow-up that same day with a written confirmation letter that summarizes the points you discussed on the phone.
The written job offer should contain the salary, benefits, and other terms of employment. Examples: the job description, the hours and schedule expected of the employee, the length of the probationary period, and the start date. If your job offer also serves as a letter of agreement to be signed by you and the prospective employee, be sure that the letter includes a sentence such as, “I understand that if hired, my employment is for no definite period of time, and may, regardless of the date of payment of my wages or salary, be terminated at any time.” Have an attorney review all employment documents including job offers and letters of agreement.
Meanwhile, don’t neglect the candidates whom you did not select. Notify all of them of your hiring decision in a prompt, courteous manner. Apply a standard procedure so that all of them receive a rejection letter.
___ Provide employment application, which has been reviewed by legal counsel
___ Meet applicant face-to-face in private
___ Explain information required on application and answer questions
___ Tell applicant to answer all questions completely and accurately
___ Review completed application carefully
___ Confirm accuracy of spelling and addresses of relevant organizations, references
___ Determine applicant’s residence and how long he/she has lived there
___ Ask the applicant about any gaps in employment history
___ Ask applicant if you’ll need additional information concerning any name change, nickname, or use of an assumed name to allow you to check references and work record
___ Review applicant’s educational training if it has bearing on the position
___ Ask if the applicant has been convicted of a felony. (You may not ask if an applicant has been arrested.) Explain that a conviction will not automatically bar employment. In determining whether or not to deny employment based on the applicant’s conviction, consider the following:
- ___ The relationship of the crime to the job duties;
___ The nature, number, and circumstances of the offense(s);
___ The length of time between the conviction and the application;
___ The individual’s employment history;
___ The laws that govern the hiring of people with criminal records in your state; and
___ The individual’s efforts at rehabilitation.
___ If the job requires driving, ask applicants for a valid driver’s license and about his/her driving record. (You can also call the Department of Motor Vehicles to request a report on the applicant.)
After the Initial Meeting:
___ Check all personal/character references and document all of their comments.
___ How do they know the applicant?
___ How long have they known the applicant?
___ Upon what is the reference based (firsthand experience, secondhand info)?
___ Do you need to ask for more current references?
___ Check all professional/employment references and document all of their comments.
___ Confirm that past job duties match what’s listed on application and resume.
___ Determine length of employment.
___ Determine reasons applicant left the previous job.
___ Determine if former employer was satisfied with applicant’s performance.
___ Confirm educational information provided.
___ If you’re concerned about the applicant’s criminal past and its effect on fitness for the job, you may want to get a copy of the applicant’s criminal record through the State Police, the Office of the State Attorney General, Offices of the County Clerk, the District Attorney’s office, or your attorney.
___ Request a consumer credit report, if necessary (you must comply with the federal Fair Credit Reporting Act and similar state laws).
___ Review the application and information with other company decision-makers.
Source: Jackson Lewis Schnitzler & Krupman, a national employment law firm based in White Plains, NY.
The Complete Reference Checking Handbook: The Proven (and Legal) Way to Prevent Hiring Mistakes, 2nd edition, by Edward C. Andler. (AMACOM, 2003).
96 Great Interview Questions to Ask Before You Hire by Paul Falcone. (AMACOM, 1996).
Finding, Hiring, and Keeping the Best Employees by Robert Half. (John Wiley & Sons, 1993).
Job Seekers Guide to Executive Recruiters by Christopher W. Hunt and Scott A. Scanlon. (John Wiley & Sons, 1997).
Hiring Great People by Kevin C. Klinvex, Matthew S. O’Connell and Christopher P. Klinvex. (McGraw-Hill, 1998).
Quality Interviewing by Robert B. Maddux. (Crisp Publications Inc., 1995).
45 Effective Ways for Hiring Smart! How to Predict Winners and Losers in the Incredibly Expensive People-Reading Game by Pierre Mornell. (Ten Speed Press, 1998).
Topgrading: How Leading Companies Win by Hiring, Coaching and Keeping the Best People by Bradford D. Smart. (Prentice Hall, 1999).
High Impact Hiring: How to Interview and Select Outstanding Employees, 2nd ed. by Del J. Still. (Management Development Systems, 2001).
Online Salary Surveys
Wageweb has access to surveys.
OfficeTeam has annual salary guide for administrative workers.
To compare salaries by city, see careers.yahoo.com and click on “Salary Wizard.”
Note: Many associations and trade publications do their own surveys.
It’s called Adversity Response Profile 7.0, designed by PEAK Learning Inc.. Downside: Managers must go through a 2-day certification program before they can use it for hiring, so it’s not easy to administer off-the-shelf like the other tests.
Professional Groups or Trade Associations
Jackson Lewis Schnitzler & Krupman, a national employment law firm with 20 offices in the U.S.
Background checks/reference checking firms
Informus Corp. [its Web site lets employers run their own background checks]