Running a Small Business

Lesson 4: Subcontractors and employees

Hiring good employees

At some point most small businesses reach the point where, for various reasons it can make sense to hire employees. This is not just a continuation of your existing business - by hiring employees you will completely change the nature of your work and what you have to prioritize. Some small business owners decide employees are just not for them and take the business in corresponding directions. Others take the plunge and many of those prosper. It's really a question of what you, as the owner of the business want from the business, whether you will like working with employees and whether dealing with problems resulting from employing people is what you want to do.

If you do decide to hire employees, you want good ones. Good employees are hard to find and they're even more difficult to identify reliably. If you're going to hire for a particular position in a structured way, you must do some analysis first.

Write down a list of functions the new employee will be expected to carry out. Now, put beside the list, the ideal result that you want from each particular function. Then think about what skills your employee would have to have to achieve the ideal result. Finally, put down what qualifications or other evidence you can ask for which will show that the potential employee has the required skills.

For example, if the employee will have to deal with warranty claims, you ideal result will be satisfied customers. He would have to write and communicate well and, if your product is technical, he will need a technical background. As a result, you will want a sample of your candidates' writing, you will want some evidence of technical training and you'll evaluate their communication skills in the interview.

Now that you know what you need, you'll have to find candidates. Most jobs are filled by referred candidates and very few are filled on the basis of applications through ads. So, while you can run some ads for this position, you're more likely to find good candidates through your contacts, both business and private. Tell everyone that you're looking for this kind of employee. A candidate who comes with a recommendation from someone you know has been pre-screened for you and is much more likely to be a good candidate than someone replying to an ad.

Finally, get and check references. Use a lengthy probation period, say six months. Offer lower pay at first and make sure the new employee knows that he will get raises if he performs well. And let the employee have a written job description which sets out what he is expected to do, how well he is expected to do and how his performance will be measured. You are offering a job in your business to someone. You plan to be an excellent employer, pay well for performance and share your success. This is a great job for someone - let them know it, make them work for it and reward them for doing it well.

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