Marsha Murray founded her staffing and recruiting agency 20+ years ago as a solo operation, with a $2,000 loan and a used typewriter in a spare bedroom. Around 1993, after her two children were in elementary school, she hired her first employee.
She knew the ground rules of hiring, of course, because that was her business. She parsed the resumes and looked for the skills and attitudes to match the jobs at her growing agency.
But despite her expertise, some of her early hires fell flat. Murray eventually figured it out: She could avoid bad hires by testing whether the candidate’s work style matched the job and her company’s culture.
“A candidate may be highly qualified on paper, but his or her background and skills will seldom convey whether they prefer single tasking vs. multi-tasking, if they work well in a faster paced environment, or what drives and motivates them,” says Murray, 59, who now has nine employees serving more than 800 client companies at Houston-based Murray Resources. After the first interview, she sends candidates two tests: a values assessment and a behavioral assessment. For the sales-oriented positions in the staffing agency, she looks for people who have a utilitarian bent – a sort of Jerry Maguire, show-me-the-money approach to the world — and a fairly individualistic work style.
“If their natural work style is not conducive, then it’s not going to be a good fit,” she says.
Entrepreneurs have varied approaches to hiring, but nearly all say that the biggest mistake they made in their early years was not paying enough attention to the soft side of staffing. Getting a qualified person is easy, they agree; making a perfect match is hard. Here are five ways to avoid common hiring pitfalls.
Know your own values. It’s great to evaluate candidates’ values, as Murray does, but you need something to compare them to. First-time entrepreneurs may see writing a values or mission statement as a waste of time. Successful entrepreneurs know that being able to articulate your values is a strength that helps you in hiring. Serial entrepreneur David Niu, whose Seattle, Washington-based company, TinyPULSE, enables employees to submit anonymous feedback to their employers, wrote down the qualities of the people he has loved working with and the qualities of the people who didn’t fit. Then the 39-year-old wrote several drafts of his values, asking himself each time, “Do these [values] enable the first column to flourish and weed out the second group?” If the answer was no, “I repeated the process until it did,” he wrote via email. He has run three companies, and finds that his employees today are a better fit because of this process.
Don’t hire friends. You are apt to oversell their work abilities because you like being with them, says Peter Cohan, a management consultant, venture capitalist and author of 11 books, including Hungry Start-up Strategy, who also teaches business strategy at Babson College. And unless you are brutally honest with your friends now, it’s unlikely you’ll be able to level with them after they’re on board.
Interview carefully. Taking time to find the right people to help you grow your business is probably the most important investment you can make.
Andrew Schrage, cofounder of the personal finance site Money Crashers, remembers being so swamped with work early on that he hired a web editor after only a 20-minute interview. On paper, the person, who had come from a pool of about 100, looked fine. In person? Not so much. “I ended up letting him go after only a few months,” Schrage says.
Meet with candidates at least twice, and have more than one co-worker or manager meet a candidate. Schrage, who now has 15 employees, casts a wide net for a big pool of potential hires, narrows the field and asks specific, detailed questions. “Following up with references is crucial as well,” he says.
Give feedback early. Schedule time a month after hiring for a real review, advises Cohan. You have a limited window of time to help an employee who isn’t quite fitting in to adjust to the company culture. “This means not just passing in the hallway,” he says. Take your new employee to lunch to offer feedback.
Don’t wait to cut the tie. If there’s a single piece of advice we heard from entrepreneurs, it can be boiled down to this: hire slowly, fire fast. “During my first company (NetConversions, which he sold in 2004), we raised about $1 million and immediately grew the team to 20 people,” says Niu. “When the first Internet bubble burst, we had to painfully lay off friends.
“Nowadays,” he says, “I know that I should only hire when we’re bursting at the seams with the current team and truly need that person, versus wanting a person.”
Entrepreneurs often tell stories of waiting too long to fire an employee, but there are relatively few tales of employees whose work performance radically improved over time. “It’s kinder for you and the employee to do it quickly,” says Schrage.
Elizabeth MacBride is co-editor of the $200KFreelancer, a site focused on helping independent professionals make a good living.