Entrepreneur Series – Lesson 6 – Poor Staffing Decisions

One of the first things I heard when I got into management in my career is the phrase “you have to put the right talent on the bus”. While I understood its meaning, it took many years to realize how important hiring decisions are to grow an organization the right way. I also felt the pain of making poor hiring decisions, and how much time and productivity you can lose from just one bad hire. No entrepreneur lives in the panacea of having zero turnover as sometimes they might like to make it seem, but certainly making the right staffing decisions by putting people in the right roles can allow your start up venture to get off on the right foot.

One of the critical questions to ask yourself early in your venture is what role do you (the CEO/owner) play in your firm. If I was to use a baseball analogy, what jobs are you going to be a player at in the company? What jobs will you play the part of being a coach at in the company? What jobs will lie somewhere between those roles? The first thing for you to figure out is what your role is going to be, and that makes the process of making the right staffing decisions a lot easier. Here are three points to consider avoiding making poor staffing decisions.

  • Hiring family members – This can certainly be a dual edged sword as there have obviously been many successful family businesses over the years. However, it is important to determine if the family member you are hiring has the skills to fill the position you are trying to hire for in your company. While you may potentially get some more immediate loyalty and buy in from a family member, it can also be a lot harder to separate ties should that person not be able to fulfill their obligations within the job. You should be certain that you compare and contrast multiple candidates before you make a quick hire with a family member because it is ‘easy’.
  • No set interviewing process – Let’s face it, resumes are somewhat of an art form today. It’s really hard to rely on a one page document that is probably more processed than Velveeta cheese. You should have a series of interviews (with more than just you) designed to learn more about the candidate personally and professionally. One of the early mistakes new entrepreneurs make is they gloss over checking references. A really good candidate should have willing work and personal references who will speak on their behalf so you can validate the quality of the candidate. No references may give you a flashing red sign that the candidate did not perform well in their past few jobs. Make sure you run each candidate through some type of technology test as almost all interviewees put down that they know how to do PowerPoint, Excel, etc., but few really know these programs.
  • Have a dating period – One of things I learned as an entrepreneur is to fail fast. Don’t hire a new candidate full time until you have some sort of 90 day trial period. During that dating phase, your level of difficulty and scrutiny should be as high as humanly possible. You don’t want to become buddy buddy with your new employee as this will set things off on the wrong path. You should be certain to test every aspect with the candidate on the job after they have passed your interview process to make sure this is the right candidate for your company. Otherwise, you’ve only lost 90 days if it doesn’t work out—or less!

This is part six of a ten part series on entrepreneurship. Many owners make the big mistake of falling in love with a potential new employee because their ‘personalities’ hit it off in the interview process. Don’t be fooled by some initial chemistry, and focus on doing a thorough job during the interview process. This will save you time and money down the road.

Entrepreneur Series – Lesson 1 – Being Undercapitalized , Lesson 2 – Incorrectly Pricing Your Product Or ServiceLesson 3 – Know Your Role As The Owner,   Lesson 4 – Avoid Rookie Mistakes,   Lesson 5 – You Must Hire Professional Consultants

Written by:
Ted Jenkin

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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®   
Co-CEO and Founder oXYGen Financial, Inc.

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS.

About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

Hey!

My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

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Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

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2 Comments

  • Avatar
    July 19, 2013

    Seems I have become an ardent follower of this series…pen and paper every morning to glean some insights into the entreprenuer path I have embarked on. My sincere gratitude for sharing Ted.
    Hiring is hard! I can’t seem to get the right talent on the bus! Or they come on and alight sooner or later. From this list, I can tell where I have been wrong, especially on the “dating period”. I get friendly fast and I think I should tweak that a bit. Great post

  • Ted Jenkin @ Your Smart Money Moves
    July 29, 2013

    Try having someone else make the next hire. It probably wouldn’t be someone you pick, but it might fill the role with the person you need.

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