5 Steps to Hiring (and Retaining) the Best Employees for Your Small Business

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By Christine Alemany

One of our clients introduced me to a new hire. My immediate thought was the client had hired a chief revenue officer because I could tell right away that he was a great salesperson.

However, I was wrong. He was hired to be the chief marketing officer. As a marketer, I could see red flags in his résumé that the company CEO, who had no marketing experience, did not spot. The hire had made it through multiple rounds of interviews to get the job, but with me, he wouldn’t have made it past the first round. Unsurprisingly, the company let him go after about 60 days.

Unfortunately, swing-and-miss hires happen more frequently than you might think. A company can make major mistakes when bringing in new personnel because its hiring manager does not consider all the relevant information before making a decision.

The cost of a bad hire

A new hire’s lack of experience or an inability to execute will cost your company time and money. An employee who does not pull his weight can hinder your company’s time to market, costing the firm in lost opportunities.

The direct costs of a bad hire can certainly add up, and these effects are not just anecdotal. Numerous studies have been conducted to estimate the direct costs of a bad hire. According to the U.S. Department of Labor, a bad hire costs a company at least 30% of that employee’s first-year earnings.

A CareerBuilder survey noted that bad hires decrease productivity, compromise work quality, and decrease morale—ultimately increasing overall costs and losing valuable time. The average cost of one bad hire is more than $18,700.

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The chief marketing officer from the opener example changed some things in the organization, which negatively impacted office morale. The company lost some of the newly minted reporting that the team had developed over the previous six months. Employees were finding it harder to do their jobs, and some of the best employees left in frustration. So in addition to needing a new CMO, the company suddenly had multiple holes to fill.

How to find (and retain) the best person for the job

Companies often make hiring mistakes because hiring managers lack a deep understanding of the ins and outs of the role. Additionally, the organization might not have knowledge or processes in place to fully support candidates once they are hired.

There are several ways to position your next hire for success. These steps can ensure you find and retain the best person for your next open position.

1. Understand the tactical requirements

It is easy to download white papers and research and just rattle off lingo. Unfortunately, many job candidates do this, so you need to ensure someone who understands the tactical requirements of the job is part of the vetting and interview process. If you are hiring for a marketing position, bring in a marketing consultant to help draft the job description and vet candidates if you do not have the skill set in-house.

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