Top 10 Hiring Mistakes

Top 10 Hiring Mistakes

When Theresa Thompson’s 18-year-old son Ryan wanted to work in the family business, Thompson didn’t just clear off a desk and put him right to work. Instead, she sent him through the same rigorous hiring process she uses for any prospective employee.

“I learned the hard way that you don’t just hire someone because you know them personally or because they are family,” says Thompson, president of Tea Time Events, a full-service event planning, management, and production company. “My mother used to work for me as my receptionist and bookkeeper. But it turned out that she was not the representation that I wanted as it relates to establishing customer loyalty and being the first point of contact when someone calls, because if a client had not kept a payment schedule precisely, she would not greet my clients with a smile or pleasing voice,” she says.

Now, when looking to bring on new talent, Thompson first assesses the type of temperament that would best fit the job. She reviews her business culture to see how it has changed. This gives Thompson further insight into what type of individual would fare well within her organization. She then evaluates how to cultivate the talent once on board and creates a plan for how the new employee can contribute to the team. Lastly, Thompson begins the actual interviewing process to vet likely candidates based on the core skills and competencies required for the position.

Human resource consultant Patricia Mathews says effective team building is critical to any company’s success, but is especially important for the small business owner who often finds it more difficult than larger shops to absorb the financial and operational impact of a hiring blunder.

“Replacing a poor hire can cost up to 80% of an employee’s salary, not to mention the fact that companies are going to lose sales and productivity,” says Mathews, owner of Workplace Solutions, a human resources consulting company and affiliate of St. Louis-based Quest Management Consultants. “There is a negative impact on morale, a risk to projects and clients, a drop in organizational efficiency, and it can increase work-related accidents,” she says.

Mathews adds that any claims of discrimination as a result of a bad hire can run businesses $50,000 or more to defend in court. That type of payout could kill a small business.

“Good hiring is a function of finding new hires with the right skills, abilities, and competencies, the motivation to use those skills, and who are a good fit with the organizational culture,” Mathews says. “But small business owners need to understand that employment is a process that involves recruiting, assessing the candidates, interviewing, selecting, and organizational orientation. So, it takes time, careful thought, and planning,” she says.

If done correctly, small businesses can increase their market value up to 2.4%, according to global consulting firm Watson Wyatt. But many small businesses fail to reap the benefits of smart hiring because they either cut corners to keep costs down or fail to clearly outline their mission and goals