Have you ever heard the saying ‘you are only as good as your team’? It’s very true. Your business will be judged on the service and quality that your team is providing. If you have had a stable company for years you might use the same tradesmen that you know work well.
However, when you are looking to expand, business owners find it difficult to find or keep decent tradesmen. This article will discuss how you can be successful at this.
One of the big barriers to growth is hiring the wrong staff. When you grow at a rapid pace and struggle to keep up with the workload, it can feel desperate to get anyone on board, even if they are not the right fit.
I’ve hired the wrong people many times throughout my business journey and, when I look back, it’s a huge regret. So much time and money are wasted training someone up if they were never the right person in the first place.
If you start having doubts about someone, your gut instinct is probably right – maybe it’s time for them to go. Your business isn’t a charity, and you cannot carry people. Although it can feel ruthless, if someone isn’t working out you will be doing yourself and them a favour to part ways and move on. It would be much easier, though, if you didn’t put yourself in that position in the first place. Who enjoys firing people? It’s an awful position to be in. How much better would it be to get the hire right in the first instance?
The challenge doesn’t stop there.
What about when you have found exactly the right person? They are fantastic, better than you could have hoped for – now you start to panic that they may leave you. They are a hugely valuable member of staff now, how would you cope if they left? This section is designed as a guide to both attracting and retaining the best staff.
No matter what safeguards you put in place, wrong hires may slip through the net; you only know 100% if someone is the right fit once they start work and you can monitor them over a few months. Some have a gift for presenting themselves in an amazing way and breezing through an interview. It’s only further down the line, when the cracks start to appear, that you realise they are not the right fit.
I’ll show you how to deal with those situations. Let’s find out now how you can protect yourself and your business as you grow, and how to find loyal people.
The Cost of a Bad Hire
The first thing to understand is why it’s so important that the recruitment process is successful. You may think, ‘I’ll just sack them if they don’t work out and hire a replacement’. Well, yes, you could, but you don’t want to be carrying people if they’re not right for your business. Letting people come and go from the business can be extremely damaging. Why?
First, it can damage staff morale. People generally don’t like change. If a member of your staff has got used to working with someone closely, maybe even becoming good friends with them, and then, all of a sudden, they are out of the door, how do you think that will make them feel?
The staff member who stays won’t be thinking about what’s best for the business, they will be focusing on how it has affected them emotionally. They’ve just lost a good friend. This could make them resentful of the business, and you as its leader.
Additionally, if you have a high turnover of staff, this could make some within the company anxious. ‘Am I going to be next?’ they may ask. Staff worrying like this will damage morale and their performance will be affected.
What’s the answer? Should you try to retain poor staff as long as possible, in the hope that they might improve? No, certainly not.
If you know someone isn’t working out, you’ve addressed the issue with them and provided training and they still haven’t improved sufficiently, you need to take some advice from an HR consultant and let them go without delay.
Allowing someone who is underperforming to stay on can damage the morale of the existing staff. When they are working hard, beavering away at their jobs and the person working next to them is getting away with murder, this will be extremely frustrating for them.
Even though it’s you who is paying the wages, they will start to think, ‘Why am I putting in all this effort, when he/ she clearly isn’t?’ The attitude and work habits of a bad employee can gradually infect the entire staff.
Are you starting to see how damaging it can be when the wrong person is brought, and kept, on board? It’s not only damaging for morale, it’s extremely bad news for your profits.
You may think working out how much a bad hire costs a business is straightforward:
John was paid £2,500 per month and was kept on for three months = £7,500.
In fact, it works out to be much more than that.
You have a new employee – hooray! So far, it’s cost you over £3,000 to make the hire. Next comes the on boarding. You need to show your new employee the ropes, how your systems work, how you do things. There may be an element of training needed to get them up to scratch.
It can take anywhere between two and four weeks before a new employee is fully up to speed. That’s another £2,500 spent, without much productivity to show for it. One month in, and the new employee has cost you £5,500. They start getting on with the work in earnest and you expect great things, but it soon becomes evident that they are not cut out for the task.
Now it’s costing you in productivity. Only you will know how best to measure this for your business but it could be thousands each month. If you sack the hire in month three, they’ve already cost you £10,500, and that’s without factoring in the productivity losses.
I learned this the hard way in my own business when we were growing rapidly. Although I’ve now got a fantastic team around me, who I would re-hire in a heartbeat, I’ve previously had bad hires who have lost me contracts worth hundreds of thousands, stolen money from me, damaged company vehicles, among other things. I even had an employee who was absolutely amazing at interview but turned up on the first day drunk as a sack – and then was arrested by the police for attempting to drive home.
As you might have guessed, they were fired immediately. You can see that I’ve certainly experienced the pain of a bad hire. Getting it wrong can have a huge cost, far more than the employee’s wages.
The lesson: take your time and recruit carefully. Don’t take on a risky hire just to fill a seat when you are growing quickly and can’t keep up with the workload. Attract and retain the best.