How Hiring the Wrong People Can Kill Your Business
Written December 29, 2011
There is no decision more important than who you hire for your business. The right people will make you money. The wrong people always cost you money.
When you think about it, there is only one reason to hire a new employee; to improve your productivity and make you more profitable. Unfortunately, studies have shown only 16 percent of employees actually make us money.
This is why it is so important to “actively” recruit until you have at least five qualified candidates, use all available resources to narrow you choice down to at least two finalists and hire the one with the best “Job Match.” If you don’t, you’ll most likely end up with an unreliable, unmotivated, unproductive “workplace survivor” that will limit your business growth, or a “mis-hire” that can kill your business.
Anything less than a TOP Performer in every position causes mediocrity. Mediocrity leads to stagnant sales, poor productivity and the inability to accomplish your goals.
So how can hiring just one wrong person kill your business?
Here are the three most obvious Business Killers:
1. High Payroll Costs – Whether people quit or are terminated, to recruit, rehire, retrain, etc. turnover will cost you around $10K for an entry level position and up to $150K for a sales or management position. Lower your payroll costs by hiring the right people the first time
2. Theft – More than one third of businesses that declared bankruptcy last year were “stolen out of business”… by their employees. Studies show, more than half of employee theft (time, resources, merchandise, etc.), is committed by managers and supervisors.
3. Lawsuits – One of three businesses will be sued this year on an employment issue. You can be held liable for your employee’s actions whether they are on the job or not.
These business killers have been known to creep up on an unsuspecting small business owner and kill a business in months or even days. Luckily the effects of a wrong hiring decision are not always this drastic.
Sometimes the effects of a mis-hire can linger for years as they maim (rather than kill) your business. Holding you back from your productivity goals and revenue potential.
Here are the five most common, costly and on-going Revenue Robbers:
1. Conflict – How much of your time is spent trying to get employees to communicate more effectively, work better with one another, improve teamwork, etc.? You don’t have to “babysit” when you hire the right people the first time.
2. Poor Productivity – This is the number one business issue today. It used to be “Finding & Hiring Good People;” which is now number two. Your best people are internally motivated and need to be cloned so you can solve both of these problems.
3. Errors – Some people have the competencies to be trained quickly, continue processing new information and multi-task. Other don’t… and have continued to create the costly errors that their teammates are forced to solve.
4. Lost Customers & Sales – You know when you’re business is experiencing conflict, apathy, low motivation and errors. So do your customers; and they won’t put up with it. If you really care about the customers that keep you in business, stop hiring the wrong people and stop losing clients to your competitors.
5. Lowered Expectations – This is the most costly effect of the wrong people. They have killed your dreams of becoming the most respected, productive and profitable business in your market and have you behaving like a “Market Survivor” instead of a Market Leader. In continuing to put up with performance issues, you’ve lowered the productivity expectations you have for your staff.
It is time to once again raise the standards and expectations you have for YOUR business… and life. And here’s some good news…
All of the costly business killers above can be solved and eliminated very quickly. Many clients of ours have done so in 60-days or less. AND SO CAN YOU!
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The main reason you spend the majority of your time micromanaging employees
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