How small businesses can hire the right people
Doug and Polly White have seen small businesses use all kinds of questionable hiring practices. There was the entrepreneur who hired anyone looking for work. Then there was the woman who hired and fired her sister twice. The list goes on.
In their book, Let Go to GROW: why some businesses thrive and others fail to reach their potential , the Whites found from their business consulting that entrepreneurs often don’t know how to hire employees.
“No one is born knowing how to hire and manage people,” said Polly. “You come into this with no clue how to hire and manage people. So entrepreneurs often end up hiring friends and family. While your friends and family may be right for a job in your organization it’s not always the right way to go.”
Entrepreneurial interviewed the Whites about the five steps businesses can follow in order to hire the right people.
1. Know what you need
Hire someone based on their behaviors and cognitive capabilities.
Few small businesses plan to hire
Many small business owners in the United States are reluctant to hire more employees in the near term as economic uncertainty and sagging sales continue to put pressure on company balance sheets, the latest index on small business optimism from the National Federation of Independent Business (NFIB) shows.
Of the 2,077 small businesses in NFIB’s membership surveyed, the number of companies planning to increase staff is down two percentage points to just nine percent, while 12 percent plan to reduce their workforce over the next three months. The report also shows employment has been reduced for the fifth month in a row with an average reduction of 0.1 workers per company.
“Small businesses seem to have the right number of employees,” said Holly Wade, senior policy analyst at the NFIB. “They’re breaking even. But until they see a pick-up in consumer spending there’s no reason to hire.”
Economic uncertainty is affecting consumer confidence and in turn small businesses. Twenty-six percent of business owners surveyed said poor sales are their main concern.
Wade doesn’t see anything inspiring more consumer confidence in the near future. “We don’t see anything on the horizon that would get small businesses to hire more and consumers to spend more,” she said.
At the same time, Sageworks has seen an increase in private company profit per employee with average profit per employee rising by 50 percent since 2009. The profit per employee has so far been $15,000 this year.
“Private companies have seen revenue growth between four to six percent,” said Libby Bierman, an analyst with Sageworks. “The companies are growing, but they’re not adding a lot of employees.”
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Exclusive: Small business backs Obama, not Democrats: poll
The Obama administration has hurt small businesses but the president still leads in backing among current 2012 election candidates, a new survey found.
Some 63 percent of small businesses said the administration’s policies had been damaging to small business, while only 16 percent indicated they had benefited, according to the poll by Manta, an online community that promotes small business. Some 67 percent were highly unsatisfied with government, with only 2 percent highly satisfied.
Meanwhile, the survey, which queried more than 2,300 small business owners online between August 12 and 29, showed President Obama as the candidate with 21 percent of support, followed by Texas Governor Rick Perry, a Republican, with 14 percent; Texas U.S. Representative Ron Paul, also a Republican, with 11 percent; and Republican former Massachusetts Governor Mitt Romney, with 9 percent.
“What’s happening now is that the individual plays as large a role as the party,” said Manta CEO Pamela Springer, adding that candidates “are trying to separate themselves even from their party, as there are so many independents out there. And the independent vote is very, very, very critical.”
Some 32 percent of owners polled in the Manta survey – the largest group – said none of the candidates supports small business, while smaller percentages backed Michele Bachmann, the U.S. Representative from Minnesota and former Alaska Governor Sarah Palin, both Republicans and Tea Party candidates.
The Republican Party still led in overall support by small businesses, with 23 percent backing, but the Democratic Party trailed by only 2 percentage points. The Tea Party had 17 percent of support, the poll said.
When asked what about policy priorities for politicians, 38 percent of those queried overwhelmingly indicated unemployment and job creation were their leading worry, while 17 percent said the budget deficit was of utmost concern.
90% of the small businesses contacted , which was 9 out of 10 selected from the DNC contributors list said they support Obama after being contacted by South Side Louie the 10th was on vacation…
Why the debt ceiling debate won’t stop America’s small businesses
– John Krubski is an entrepreneur and the architect of The Guardian Life Index: What Matters Most to America’s Small Business Owners. He is currently working on his next book, “Cracking the America Code: How to Get US Back on Track”. –
As recently as April of this year, the Amex Open Survey announced that “For the first time since 2006, growth has surpassed survival as the number one priority for entrepreneurs… Perhaps further evidence that economic recovery is reaching Main Street, more than one-third (35 percent) plan to hire, the highest level since the fall 2008 survey.”
Just a few short months later, the headlines were filled with gloom and doom about the impending, “unprecedented” default of U. S. debt, followed quickly by predictions of a “double-dip” recession.
The truth is that, for America’s small business owners, the debt issue is an old tune, perhaps with a few new lyrics. We began as a debtor nation – dependent on a creditor country across the sea – and printed a currency without much prospect of making good on either its value or the debt incurred. In fact, the “continental dollar” printed during the Revolutionary War was worth one penny by the end of the war. Thousands of tradesmen and farmers were literally left holding the empty bag of the American government’s promises. Eventually, our national finances straightened out. However, until that time, the many small businesses that funded the Revolutionary War had to rely on themselves to figure out a viable route to survival.
More than two hundred years later, it’s still the same story for America’s entrepreneurs and owners of small enterprises. After the market crash of 2008, a key “national problem” was the availability of credit. As money for loans became more available, the problem then became “qualifying for loans.” However, as many small business owners know, the only way to get money from banks is to prove in the application process that you don’t need it in the first place.
Now, with the downgrading of America’s credit rating, the concern is not just about the availability or the qualifications, but about the cost of borrowing. Throughout this very public national “crisis,” it is important to realize that credit has never been the typical small business owner’s major concern or strategy for making his or her business work. To the contrary, most small businesses that stand the test of time rely on their own resources, live within their means and effectively adapt to changing circumstances.
The first and second of these – relying on yourself and living within your means – are the key attributes that make it possible for a small business to survive infancy and continue through even the hardest times. If you start your business with the assumption that you aren’t going to get help from anyone else, your model automatically requires a commitment to living within your means. It becomes not only a mindset, but a powerful strategy for success.
It remains true that the banks do not lend unless you can show you don’t need the money. The difference today, however, is that they no longer advance funds against confirmed letter-of-credit. They seem to have forgotten how business is done and do not have a mindset to even try to figure out that they are the ones that are wrong. It’s too bad because their attitude influences politicians who also don’t know. It’s a good thing small business continues to exist.
The entrepreneur’s equivalent of “10,000 hours”
– Mark Suster is a former serial entrepreneur and a partner at Los Angeles-based GRP Partners. This article originally appeared on his blog “Both Sides of the Table”. The views expressed are his own. –
50 coffee meetings. It should stick in your head as a metaphor for networking. For getting outside of your comfort zone. For starting relationships today that won’t pay off for a year. It’s the entrepreneur’s equivalent of “10,000 hours.”
Anybody who has spent any time with me in person will be tired of this advice because I give it so frequently. It’s a piece of actionable advice that if you put into practice starting next week, will start paying dividends in the near future. There’s a direct correlation to your future success.
5 meetings/week = 250/year.
Imagine the human progress you could make with 250 short, relationship-focused meetings.
Here’s why it’s critical:
1. Recruiting. Are you looking for great engineers? Talented brand sales people? A smart young marketing exec? If you wait until you need to fill somebody in a roll, you’re losing valuable time as an entrepreneur. You should always have a steady stream of “friend of the firm” hanging around your company. You invite them to cocktail parties. You send them update emails. You don’t have a budget for them – not yet. But when you do, you’re ready to go.
7 business mistakes you ought to avoid
– Neil Patel is a serial entrepreneur who blogs about business at Quick Sprout and is the co-founder of KISSmetrics. This article originally appeared here. The views expressed are his own. –
After 10 years of being an entrepreneur, you probably think that I have everything figured out, right? Sadly, I don’t. Don’t get me wrong, to a large extent I know what I’m doing, but just like my first day as an entrepreneur I’m still making mistakes.
The mistakes aren’t the same rookie ones I’ve made before, but instead they are bigger mistakes. Here are some of the mistakes I’ve made over the last few years that you should avoid:
Business mistake No. 1: Don’t get too personal with your employees
I love helping my employees out. When they are happy, it makes me happy. But over time what you’ll realize is that the closer you get with your employees, the more likely they’ll push their problems onto you.
I don’t mind helping people out with their problems, but if they can’t learn to solve them by themselves, how will they ever grow as individuals? So instead of babying people 24/7 make sure you help them out a bit, but don’t be afraid to watch them fall. When they fall, they learn how to pick themselves back up, and hopefully prevent it from happening again.
Business mistake No. 2: Don’t be too generous
Great tips Neil, experience is absolutely the best teacher. I also like your aspect as an entrepreneur. Don’t be afraid to get wrong, all of us had been there when just starting. The most important is you need to learn from your mistakes and develop it to a better new you. Just like before when I’m starting to hire staff for my small business. I didn’t realize that I made I wrong decision, hiring staff from job sites like monster.com. Until I read some tips ( https://www.staff.com/blog/why-hiring-on ly-on-job-sites-could-be-a-mistake-for-y our-business/ )regarding mistakes when hiring staff. I found out that there are applicants who are good only on interviews but screw up on the actual work.
Silicon Valley recruiter on tech hiring frenzy: “Everyone’s desperate”
Robert Greene, the founder and CEO of Silicon Valley-based GreeneSearch Inc, specializes in recruiting hands-on talent for technology-focused companies, primarily startups. He provided his perspective on the current boom in technology hiring.
Q: How would you characterize the tech hiring market now? A: It’s very competitive right now. It’s been like that for a while; it’s probably heated up even more of late. You have the bigger companies – Groupon, Zynga, Google, LinkedIn, companies that have been proven and successful – and then you have all these startups. The supply doesn’t meet the demand.
Q: Is there an advantage to being a small company? A: The advantage they have over those (big) companies is that they can move really quickly. They’ll do everything in a day and make an offer and hope that person will accept right away before they get into the bigger companies. Those are their selling points. They have to move quickly, they have to be agile, have to have the compelling story, have to give equity, along with competitive salaries.
Q: Do you think we’re heading toward another tech bubble like we saw in 2000? A: I’ve been recruiting for seven years. I know back in the boom companies were offering cars and huge bonuses and stuff to attract engineers, and that’s not happening. I’m seeing real money – I’ve heard that Google is making huge counter offers, real money.
Q: How many offers are your top engineers getting? A: I had a guy out of Amazon in Seattle who had three offers. We’re seeing multiple offers. I had one instance where an offer was signed and Google countered and made him a huge offer back and he stayed at Google.
Q: Are you seeing companies looking less at top-tier schools? A: No, I’m not seeing them sacrifice the quality. Everyone’s desperate, trying to figure it out. I don’t know if there’s any simple solution other than move quickly, have a compelling story.
Q: How long do you think this boom will last? A: I hope it lasts for a while. Usually it goes in cycles. It’s been reported on more recently – but it’s been happening for a while. The news is on this now because of the LinkedIn IPO. Now there’s some real exits and big exits. We’re not going to have a time like we had in 2000 where companies didn’t have business plans or revenues and were going public. I’ve been hearing the B (bubble) word a lot – but I think it’s more realistic.
Exactly what are they looking for? More MBAs? Salesmen? Certainly not engineers.
Small business at a crossroads
– Jeff Stibel is the chairman and CEO of small business credit rating agency Dun & Bradstreet Credibility Corp. The views expressed are his own. –
What is a small business owner to make of the headlines?
Right now, leading indicators – like lending, hiring and optimism – paint a conflicting picture of the direction of the country’s small business sector. It’s no wonder we’d be confused. It seems one index rises, while another falls.
Take, for example, small business optimism. There’s no doubt we’ve come a long way from where we were at the bottom of the recession. But, the leading optimism index, calculated by the National Federation of Independent Business (NFIB), still looks like a seismometer in the days following an earthquake.
For the first two months of 2011, the numbers looked promising; optimism didn’t just rise slightly – it lunged forward. On a scale with 100 being the best and 0 being the worst, the index jumped from 92.6 in December 2010 to 94.5 by February this year. It’s a substantial gain from where we were at the bottom of the recession, when the NFIB reported numbers in the low 80s – 81.0 being the lowest.
But just when things looked up, numbers from March, April and May showed a drop – back more than 3 points – all but erasing recent gains and dropping to a level not seen since late last summer.
At the same time, lending statistics led us to believe something otherwise – and more encouraging – that small business health is rebounding. In fact, the Wall Street Journal recently reported that a Capital One survey showed 85 percent of small business owners felt they could access the loans they need – an increase of 15 percent from the year prior.
Small business seen emerging from “foxhole”
An improved economic outlook has many small business owners looking to grow now to gain a leg up on their competition.
Nearly half (47 percent) of the owners polled in a recent survey by office equipment maker Brother International Corp said they were willing to spend rather than stockpile cash reserves – an increase of 11 percent over 2010, when they were still facing recessionary pressures.
“They know they can’t stand pat, they can’t stay in the foxhole,” said John Wandishin, vice president of marketing for Brother. “When the clouds start moving and the sun starts coming out, how are they going to be positioned?”
At the same time, small business owners are experiencing stress levels relatively unchanged from a year ago, with more than half indicating their worry is higher than usual, according to the survey, which included 501 interviews.
“There is still uncertainty out there,” said Wandishin, noting troubling headlines about unrest in the Middle East and higher gas prices.
Keeping up with policy changes in Washington appears to be contributing to business owners’ anxiety. Forty percent of respondents said following trends in state and federal policy is more difficult than bringing in new customers, according to the survey, which was conducted in late January by Wakefield Research.
“When they get mixed signals or no signals, that has a negative impact,” Wandishin said.
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Small businesses cheer midterm results
– George A. Cloutier is the founder and CEO of American Management Services and the author of the bestselling book, “Profits Aren’t Everything, They’re the Only Thing”. The views expressed are his own. –
Last week’s midterm elections have provided an emotional boost for many small businesses, according to a survey conducted by American Management Services.
About 73 percent of small business owners said they felt more optimistic about the future of their company due to the Republican gains, in a survey of more than 300 small business owners in 25 states following the Congressional elections. The participating companies all employ at least 25 employees and are considered the job-drivers most likely to hire new workers.
Still despite their optimism, just 5 percent said they were considering hiring more workers based on the election results and 64 percent were not planning on adding additional workers at this time – debunking some claims that small business would step up hiring quickly with a new and clear political direction.
Twenty-six percent did indicate they might hire, but are waiting to see if business actually improves.
One St. Louis, Missouri-area business owner stated it succinctly: “I’m from the ‘Show Me’ state and until I see real new business orders, I’m not making a $50,000 bet on a new employee.”
The prospect of potentially lower taxes, enacted job credits and payroll tax holidays does not seem to be having significant effect. Another owner from Houston, Texas stated: “If there is a payroll tax holiday and I save only $5,000 to spend $30,000 to $50,000 per employee, what’s the point of having them sit around doing little or nothing?”
What exactly will Republicans in Congress do to help small businesses? I own one, and I see nothing in their plans, other than the typical three lines of rhetoric. When they do something positive that affects small business, will somebody let us small business owners know?
I think these are very good suggestions. However, good communication skills can be taught and there are extremely cost effective resources that can teach the entire staff to communicate more effectively.
Often, people with high levels of communication skills will not be priced for the small business person to hire. They will be picked up by larger companies with more attractive offers.
So, it is important for the small business owner to understand where cost effective resources are.
Yes, you can screen for skils and attitudes. But probably more important is for the small business owner to decide the type of culture they are operating from and the values and behaviors that support this.
The small business owner, for example, that is very command and control oriented when the rubber meets the road will be out of step with the idea of building cooperation, for example. And, again, these skills can also be taught when the small business ower is self reflective and willing to grow, too.
Dianne Crampton
corevalues.com