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How to hire the right people for your business

3-minute read

Hiring the right people is crucial for the success of your business and that's why entrepreneurs should have a formal hiring process in place when looking for new staff.

By putting time and work into finding the right people, you will improve your chances of hiring the best performers and avoiding costly and painful mistakes.

Many entrepreneurs have good instincts about whether someone is right or not for the job. But you shouldn't rely just on gut feelings. The recruitment decision should be founded on solid, objective factors.

Here are 7 steps to avoid bad hiring decisions.

1. Assess your company's culture

To recruit the best people you need to know what your company needs. What is its mission? What are its values? What type of individuals fit in? What mindset are you looking for?

Look at potential candidates with this bigger picture in mind and see how they rate.

2. Create detailed job descriptions

If you don't have a clear idea of what employees are supposed to be doing, you will have a hard time hiring the right person. Create job descriptions for each position in the company, reflecting the responsibilities, level of skills and experience required.

Make sure to clearly communicate the job requirements to candidates during interviews.

3. Prepare well structured interviews

Create an evaluation scorecard that can be used to grade and compare the performance of candidates on a series of criteria.

When it's time to interview, it's a good idea to have more than one conversation with serious contenders and include other people in the process such as an HR person and the manager to whom the new employee will report.

Use behavior-based interviewing techniques. These involve inviting candidates to describe how they have handled specific challenges in previous positions. Past performance is one of the best predictors of future performance. You can also present them with a scenario involving a difficult situation and ask them how they would handle it.

4. Test

Another important element in the hiring process should be to require candidates to complete an assignment that requires the skills for which the person is being hired. Why not ask the candidate to drive a truck if they will have to do that or give a sales presentation if that's in their job description?

5. Look beyond the CV

The best qualified candidates on paper may not be the best fit for the job. Ask about the candidates' interests, ambitions and priorities. If working for a big company with a big salary is their dream, they might have a hard time working for a small firm.

6. Ask for references

It's always safer to take the time to verify references. Although fewer businesses provide references about previous employees, reference checks remain one of the best sources of information about candidates. Also consider doing a bit of independent research by seeking out people who know or have worked with the candidate in the past.

7. Bring them onboard

Once you have recruited the best, you need their full buy-in. Research indicates the retention rate of new employees can be increased by as much as 40% with a solid orientation program. Besides patient training, you might want to consider pairing the new employee with a more experienced staffer who can mentor and coach the person during his or her early days in the workplace.

Finally, keep in mind two simple principles—job-relatedness and consistency. Make sure you document each step of the process and have solid, objective, evidenced-based reasons for deciding to hire someone or not.

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