Small business owners are still struggling to add workers. One-quarter of owners say labor quality was their top concern in December, according to the monthly job report by the National Federation of Independent Business (NFIB). Thirteen percent said labor costs were their top problem, up three points from November and a 48-year record high.
The labor shortage is holding back the small business economy, according to Bill Dukelberg, the NFIB’s chief economist. Owners are trying to keep their current employees and attract new ones for open positions, and a record number are raising pay in order to do both. Forty-eight percent reported increasing compensation, up four points from November and a 48-year record high. Thirty-two percent of owners plan to raise compensation in the next three months, unchanged from November’s high figure.
Forty-nine percent of small business owners reported job openings they were not able to fill in the current period.
Would you like to hire great people? According to Jay Goltz, author of The Street Smart Entrepreneur, you may be part of the problem. Entrepreneurs are often the worst people in any company to be doing the hiring for three reasons, he suggested.
One, entrepreneurs have an affinity for people – they like people. However, in the hiring process, they need some healthy skepticism about people.
Two, entrepreneurs are so ‘into’ their company and talking about it that they have trouble being quiet and listening to candidates.
Finally, Goltz says entrepreneurs really don’t have the time to be recruiting and reviewing job candidates: they have a lot more important tasks they should be doing.
There are techniques and technologies that small businesses can use to make the processes of finding and analyzing job candidates more data-driven.
However, the one sure way to do a lousy job at hiring employees is to have no method at all – flying by the seat of your pants.
Depending on what kind of job you’re trying to fill, you may be able to use social media to find candidates as well as LinkedIn and Facebook. Interview promising candidates several times; use a ‘scorecard’ and rank them based on the specific mission, outcomes and skills associated with the job.
Call the references – all of them. You should be asking five basic questions:
In what context did you work with the person?
What were the person’s strengths?
What were the person’s biggest areas of improvement?
How would you rate his/her overall performance in that job on a 1-10 scale? What about his or her performance causes you to give that rating?
The person mentioned that he/she struggled with ____ in that job. Can you tell me more about that?
Consider hiring the person as a probationary employee for one month. If they work out after one month, offer them a permanent job.
Don’t base hiring decisions on gut feel, warns Ann Rhoades, founder of PeopleInk, an HR consulting firm based in Albuquerque. The most important first step is figuring out the attitude you are looking for, not just the skill set, she said. “You need to figure out what behaviors you want.” And if you don’t know what those are, you and your management team may need to have a conversation about your company’s brand and culture.
Goltz identified key qualities to look for in interviews are honesty and passion to do a good job. The interviewer’s job is to ask skeptical follow-up questions to flush out the BS.
