If you’ve ever made a hiring mistake—and who hasn’t?—you know the consequences can be painful. Many of them—including the estimate that a bad fit for even the lowest paid job will cost an employer $25,000—are presented in a National Business Research Institute infographic. And a widely cited statistic attributed to the U.S. Department of Labor, which has long offered employers guidance on good hiring practices, puts the cost of a bad hire at 30 percent of the employee’s potential annual salary.
Of course, the smaller your business, the tougher those costs are to absorb. And those estimates don’t even account for damage to employee morale, community relations, and customer satisfaction.
In a LinkedIn blog post, HootSuite CEO Ryan Holmes recently offered his tips for avoiding making a bad hire. And Zappos CEO Tony Hsieh once revealed to Fast Company that one of his strategies for weeding out misfits and “people who are just there for the paycheck” is to offer a $2,000 bonus to anyone who’d like to quit after their first week of training.
For advice on attracting the right talent from the get-go, YahooSmallBusiness checked in with HR expert Michelle Benjamin. Benjamin, a small business owner herself, is the CEO and founder of Benjamin Enterprises, an industrial staffing specialist, and Talent Ready, a workforce development company. Here are her tips:
1. Develop a great company culture. Work is a job with expected hours and outcomes, but it doesn’t have to be something employees dread, Benjamin says. “If you don’t already have a thriving, positive company culture, develop one.” She suggests starting small—by changing your environment with perks like free snacks in the break room, or Friday office social sessions, or by freshening up your space with artwork or a coat of paint. But Yahoo Small Business’s blogs offer lots of advice about what company culture is, why it’s important, how to know when you need to improve your culture, how to create a great small workspace, and even how to develop a good culture when you have no office.
2. Have a great story. Zappos’s Tony Hsieh recently said he believes that “a great brand is a story that never stops evolving.” Benjamin recommends defining your story and setting yourself apart from the competition. “Develop it, write it, and communicate it,” she says. “Employees want to be a part of something bigger than they are. Tell them how they can achieve their goals by working in your company.”
3. Get Social. Face it: Job seekers use social media and their connections to find career opportunities. Having a social media presence that is appropriate for your business will help you build a thriving online community of fans and followers, which can multiply your reach exponentially, Benjamin says.
4. Invest in Managers. “When an employee voluntarily leaves a position, it is most likely due to their manager and not the company as a whole,” says Benjamin. That’s why she recommends investing in an ongoing program to develop and train your managers to be effective, and removing inept ones. “Top talent is more likely to see a bad manager coming from a mile away. They won’t stick around or be drawn to a company with poor management,” she says.
5. Incent your current employees. Benjamin points out what many HR departments seem to overlook: “Your current workforce is one of the best ways to attract other employees. They have firsthand knowledge of your company, benefits, perks, and other advantages. They also know other top performers through their personal and social networks. Why not reward them for bringing in new employees?” She recommends creating an incentive plan for recommending candidates for open positions. Base rewards upon the candidate interviewing, being hired, or being in position for a certain number of months.
“The competition for top performers is only going to increase in the future,” Benjamin says. “Small businesses need to set themselves apart from the rest of the pack to attract, hire and retain top performers.”