Most companies firefight when it comes to recruitment, either because someone has left or the influx in sales had led to an increased workload. Either way, without planning and time to recruit, the firefight recruitment process is flawed and will cost your business, lots.
Smart entrepreneurs recognise this and instead of continually firefighting they have looked for the reason why there is a need for recruitment.
When you are replacing staff, it is important to understand why people leave, particularly if your staff turnover is high, either for a specific job role, or generally within your business. You should understand that team performance is directly linked to the people within the team and team performance changes most when new members come in or old members leave.
When we are engaged to provide an analysis of team performance, we start with an in-depth analysis of the current team, focussing on looking for correlations between length of service, compensation, and performance.
Unfortunately, a lot of business owners focus on the source of the problem, the lack of people resource and immediately solve that problem by hiring a replacement.
However, unless you understand why the last person left, then you will soon find that the next hire leaves, usually for the same reasons.
In our work, the primary reason for staff leavers comes down to one aspect, a person.
This person is usually the business owner or in some larger businesses, the staff member’s direct manager. However, in nearly all our work, this fact is seldom recognised, let alone given air time to resolve.
The main problem usually arises when it comes to reward and performance – when an employee wants more as they see their performance is greater, but the business owner or line manager sees their performance differently.
In our work, we usually find that aligning reward to performance circumvents these discussions, when the recognition is clear on both parts. The key here is to start the employee relationship on this foot, from the beginning.
Set clear goals, attainable expectations and then monitor progress against these, regularly.
We are advocates in raising the minimum rewards for those early in their careers to make them feel wanted, when results and performance allows. Then we also advise to reward those with longer service, again subject to performance reviews and meeting their targets.
They key is always to align reward to performance but whilst doing so ensuring that the rewards are achievable.
It is no use offering someone twice their salary for twice the amount of work – there are simply not enough hours in a day for most people to work that long.
Instead, we work with entrepreneurs to formulise a strategic HR function and encourage them to use their staff to drive value rather than just responding passively to the routine needs of businesses.
This is how we help to transform many companies, by making them recognise that their people are their biggest asset.
The key to this is for the entrepreneur to recognise that they need to wear yet another hat, as the talent leader.
The talent leader
When you wear your Talent Leader hat, you should study key metrics to drive performance and value from your staff. These metrics should capture year-to-year skills development, capability gaps, employee engagement, and attrition rates.
You should always be disconnected from the day-to-day HR functions, holiday requests, disciplinary hearings, recruitment adverts etc. Even as a small company such tasks can be outsourced effectively.
As with any business function, it needs to be results based and your role as talent leader is the same.
As an entrepreneur you will know, or should know that you cannot succeed without being able to deliver analytically driven business insights to drive business decisions. HR is the same, you need data about performance before any decisions can be made, hence you should have a system that collects this data, systematically.
This is a step change in mind-set for most entrepreneurs; many entrepreneurs are resourceful and smart sales leaders but very few possess a data and analytical mind-set or the appropriate problem-solving tool kit.
There is a real prize for those that can use data analytics. Not in using data to measure a single metric, such as sales or profit, absentee rates or length of service.
Valuable data analysis links together several of these and other metrics and looks for clues, insights, that can drive business performance; business profit.
When you crack the problem and find a solution, only then can it drive your business performance. So if your business is based on your people, then reward them accordingly.