Choosing the right team is crucial for business success
Last fall, I picked my basketball team for the upcoming year. This isn’t a sports fantasy team; it was a high school basketball team with 12 real people. The stakes were high.
While I am always playing to win, I may or may not pick what seem to be the most talented players because team dynamics are of far greater importance than individual performance.
If I pick the wrong players, I could have five months of headaches and dysfunction. Even if we win, the stress and drama of leading the team with the wrong players is not worth the effort.
So how does this relate to business?
Every day worldwide, business leaders like you are picking their teams. You’re hiring and firing people. Others are leaving your organizations, retiring and moving on, and you need to fill the positions.
 Photo by Razvan Chisu |
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The stakes are high. Who you bring onto our team can change the dynamics. These new hires can bring drama, dysfunction and distress. Or, if we hire correctly, they can help take our company to another level of success.
So, what’s the actual cost of making a poor hire?
According to a survey by Careerbuilder.com, 75 percent of employers said that they’ve hired the wrong person at one time or another. Employers surveyed pegged the actual cost of a bad hire at $17,000 on average. Other estimates suggest that the actual cost of any new hire is 60 percent of the first-year wages, which is no small amount for a small business owner.
Depending on the position, hiring the wrong person can be very costly for small businesses. Over the years, I’ve lost hundreds of thousands of dollars due to hiring mistakes or keeping unsuitable employees for too long.
There’s a productivity loss each time a new person joins the team. It takes months, or even up to a year, to get a new hire fully up to speed. The time and energy spent on recruiting, hiring, training, and onboarding is substantial. A three-year study of over 300 companies by LeadershipIQ, involving more than 20,000 employees, found that 46 percent of new hires don’t work out.
You probably think that many companies hire people who don’t have the right skill set, so they have to fire them. The truth is that this only accounts for 11 percent of the failures. The reasons so many people don’t work out are:
- 26 percent of new hires fail because they aren’t coachable, they think they have all the answers and aren’t ready to look at things from the company perspective;
- 23 percent fail because they can’t properly manage their emotions or deal with others on the team;
- 17 percent don’t work out because they aren’t motivated;
- 15 percent are unsuccessful because they have the wrong temperament for the job.
So what do we have to do to get the right team?
Have clarity on what the position is
We often create jobs without a clear understanding of what that position entails and the value we need the position to generate.
Having an empty position in our company is a great time to reconsider how the business is working and what type of person we need to fill that spot. Once we have this understanding and have defined how much we can afford to pay, we need to advertise it in such a way that we create interest for our ideal employee.
Go with your gut
Unless you have a track record of picking the wrong people, you’ll have a good feeling about whether someone is right, or not.
Once, when hiring a new employee for my business, my manager and I interviewed several candidates. While some were highly qualified, none seemed perfect. One candidate even came across as downright dangerous.
Our last interview was with a candidate who nailed it. When he left, we instinctively knew he was the right person. He had some technical qualifications, but more importantly, he had a great attitude. After checking his references, we hired him, and he turned out to be fabulous.
Have criteria to measure them
Often, when my clients ask me how to hire people for their companies, I take them back to their core values. What are the things that are really important to your company?
One company’s core values might be honesty, community, integrity, fun, and drive. If those are important, bring them into the interview and pick the right person based on how they fit with those values.
Use your probation period properly
When hiring employees, we typically set a probation period to evaluate their fit. However, many companies fail to use this time effectively to ensure they’ve made the right decision.
Onboarding, training, and reviewing the employee to confirm our choice are essential. Often, our new employees don’t work out because we fail to support them through this period properly and ensure that they settle in and fit into the culture.
So I was careful to pick my basketball team carefully, and so should you. The stakes are high: you need to look for attitude over aptitude.
Dave Fuller is a Commercial and Business Realtor, an award-winning business coach, and business author.
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