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Why some small businesses flourish and others fail to get off the ground


Photo: Thinkstock

Photo: Thinkstock

Photo: Thinkstock

DOUG and Polly White have seen small businesses use all kinds of questionable hiring practices. There was the entrepreneur who hired anyone looking for work. Then there was the woman who hired and fired her sister twice. The list goes on.

In their book, 'Let Go to Grow: Why Some Businesses Thrive and Others Fail to Reach Their Potential', the Whites found from their business consulting that entrepreneurs often don't know how to hire employees.

"No one is born knowing how to hire and manage people," said Polly. "You come into this with no clue how to hire and manage people. So entrepreneurs often end up hiring friends and family.

"While your friends and family may be right for a job in your organisation it's not always the right way to go."

The Whites point to the five steps businesses should

follow in order to hire the right people for the job.

1. Know what you need

Hire someone based on their behaviour and cognitive capabilities.

"By behaviour we mean work ethic and turning up on time," said Doug.

"At the entry level you can teach them how to make a widget. But you're unlikely to teach someone a great work ethic.

"Value things that have to do with communications skills, work ethic and a liking for being around other people," said Polly. "These kind of things are not something you're going to teach to somebody else. It's something that's inherent in the person by the time they get to you."

2. Understand what you have to offer

"One of the things we saw with small business people is that they're often competing with the big guys in town," said Doug.

"What they find is when it comes to salary and benefits they can't compete.

"So they have to identify what they offer that makes them an attractive place to work."

3. Cast a wide net with a narrow focus

"We find many small businesses don't consider a wide range of people -- they consider people, friends and family," said Doug.

"We think it's less likely you're going to find the optimal candidate if you only consider a small handful of folks.

"Small businesses are often reluctant to post job ads on job search sites because they're afraid of being inundated with resumes.

"But if you know what you're looking for you can narrow the resumes to a few which you want to pay particular attention to," said Doug.

4. Leverage multiple methods and opinions

The Whites have seen entrepreneurs make hiring mistakes by doing all the hiring themselves.

"What we find is if you bring other people into the process and get their input often other people will see things that you didn't see, maybe hear the same words but hear them in a different way and have a different perspective," said Doug.

"So you get a much more accurate read if you include other people."

5. Trust, but verify

"It's absolutely amazing to us the amount of embezzlement and theft that goes on in companies," said Doug.

"You need to do background checks, you need to check into an employee's past. You need to do reference checks.

"We find most employees are clever enough at finding someone to say kind things about them. So we talk about getting to the second level.

"When you're interviewing that reference," continued Polly. "It's okay to say: 'So who else worked closely with Fred at your office?'

"If you get a name, ask to be transferred to them or get a phone number and see if you can get to someone else that wasn't on Fred's list."

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