SHOW NOTES FROM PODCAST EPISODE 50.
These are the skills that are immensely valuable and very hard to teach. They’re the intangibles.
Communication – do they speak clearly and look you in the eye when they talk? Do they get their point across in an efficient, succinct and logical way? Miscommunications cost big money so this is critical.
Positive attitude – enthusiasm and an eagerness to be alive is impossible to teach but its contagious. You want people like this around your customers and your other employees. It makes everyone more productive. Having a grumpy front line is devastating for team morale and also the customer experience. Don’t put up with it.
Logical thinking – some people make bonehead decisions. Give them a pass the first time but you’ll notice really quickly when someone just can’t hack it on this front. Run some mock situations in the interview and see how they would solve problems. Make them think on their feet a bit and see what happens.
Emotional maturity – being able to keep a level head and make good decisions under pressure is always a huge bonus. Things get stressful on the job and you can’t have employees getting emotional and letting anger or stress influence their actions.
Quick learning – things are changing faster than ever. Tech is revolutionizing a lot of ways business is done. Your business is supple and ready to chang strategies at a moments notice. As a small business being able to change quickly is your main advantage. You need employees that fit with this core value.
It is really hard to tell if an employee has these things during an interview. You’ll learn a lot once they are working alongside you. And that brings me to my next observation.
Inexperienced employees can make great assets:
Okay so you have a simplified job description, more cushion on the profit and loss statement and applicants beginning to apply for your job. It’s time to make a hire.
I suggest that you think long and hard about whether an experience is REALLY required to do the job well.
I’m going to make some generalizations here. There are exceptions to this and every situation is different. But here are some things to consider and some of the reasons that I love hiring inexperienced people.
Inexperienced employees often COST LESS.
You can get a recent college graduate for $45k a year that is pumped up and eager to learn and make a name for him or herself. Compare that to the high skilled person with 20 years experience that might need $100k a year to even entertain the thought.
That is a BIG difference on the bottom line and leaves more money to hire more employees, invest in more marketing or buy more equipment that can help your business grow.
There will be a lot MORE qualified applicants if you don’t require experience.
If you accept inexperienced employees during the recruiting process you will have MORE APPLICANTS
If you limit your position to only those with experience you will have less applicants who apply and less applicants to choose from. If you can train people quickly you have the luxury of hiring based on soft skills and hiring the TYPE of person you want on your team.
Inexperienced employees are OPEN MINDED and happy to follow your lead.
Remember the systems you worked tirelessly to create? Remember how your employees are supposed to direct customer service to the customer service staff and do what you want them to do?
Experienced employees often already know the best way to operate. They already know how to talk to customers. They already know how to do the job.
A silly but great example is child care. My mother-in-law turned out to be the worst babysitter in the world and my business partner who had never previously held a baby turned out to be the best. How could that be?
My mother-in-law already knows everything about childcare. She raised 3 children in the 80s and they all turned out fine.
A lot has changed since the 80s. They found out a baby sleeping on its belly is dangerous. They found out water before the age of 4 months isn’t good. They found out blankets are dangerous in cribs. The list goes on and on. Modern research has proven a lot of things wrong that were common practice in the 80s.
My mother-in-law refused to listen to anything we said. She refused to respect our feeding schedule. She refused to avoid feeding water to the baby. She refused to be careful for allergies when introducing new foods because “I did all of this stuff when you were a baby and you turned out fine”.
Well things are different now and we have found a proven better way of doing things.
On the other hand my business partner took notes and did everything exactly as we requested down to the T. He implemented our system and did exactly what we asked him to do without question. It was a dream!
Inexperienced employees are ready and willing to listen and follow your lead. They don’t have habits that are either good or bad. You can mold and form the habits however you like and in the most efficient way possible.
Similar to the last point but slightly different. A fresh, unfiltered outlook is often great. The new biased perspective can often bring up new ways of thinking and shed new light on problems or inefficiencies. Encourage employees to present new solutions to you in an organized way (before implementation). Make it clear that freelancing on the job isn’t okay but recommendations are encouraged!
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Remember there are some areas where experience really matters. In a software development position I need experience. In an executive role I need experience. In in any role that I’m unfamiliar with myself I need experience. If I need someone to come in with the goal of implementing changes or solving problems that I can’t solve I need experience.
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Let’s touch on compensation.
One of the advantages of charging more for your services is that you can pay your employees well and attract great talent in most positions. Paying your laborers $3 per hour above market rate does a lot for attracting reliable and clean cut folks for example.
You will find that a lot of your employees (especially the laborers) are happy to just show up to work with the goal of getting through the day and doing as little work as possible. That is fine. These employees should be paid based on the value they bring. They might leave when they don’t get raises but they are easily replaceable.
But a select few individuals will start to shine. They’ll get good at solving problems. They’ll be an extension of you. You’ll be able to trust them to lead others and you’ll be able to give them more autonomy. They’ll help you grow and innovate. They’ll help you make the company and its systems better. They’ll challenge you as an owner and you will be able to learn from them. They’ll teach and solve problems for other employees and take stress away from you.
When someone adds serious value be ready to pay them serious money. You’ll lose these type of employees quickly if you are stingy with your compensation structure. Be ready to get out of your comfort zone here. Consider tying their pay to performance to limit your risk and increase the upside for them if they succeed.
Sometimes great employees will outgrow your company. At the end of the day it is your job as a boss to make your employees better. When they are ready to add even more value to an even larger company with higher margin products it might be time to send them off to do bigger and better things. Sending an employee off to take a bigger and better role somewhere is a very rewarding experience as a business owner.
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A lot of people really push back on the thought of hiring inexperienced employees in their organization. First of all this isn’t a steadfast rule. Just something I think you should consider doing and something that can give you an advantage if you do it well.
Just a clarification – this system works best when you are hiring early employees and building your team. This would be very different if you trying to tell someone how to hire their next branch manager or someone to help you grow and overcome challenges.
Hiring your first employee is very uncomfortable. It’s scary. The anxiety in fact can be so crippling that many many people can’t take the leap from freelancer to entrepreneur because they just can’t do it.
So what is the goal of hiring your first employee? TO MINIMIZE RISK.
When you are hiring your first employee you need someone willing to follow your lead and follow your process. You need someone who will listen to you and will do as you tell them to do at least initially.
It is VERY RISKY to hire someone and let them do their own thing with little structure. You do not know the person. It’s as simple as that. You are trusting your business in the hands of someone that you do not know. You are trusting them to take care of your customers. To operate your equipment. This is a big deal.
This is why so many people gravitate towards hiring and partnering with their friends. To try to mitigate risk of the unknown. I have done this and it can be great but more often than not it causes problems. Thats why you need a system and a stranger willing to follow that system.
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When you are hiring your first handful of employees your goal shouldn’t be to hire another entrepreneur or top level manager.
You might also be thinking that you would be really upset to be hired by a boss who has this mentality. Of course you would. You are an entrepreneur. You don’t want to be told what to do. I get that.
You, as the business owner, are the manager. You don’t need more managers! You need people to follow your lead!
There are a select few people in my company that have earned the right of not being told what to do. They don’t get that right when they first get hired. When they first get hired they are expected to follow the process that I’ve worked so hard to build. Its the only way to keep things organized and deliver a consistent product to my customers.
That isn’t to say I don’t listen to my employees and verbally encourage them to bring ideas to me on how to improve. When they call me with questions I challenge them and encourage them to think through it and solve the problem. I don’t just tell them what to do and expect them to be quite.
The people who earn the trust and prove they can MAKE GOOD DECISIONS get the trust and get the autonomy.
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Interviewing well is a skill and I’ve found that its not directly correlated with drive.
Just like you can’t learn much about someone on a first date its really hard to learn a lot of valuable information in a job interview. Especially your first few early interviews when you aren’t sure what you are doing. You really get to know someone when something stressful happens on the job. When you watch them solve real problems. Don’t get me wrong you can weed out 90% of the people during the interview but it isn’t as simple as saying “if you do a better job hiring you can find all these traits in experienced people”.
In my experience, not always of course, unmotivated people get really really good at telling people what they want to hear all the time to make people think they are excited, driven and getting things done. They put a lot of energy into this. They calculate what they are going to say when you call. What they are going to say at the next team meeting.
It’s a sad truth but most employees have 1 main goal – to do as little work as humanly possible and still get paid on Friday. In my time as an owner/operator I’ve had only a handful of employees come to me eager and willing to take stress and work away from me and put it on themselves.
Finding motivated and driven employees isn’t impossible but its hard to hire and interview for it. You have to see it for yourself. This is the main reason why I love hiring inexperienced people and developing and promoting my own talent.
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You might say “how am I going to challenge and empower great people with this kind of rigid structure? I would argue all day that challenging and empowering and your employees can be done with structure and processes. Your company has to have structure to succeed. You will have an absolute mess on your hands if everyone is out there doing what they want to be doing in the way they want to be doing it.
Employees want structure. Even high level employees want structure and a way of doing things. You need to develop a framework and set of rules employees can use to solve problems. If you don’t build the framework and set the rules every problem will become your problem and will require a quick decision and work on your part.
Motivating and making your employees feel valued is about how you treat them on a day to day basis. Do you listen to them? Do you treat them with respect? Do you encourage them to speak up when they hear something or see something they think they can improve upon?
That is the environment that employees love at any company. It’s not about the kegerator and ping pong tables.
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Another concern you might have: Yes, but smart inexperienced people figure out real fast what they’re worth and jump ship faster than you can spin your head. What about that?
All employees, experienced or not, jump ship if you pay them less than the value they bring.Employees just just ship often in general. That is part of running a business. Processes and structure allow you to deal with this and build a company that can survive it.
You have to be willing to pay good people more than you are comfortable doing. I pay employees based on the value they bring my business. If they kick ass and add a lot of value I pay them a lot of money.
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Hire fast and fire fast.
We’ve all heard the saying “Hire slow and fire fast”. I like that reasoning for high level employees making $50k+ per year. I also like that reasoning for high skilled employees that require extensive training or investment. There are a lot of costs associated with hiring a full time employee at that level. Turnover is more expensive.
But for $15 per hour help in your service business the best way to figure out how much value they can bring to the table is to give them a shot and watch them work. In many cases you’re investing the cost of a background check and a few hours of training. Don’t waste your time meticulously interviewing and testing personality traits, emotional maturity and decision making skills.
This does not mean you should skip the interview or do a shoddy job at it. Do a phone interview first to weed out 3/4 the candidates. Bring the rest in for an in-person interview. Do a structured interview and ask them some questions that require them to think on their feet and give you a good feel for their soft skills. You want people who can exude eager professionalism and be genuinely excited to help deliver a quality service to your customers.
Make it clear during the interview process that there will be an early probationary period where employment is not secure. They can leave at any time and they can be let go at any time. Tell them what you are looking for in an employee.
Minimize the risk by having them work alongside you or your best crew leader. This way the service quality won’t suffer. Keep them from handling cash so they can’t steal from you. Make their first few weeks very structured so you don’t have to worry about them slacking off.
Fire quickly. As soon as it’s clear someone is unmotivated, untrustworthy or a poor communicator let them go. As soon as they stand you up for a work shift let them go. As soon as someone fudges hours let them go.
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Overall hiring employees is complex. There is no single guiding rulebook to doing this stuff right. It’s a lot of making the best hypothesis you can with the information you have available. Don’t get emotional about it. It’s about logic and doing whats best for the future of your business. Take the things in this article into consideration and don’t be afraid to attract and hire inexperienced employees but keep an open mind. Do what works for you.
This isn’t easy stuff. It takes setting aside time (that you likely don’t have) to recruit, interview, hire and train. There will be turnover. There will be headaches. There will be questions. There will be mistakes. But it’s the only way to build a business thats primed for growth in a stress free free way.