Payroll is often the biggest expense for a family business and the cost of turnover is high. Employees are expensive to replace!
It can cost one to two times an employee’s annual salary to replace them. And it can take 6-9 months to recover from the disruption.
The best way to avoid this disruption and expense is to hire the right person.
To do that, you need to implement a solid hiring and onboarding process based on best practices.
Whether you’re looking for an executive such as a CFO, or a middle manager, or a front-line worker – this is the process that we recommend to our family business clients.
1. Define the Job Requirements
Determine the specific skills, qualifications, and experience needed for the role.
What behavior characteristics and qualities would a successful candidate possess?
2. Advertise the Job
Create a job description highlighting the responsibilities, qualifications, and benefits of the position.
Remember that the posting is an advertisement: make it easy to understand and use appealing words. Why is your company a great place to work?
Post the job on various platforms, such as job boards, company websites, social media, and professional networking sites.
3. Consider Working with a Recruiter
For the more difficult hires, especially higher-level executives or specialized professionals, consider engaging a recruiter.
While it may seem like a more expensive route, the right recruiter can actually save you time and money by finding someone who is the perfect fit for your organization. Replacing a wrong hire is far more expensive.
4. Screen the Resumes
Review the received resumes and shortlist candidates based on their relevant experience, skills, and qualifications.
Look for individuals that display the characteristics you are looking for.
5. Conduct Initial Phone Interviews
Conduct initial phone interviews with the shortlisted candidates to further assess their qualifications, communication skills, motivation, and cultural fit.
This helps narrow down the pool of candidates for in-person interviews.
6. Conduct In-Person Interviews
Invite the selected candidates for face-to-face interviews. Prepare a structured interview process.
Consider creating an interview panel. We tend to gravitate toward people who are just like us, so having a panel with a variety of different people on it can be beneficial to building a diverse team.
Choose people who will challenge your thought process and bring a different perspective.
7. Use Behavioral and Situational Interview Questions
These can be soooooo great for seeing how their mind works. Here are 2 examples of how you can structure the questions:
“Our organization places a very high emphasis on our core value of being adaptable to change. Can you describe any times where you have had to lead a change initiative or be a part of one in an organization and what that was like?”
“Feedback can be such a critical part of improvement. What constructive feedback have you received in the past and how do you like to receive feedback?”
For some positions (such as sales) consider including a role-play or case study to assess their practical skills.
8. Administer Assessments
Assessments can provide insight into a potential candidate’s strengths and weaknesses and help you evaluate their aptitude, skills, and personality traits.
In this way, assessments can help you make a more informed decision about the candidate’s suitability for the role.
9. Check Their References
Contact the provided references to gather insights into the candidate’s work ethic, professionalism, and performance.
Check with companies or individuals not on the list. This step helps verify the candidate’s claims and ensures they would be a good fit for the organization.
10. Evaluate and Decide
Evaluate all the gathered information, including resumes, interviews, assessments, and references. Compare the candidates against the defined job requirements and select the most suitable candidate for the role.
I like to use a 25/25/25/25 approach:
- 25% is a behavioral assessment and how it aligns with the role
- 25% is resume/experience
- 25% is the interview
- 25% is your intuition
11. Extend an Offer and Negotiate
Extend an offer to the chosen candidate, including details about compensation, benefits, start date, and any other relevant information.
Be prepared for negotiation and consider regional market standards to ensure a fair offer.
12. Make the Most of Onboarding
Effective onboarding is critical.
Once the candidate accepts the offer, initiate the onboarding process. Make it as structured as possible.
Provide necessary training, orientation about the company, products, sales processes, and introduce them to the team and their responsibilities. Establish the first 90 days expectations and goals.
Give your new hire an opportunity to give feedback. Remember this is a fresh set of eyes in the business and if you allow yourself to be open to it, the new perspective can be a very valuable learning experience for you as a business owner.
Reducing turnover costs and ensuring a successful hiring process is crucial for every family business.
Implementing a solid hiring and onboarding process based on best practices is the key.
Whether you’re hiring an executive, a manager, or a frontline worker, following these 12 steps can greatly enhance your chances of finding the right candidate.
If you’d like some support optimizing your hiring strategy, book a call with one of our experienced family business advisors. We can guide you through each step, from defining job requirements to conducting assessments and making the most of onboarding.