Look at why you want to hire
someone-and what job they'll do.
One would like to think that each time an employee
is hired by a firm, he or she would turn out to be a terrific addition
to the staff and a real benefit to the firm's bottom line. The reality
is seldom quite so rosy. Some of the reasons for this might be such
things as the lack of specific techniques for hiring personnel, the
lack of an available pool of high-quality prospects and/or the lack of
appropriate and necessary training to bring out the full potential of
that new hire.
Given the cost of bringing on a new person, it can become quite expensive and inefficient to choose repeatedly the wrong person for the job. Thus, putting some rules in place that control the hiring decision might produce results that are more satisfactory and save the firm a substantial amount of money. Here are six points to consider.
Why Are You Hiring Them?
The reason for hiring is at least as important as whom you are hiring. In discussions with firms around the country, we find that sometimes hiring decisions are based not on the needs of the firm but on the perception of the individual under consideration. In this case, it may be that a perceived high-quality candidate approaches the firm or becomes known to the firm through a referral source. The firm then may decide to hire this person as a target of opportunity rather than filling a particular need of the financial advisory practice. Often, this kind of hiring decision leads to an unsatisfactory relationship or even termination of the individual involved.
To avoid this situation, identifying the specific needs of the firm that could be filled by an employee is critical. Often this is done through the development of position descriptions or position outlines. Not the five- or six-line type of description, but a full length, point-by-point description of what this person is expected to do. The advantage of developing these position descriptions is twofold: First, you set specific criteria by which to determine who (among your available candidates) is best equipped to handle the job. Second, you have a list of objective criteria after the hire by which to evaluate the performance of that employee.
What Is Your Hiring Methodology?
Some firms use executive search firms or other types of recruiters to find the right person. The costs are generally higher with this method, but some argue that if it saves the cost of multiple hires or hiring the wrong person, it is worth it. Many prospective employees, these days, are using the Internet to find jobs. Monster.com, CareerBuilder.com, HotJobs.com, Jobs.com and many, many others are viewed as easier and more accessible by younger prospective employees than perusing the newspaper ads. However, some firms have turned their attention to older prospective employees, who could be more stable workers and less likely to bolt at the first sign of higher pay elsewhere. Other firms use temporary employment agencies (where appropriate) and offer permanent employment to the temporary employee who demonstrates the capacity to excel at the job. This also provides a natural barrier to potential unemployment claims from a bad hire subsequently terminated with or without cause.
Many firms prefer to hire from within. These firms would hire into receptionist or similar positions and then promote those who show the greatest promise. Replacing employees at the lowest end of the wage scale can limit the financial exposure of the firm. In addition, if these positions are hired part time leading to full time, savings in company-provided benefits can be realized as well.
If you are looking to fill financial advisor or similar positions within your firm, you may want to look at a new service offered by the Financial Planning Association. As of May 1, 2006, the FPA launched the FPA Career Center (www.FPACareerCenter.org), which is a new online resource designed to help firms recruit new employees from the ranks of their membership.
What Is Your Interview Process?
Do you have an objective process for interviewing each candidate and selecting someone based on a comparison of responses to a standard set of questions, their resumes, their appearance at the interview and their communication skills? There are four essential components to the selection process: 1) using accurate job descriptions, 2) evaluating resumes, 3) asking effective questions, and 4) numerically scoring candidate responses and other factors. If you do all of these consistently with all candidates, you stand the best chance of selecting the right person.
What Is The Form Of Employment?
There have been some recent cases in which staff paid as an independent contractor were determined by the IRS to be employees (and not independent contractors) and tax assessments were levied against the firm for all nonpaid Federal employment taxes, Federal withholding payments, Social Security and Medicare withholding for that individual, along with substantial penalties. If you are considering hiring someone and have thought about using the independent contractor status as a way to avoid paying Social Security and Medicare (or other benefits such as health insurance, pension, retirement accounts, etc.), you may wish to file a form SS-8 with the IRS first. This form is used to determine the status of the worker in advance for such things as Federal employment taxes and Income Tax Withholding. Moreover, it could save you from a major financial headache later on. The form can be downloaded from the IRS.gov Web site(http://www.irs.ustreas.gov/pub/irs-pdf/fss8.pdf)
Yet another technique is to hire two people for the same position, but both hired as part time under a job-sharing arrangement. This technique involves sharing job duties, pay and benefits (shared on a prorated basis). There may not be cost savings to the employer, but other benefits can be realized. The employer's costs would not necessarily be higher, and there would be two qualified people to do the job. In the event one is ill or otherwise unable to perform the job at any given time, it may be possible to increase the hours of the other to fill the need.
However, the employees involved may not always perceive job sharing as an advantage. One common complaint is that the employee may assume that the employer is not serious about advancing the career of either employee in the job-sharing arrangement, or that such an arrangement might take an employee out of the running for promotions or raises. Overcoming these issues, the flexibility of job sharing should be an advantage to the firm.
How Will You Train New Workers?
What tools are you willing to provide this person to ensure their success in your firm? Often, firms provide little in the way of formal training to new staff. A common training technique is to pair a new employee with an existing employee for a "few days" to give them a chance to learn the ropes. Then it is up to that new person to keep asking questions and researching things to find answers when needed. If that new employee is sufficiently self-motivated, they may survive this type of training. Having objective lists of training goals, creating procedures manuals and possibly outsourcing employee training could save the firm countless hours of wasted time and nonproductive employee hours.
What Is The Work Environment?
If your firm is rife with employees sniping at one another (or, worse at you), the mentoring of that new employee is likely to be less than satisfactory. Promoting a culture of excellence in the firm, where employees rely on and look up to other employees, is the best and most efficient of all possible circumstances in which to inject that new employee. This could involve some tough decisions, such as weeding out employees who are tainting the culture of the firm.
Using these six points consistently should result in a more efficient process for locating and hiring personnel for your firm. And, it could bring you closer to hiring the perfect employee.
David Lawrence is a practice efficiency consultant and is president of David Lawrence and Associates, a practice-consulting firm based in Lutz, Fla. (www.efficientpractice.com). David Lawrence and Associates is an approved sponsor of CFP Board of Standards continuing education credits and offers CE programs on a variety of topics, including the financial planning process.