The People Side of Business Law

by | June 1, 2011

Business owners know the value of hiring and developing a strong workforce – a workforce that can accomplish the business’ goals efficiently and effectively.  Yet much of the hiring that’s done is informal.  The process of selecting the employee typically includes interviews focused on whether we “like” the person and the person’s hands-on experience, more than whether the person has the character to grow in the job and the company.  The informality is furthered with little documentation of duties, job performance expectations, and policies and procedures.  How are businesses to create a great workforce without the infrastructure in place to define what’s needed?

On the hiring side, the first step is to understand the value of spending the time and effort to develop an infrastructure that will help you define the needs of the company and fill those needs with the right people.  How much does it cost your business to bring on an employee that doesn’t work out?  Usually, the biggest aspect of this cost is the time committed to interviewing and training – we don’t track it well and, therefore, don’t know the impact of the cost. 

Another key aspect of hiring is formalizing the company’s needs.  Spend some time thinking about not only the immediate needs of the company but how this person and position will grow in the company’s overall plan.  Thinking beyond the immediate needs and planning for the future is a must during any hiring process and includes an organizational chart and descriptions of key positions and reporting relationships.  Compensation structures should also be considered during this planning process.

In understanding the costs of hiring, the value of doing it right the first time becomes evident.  Tools such as the 80/20 Protocol by Taylor Protocols, which provides candidate screening and top performer profiling, allow for visibility into the character and traits of candidates to see how they line up with the company’s current team and culture.  Most of us feel kind of funny presenting a job candidate with a “personality test” as part of the hiring process but these tools provide insights that can’t be discovered in an interview.  They aren’t fool-proof, of course, but another metric for the business to look at in the process.

Next is the “on-boarding” process which is where adding formality will go a long way toward protecting the business.  Most employment relationships in smaller businesses are made on a handshake or just the issuance of a paycheck.  Creating a formal, legal offer letter that outlines the job description, pay rate and pay schedule, reporting relationships, and other basic information.  In addition to the basic job information, the company should have a policy manual or employee manual that describes the company, expectations of employees, benefits, key policies and procedures, and protections of confidential information and client lists.   Business owners often don’t put the time necessary into creating policies and procedures.   There’s the fear of failing to comply with the formal policies as well as the question of how to change policies once they are in place.  As much as this seems daunting, the overall benefit to employees is huge and it eases the administrative time spent on employment matters.  Employees know what to expect and the company knows how to handle various situations.    

The formality of doing it right the first time will pay off in many ways.  From a cost standpoint, there will be fewer employee disputes and lower administrative costs of doing business.  Best of all, though, employees know their role and expectations in the company which drives increased job satisfaction and loyalty to the business.