It’s not uncommon for lenders and equity investors to look at who is on your team when they are considering a loan or making an equity investment. It’s likely, particularly for younger companies, for the lender to be very interested in who the principles are on the team to evaluate the riskiness of the business. With that in mind, I came across four tips Allyson Willougby shares to hire the best talent. She’s talking about tech jobs, but I’m not convinced her list only applies to tech jobs:
- Commit to a long-range plan: This doesn’t only apply to tech jobs. Sometimes when a business needs to ramp up employees, they take the best of who shows up to interview instead of the best candidate for the job—there is a difference. Willougby suggests, and I agree, “[I]t’s better to invest the time needed to source the and hire the right people.” She cites the Bureau of Labor Statistics that suggest the average cost of a bad hire is 30 percent of their salary. A few bad hires and the cost adds up pretty quick.
- Bring it in-house: “If the company does not have recruiters on staff,” she says, “consider hiring some to work in-house.” Although this is good advice if your company is big enough—which many tech companies are—but nobody knows better than you what you’re looking for.
- Develop a referral network: Although this is very important when looking for new tech talent, the same holds true for other hires as well. “Encourage the company’s [employees] to help with networking efforts by offering financial incentives for recommending someone who accepts and offer from the firm.” Hiring people your employees know is a good practice. Think of all the people you may have worked with before, you have a pretty good idea of who is a good employee and who isn’t. Your employees aren’t going to recommend anyone they don’t believe is a good fit.
- Understand why the company’s offers get rejected: “If more than 25 percent to 40 percent of candidates are turning down the company’s offers of employment, it’s time to improve the ratio,” she says. There are a number of reasons a potential hire might turn down an offer. It could be anything from not offering enough salary, weak benefits, or a bad reputation in the market. “Look for trends in their responses; then make changes to correct the problems and improve the program,” suggests Willoughby.
Finding the right talent isn’t just hard in the tech industry, it’s hard for every small business. The average life-expectancy for an employee today is only around five years. In other words, you might be hiring new employees on a fairly regular basis.