Employee compensation has been a hot topic during the recession. Many employees have taken on additional responsibilities due to downsizing within the company but may not have received additional compensation for these new duties. Some of these employees may have even taken a pay cut just to keep their jobs.
You may run into problems retaining these employees after the recession ends if you don’t properly compensate them or negotiate a fair salary. Offering pay increases or bonuses may not be an option at this time, so you need to develop nonmonetary compensation options, continue to maintain a positive work environment and address any concerns upfront with employees.
“Ignoring salary negotiations only exacerbates an already bad situation,” says Jessica Ford, director of sales and operations with Ashton Staffing. “Employees may feel discontent about their salary and simply not discussing the issue may make them feel that they are not important and their worth is solely based on salary. Try to involve employees when possible and let them understand the company’s current financial situation.”
Smart Business spoke with Ford about key things to include in salary and compensation negotiations and how to develop nonmonetary compensation packages.
What are some key things you should understand about salary negotiations and employee compensation?
Negotiation is not about winning, unless both parties win. If either party feels they have not negotiated, both parties lose. Make every effort to identify the most recent salary and benefits your employee or potential candidate received. Ask an employee candidate to provide a W2 or proof of salary during negotiations instead of simply asking about his or her desired salary. You can also find this out from former employers when conducting reference checks. You may not be able to match the salary, but you will have a good idea of what the candidate will seek during negotiations.
Arm yourself and do your research. Be sure to reference your current internal salary ranges, the salary of current employees in similar positions, the profitability of your company, as well as the job search market in your area and the economic climate.
Even if an employee has positively impacted your company, you need to keep your salary limits in mind. You will save yourself years of headaches and prohibitive costs by doing this, even if you have to start your recruitment process over or tell an employee that salary negotiation is not an option at this time.
What are some common mistakes employers make regarding employee compensation, and how can they mitigate those mistakes?
Some employers have simply blamed the maintenance or reduction in employee compensation on the recession and have not come up with alternative ways to reward employees. Reducing employee discontent due to employee compensation is dependent on the total work environment you offer employees. Think outside of the box. Sometimes the biggest mistake employers make is to think that employees only care about a monetary salary. Offer other incentives that shift the focus away from monetary awards to employee recognition. This can lead to higher productivity.
How can you develop nonmonetary compensation packages for employees?
- Offer a balance between work and life. Allow flexible starting times, core business hours, work from home options and flexible ending times. Employees will deter from a fixation on salary if they feel like they have a balance and some freedom.
- Offer an attractive and competitive benefits package, if you are able to, with components such as life and disability insurance and flexible hours. An employee can be content with a low- to midrange salary if a strong benefits package is offered.
- Select the right people from the beginning through behavior-based testing and competency screenings. Offer performance feedback and praise good efforts and results.
- Do your best to create a fun work environment, because people want to enjoy their work. Engage and employ the special talents of each individual, and involve employees in decisions that affect their jobs and the overall direction of the company, such as the discussion of company vision, mission, values and goals.
- Continue company traditions, such as holiday parties. This gives everyone something to look forward to and adds an element of fun into the workplace.
- Remember to take an interest in your employees. Respect their ideas and listen to them. This small gesture can make an employee feel needed and that he or she has a purpose in everyday tasks, beyond just receiving a paycheck.
- Provide opportunities within the company for cross-training and career progression. People like to know that they have room for career movement.
How can you handle employees who are not happy with their salary and the negotiation process?
Remember to always be honest with your employees and never promise them anything that you cannot offer. Tell your employees upfront if it’s absolutely impossible for your organization to address salaries at this time. Be sure to balance this with some kind of nonmonetary reward. This is necessary in order to maintain a healthy and happy work environment. But if you are confident that your company will have a good year, set a date as to when your employees can expect a raise or bonus.
Jessica Ford is the director of sales and operations at Ashton Staffing. Reach her at (770) 419-1775 or email@example.com.
Smart Business spoke to John M. Leonard, the first vice president
and regional manager of the Atlanta office of Marcus & Millichap Real Estate
Investment Services, about where opportunities lie in the distressed real
How high is the level of
distress in the Atlanta commercial real estate market right now and what does
it mean to investors?
Weak economic conditions
through the recession took a toll on commercial real estate fundamentals in the
Atlanta metro area, leading to a significant amount of distress. Approximately
$5.1 billion of real estate in Atlanta can be classified as distressed, placing
it near the center of the pack when scaled to the market’s size and compared to
other major metros nationwide. The distressed dollar volume total includes
approximately $3.4 billion in troubled properties and another $1.7 billion in
assets already reclaimed by banks. The figure does not include, however, the
roughly $650 billion in commercial mortgages that has been restructured or
extended, or the $1.3 billion in distressed commercial real estate deals that
have already been resolved.
Which sector of the
investment real estate market has been impacted most by these delinquencies?
As of third quarter,
apartments account for the largest share of distressed dollar volume in the
Atlanta metro area, which should translate into some strong acquisition
opportunities for investors as fundamentals recover. Interest in stabilized
lender-owned properties remains particularly high, and several sales involving
this type of asset have already occurred. Prices for these deals generally
start below replacement costs at less than $40,000 per unit, with cap rates
varying from 8.5 percent to 9.0 percent. Assets with deferred maintenance or
high vacancy also continue to attract interest due to opportunities to
strengthen performance in the quarters ahead, but cap rates typically will
begin above 9 percent. While the expected improvement in occupancy and rents
will bolster NOIs, new supply will slow through the remainder of this year and
into 2011. The slowdown in construction will provide greater opportunity for
new owners to rebuild property operations.
How have delinquencies
impacted the retail real estate sector?
While investor demand remains
greatest for stabilized retail properties occupied by strong tenants with good
credit, the market for distressed deals has become more active. More lenders
have begun to list distressed shopping center properties in the Atlanta metro
area, a trend likely to persist over the remainder of this year. So far, even
vacant retail assets have attracted interest from local buyers, although prices
must be approximately $40 per square foot for deals to occur. Distressed sales
will likely continue to appeal mostly to local private investors, as the
majority of the retail properties classified as REO as of the third quarter are
relatively small, with an average size of approximately 33,000 square feet.
How is the office market
performing and how much duress is that sector under?
Office property operations
have continued to soften this year due to the completion of substantially
vacant properties in the urban core and continuing business closures and tenant
downsizings. Properties scheduled for delivery this year broke ground during
better economic times but will expand office stock by a significant 1.9 percent
at a time when demand remains slack and vacancy already exceeds 20 percent.
While gradual strengthening in the local economy will lead to the creation of
approximately 7,700 office-using jobs by year-end, many of these positions will
fill underutilized space before tenants contemplate enlarging their footprints.
Efforts by property owners to
fill vacancies as demand improves and leases roll over will sustain the
downward trend for rents, placing additional pressure on NOIs and contributing
to more distress in the local market. Although fundamentals will remain weak
for several more quarters, prices have likely neared the bottom. As a result,
investors seeking discounted value-add opportunities ahead of a robust recovery
likely will step up activity in the months ahead. REO activity is also on the
rise, and banks will dispose of more reclaimed assets as their balance sheets
improve. These lender-owned assets, which may be priced at deep discounts, will
present opportunities for aggressive investors to enhance value through the
employment of re-tenanting strategies, including steep rent cuts.
John M. Leonard is a first
vice president and regional manager of the Atlanta office of Marcus & Millichap Real Estate
Investment Services. Contact him at firstname.lastname@example.org
or (678) 808-2700.
Companies lose $350 billion a year and for reasons that can’t be blamed on the economy. These companies are losing money because of employee disengagement.
Employee engagement is a measurable degree of an employee’s positive or negative emotional attachment to their job, colleagues and organization, which profoundly influences their willingness to learn and perform at work. Thus, engagement is distinctively different from satisfaction, motivation, culture, climate and opinion. An engaged employee will act in a way that furthers his or her organization’s interests.
“How many of the employees in your company are really engaged? If you believe that about half are, you may actually be surprised,” says M.J. Helms, director of operations for The Ashton Group. “According to a recent Gallup study on employee engagement, about 54 percent of employees in the United States are not engaged and 17 percent are disengaged. Only 29 percent are engaged.”
Smart Business spoke with Helms about what your company can do to have a satisfied, productive and enthusiastic staff.
Why is employee engagement so important?
When employees becomes disengaged, your turnover rate increases, which impacts productivity and the bottom line. You need to discuss strategies and tactics that build a corporate culture where employees want to be part of the team. Start with an employee survey; feedback from all aspects of the employee lifecycle can be used as the foundation for change and ongoing success.
What should be asked in an employee survey?
Some suggested questions to ask in your employee survey are:
- Do you know what is expected of you?
- Do you have the materials, equipment and information you need to do your job right?
- Have you recently received recognition for doing a good job?
- Does your employer seem to care about you as a person?
- Does your manager encourage your development at work?
- Do you feel your opinions or ideas seem to count at work?
- Do you feel that your co-workers have the same dedication to their jobs as you?
- Do you have a best friend at work?
- When was the last time your manager talked to you about your progress?
- Have you had any opportunities at work to learn and grow in the past year?
Why does appreciation change everything?
Recent research has shown that appreciation is the driver behind great work. There is no greater tool for teaching, reinforcing and aligning company goals and values than employee recognition. Appreciation will help your company by ensuring that employees are receiving the appropriate training to support their ongoing development. It also links employee skills with opportunities for growth in the company, helps employees understand how their work contributes to the company’s bottom line, and gives employees ongoing feedback on their performance.
What is the ‘C series’ when it comes to employee engagement?
The ‘C series’ is 10 guidelines that should be incorporated into an employee engagement plan. They are:
- Career: Companies should provide challenging and meaningful work with opportunities for career advancement.
- Clarity: Managers need to communicate a clear vision. Success in life and business is, to a great extent, determined by how clear individuals are about their goals and what they really want to achieve.
- Communicate: Strong leaders clarify their expectations about employees and provide feedback on their job performance.
- Congratulate: Exceptional managers give recognition, which is sure to keep employees motivated.
- Contribute: People want to know that their input matters and that they contribute to the company’s success in a meaningful way.
- Control: Employees value control over the flow and pace of their jobs and managers can create opportunities for employees to exercise this control.
- Collaborate: When employees have the trust and cooperation of their team members, they outperform both individuals and teams that lack good relationships.
- Credibility: Upper management should strive to maintain a company’s reputation and demonstrate high ethical standards.
- Confidence: Good leaders help create confidence in a company by being examples of high ethical and performance standards.
- Connect: Your company must show that it values employees.
What else can an employer do to increase employee engagement?
No matter what the economy is like, employee engagement is imperative for businesses to survive and thrive. Here are five other ways to increase employee engagement:
- Reduce excessive workplace stress. If employees are stressed-out, which seems to increasingly be the case in today’s work force, they cannot be engaged.
- Address the situation by talking about it. Let employees know that you are aware there is stress in the workplace.
- Extend a helping hand. Let your employees know that you will work with them so they can keep a healthy balance between work and home lives.
- Think about innovative ways to reduce stressful situations. You may consider providing alternative and flexible scheduling.
- Think about hiring additional staff. Oftentimes, hiring an additional temporary employee seems like an expensive solution to employers. However, employers can end up spending a lot of time and money should an employee begin to have additional stress and become chronically absent or require medical leave. These situations can cause high turnover rates, so it is usually better to consider hiring temporary personnel.
M.J. Helms is the director of operations with The Ashton Group. Reach her at (706) 636-3343 or email@example.com.
Born: Knoxville, Tenn.
Education: Electrical engineering degrees from the University of Tennessee and Georgia Tech
As a child, what did you want to be when you grew up?
I wanted to be a ballplayer. I’m 3 inches too short and 50 pounds too light.
What was your first job as a kid, and what did you learn that still applies?
Carrying newspapers. I started very young I was 9 years old. [I learned] the importance of collections, the importance of getting paid.
What’s the best advice you’ve ever received?
It comes back to the best advice is to focus and be good at something.
What’s your favorite movie and why?
‘Remember the Titans.’ I love team-based sports and those kinds of feel-good movies.
If you could have dinner with any three people from history, who would it be and why?
Mother Teresa, I would love to get to know her. There’s an example of someone extremely passionate and committed and focused on being the best at what she did and caring for others.
Another person that would be very intriguing would be one of the founding fathers of the country pick any one of them John Hancock understanding the building of a nation and the enormity of building a nation. I’d love to know if they really understood the enormity of what they were doing back then. It could be really interesting.
Harry Truman is a president that I’ve read a fair amount about, and I’m intrigued by his approach to solving problems and his ability to pull together a group of people and a team.
Aventis Systems, Inc., located in Marietta, Georgia, is one of the fastest growing companies in the refurbished server business. Founded in January of 2008, Aventis Systems grossed 2.8 million dollars in revenue its first year in business and this year they are expected to hit just over 10 million. So what’s the secret to success for a small business like Aventis Systems?
Tiffany Bloomer, Director of Business Development, shares with us some of the strategies Aventis Systems developed at the beginning that set the company up for success in the refurbished hardware industry.
For more information on Aventis Systems, visit www.aventissystems.com or call 1-866-528-9313.
Tiffany Bloomer is the Director of Business Development for Aventis Systems, Inc. Reach her at firstname.lastname@example.org.
Tracy Lovitz is the Marketing Manager for Aventis Systems, Inc. Reach her at email@example.com.
Every business is looking for that extra edge that one little thing that will pull an organization past its competitors and to the head of its industry.
Perhaps you’ve considered trying new and advanced technologies. Maybe you’re thinking about implementing some efficient processes. But have you thought about going back to school?
“Partnering with your local colleges and universities brings a company great service, offered free, with no strings attached,” says Melissa Hulsey, the president and CEO of Ashton. “That should get the attention of any business in this economic climate and it is a great way to describe the career services offered by many colleges and universities in Georgia and around the country.”
Smart Business spoke with Hulsey about partnering with local colleges and universities and the value that comes from such partnerships.
How can partnering with local schools be mutually beneficial?
Employers can post their job openings to the colleges’ and universities’ websites at no cost, where both students and alumni can access them at any time. Not only that, companies can schedule on-campus recruiting visits, have access to statewide resume books and participate in career fairs. This is just the tip of the iceberg when it comes to the benefits that employers can see from a partnership.
The students and alumni also benefit by having access to companies they may not have been able to connect with before. Thus, students can obtain valuable experience related to their majors and possibly identify and reach out to their future employers. The schools also benefit because they’re the ones providing these resources. A partnership with a college or university is truly a win, win, win situation.
How can a business work with a school to develop internship programs and mentoring?
The first step in developing an internship or co-op program is to contact the career services department of the desired college or university. Generally, an internship is defined as a job relating to the major of the participating student, that is one semester long and may be paid or unpaid. A co-op is also a job relating to the major of the participating student, but it is generally two semesters long and must be paid. A career services representative can assist in deciding what program will work best for your business. They can also assist in defining job requirements, establishing a rate of pay, if applicable, and reviewing the program for areas of improvement.
On-campus interviews and automated applicant tracking make this an easy program to implement into a company’s new hire process.
Another great benefit businesses can see is the supervisory experience that internships or co-ops can offer to full-time staff. Junior staff members can manage the internship/co-op process, giving them valuable training, again at no cost to the company.
In what ways do schools help businesses connect with the community?
Participating in career fairs is one way to connect with the community. Potential employers are invited to come on campus and present their opportunities to students and alumni. Many times the names of companies in attendance are published in local media, serving as a great free advertising source. Networking with other participating businesses can lead to new business relationships. Students are known for bringing fresh ideas and being technologically savvy, so tapping into this resource can only help a business in its community relations effort.
How can a business find a school that’s a good fit, and then begin a relationship?
Begin by reviewing what type of position in your organization would benefit from using students or recent graduates. What students bring in terms of motivation and lower cost must many times be balanced by a lack of on-the-job experience. Will your job be project-based or do you seek someone that could move into a full-time position at your company? Once a job has been identified, list the colleges or universities that produce these majors and begin contacting them to discuss your opportunities. Do not underestimate the technical college system in the State of Georgia when contacting schools. Technical colleges are very specialized in their training and offer areas of study that make students quickly available for the work force. Technical colleges also offer services like quick start and other customized training programs for businesses.
What would you tell a business leader who doesn’t see the value in working with local schools?
I would tell them that their competition probably sees the value in this resource, and may already be utilizing it. A qualified, diverse talent pool is available and waiting to be tapped into. Businesses have the opportunity to mold the next generation of leaders, they just need to take advantage. You never know, you could just find a diamond in the rough for your company.
Melissa Hulsey is the president and CEO of Ashton. Reach her at (770) 419-1776 or firstname.lastname@example.org.
On Paul Damico’s first day as president at Moe’s Southwest Grill, there were no meetings. There was no slowly easing into the business. There was hardly even time to talk. It was all hands on deck, and he had to roll up his sleeves and be prepared to help anyone and everyone in any way, even though he didn’t know what was going on.
It was Cinco de Moe’s May 5 and the burrito restaurant franchise company’s single largest business day of the entire year.
“I don’t know why that happened,” Damico says. “I didn’t know there was a Cinco de Moe’s, but I started on Cinco de Moe’s, and it was a little crazy in the office that day.
“It was a little overwhelming the first day, and it also brought to me the importance that this day has on the system and on the team.”
It was his first lesson in understanding the chain, which was struggling at the time. It had been acquired by FOCUS Brands from Raving Brands less than a year prior to him starting and was being run by the now chairman of FOCUS. The company had gone through rapid growth since its inception in 2000, but franchise sales at that time weren’t that strong, and franchisees and employees were uncertain about the future as they struggled to be a part of the new FOCUS Brands family.
“I brought some stability in the group and started to build a team that would take this brand, which had grown at an unbelievable rate through the first seven years; we were going to start to stabilize it because they had grown so fast they were playing catch-up,” he says. … “We needed to settle down and put some processes in place.”
Despite uncertainty on the part of employees and franchisees, Damico was confident. He had been part of the FOCUS Brands family previously as a Cinnabon and Carvel franchisee, so he knew FOCUS was a good company that would work well for Moe’s. He just needed to get the right people in place so he could go on to add better processes to stabilize the organization and poise it for more growth
“I like to say, ‘Put the right people in the right seats on the bus,’” he says. “Kind of cliché, but it was something that really needed to happen here, and it took every bit of a year to make that happen. We had to bring in some new talent. We had to shift some talent.”Get to know your people
To follow the guidance of Jim Collins by getting the right people in the right seats on the bus, Damico had to first know the people with whom he was working.
“The first step was really getting to know who the team is,” he says. “I spent a lot of time meeting with the team I had inherited.”
One of the keys to knowing people is to socialize with them.
“Don’t be afraid to have a social occasion with every member of the team, whether that is the clerk or the senior vice president of marketing,” he says. “Bring them together because we all have a common goal.”
Damico doesn’t just grab a burrito at the restaurant with his employees. Instead, he invites them into his home.
“That really takes down everybody’s guard,” he says. “It strips away everybody’s title, and it brings the team together in a comfortable setting. There’s nothing more comfortable than inviting people into your living room. If we can convey that to the team and the team can react to each other that way, maybe that’s what transcends into our restaurants at the end of the day.”
While social get-togethers were part of the puzzle, the biggest piece was having one-on-one meetings with everyone.
“I would ask everything from, professionally, what they were focused on, what they should be focused on, and what they thought they should be focusing on but weren’t focusing on,” he says. “Then the conversation delved into their personal lives do they enjoy what they’re doing? We talked about wives and husbands and kids and families. For me, it’s important to get to know people on a personal level.”
It’s also critical to find out if your employees are happy.
“Find out what people want to do,” Damico says. “If you were to poll any organization, you’d find that 50 percent of the work force are doing things they’re OK doing, but it’s not getting them excited.”
Instead, he wants his people to be fired up about their jobs.
“Don’t sit in a role where you are not going to be absolutely stoked to come to work every single day,” he says. “Don’t do it for the paycheck.”
You also need to recognize if people are more suited for another position, even if they’re content in the role they currently have.
“You get that through fairly direct interaction and direct questions. You find out fairly quickly what people are excited about and what their history is, what their professional history is, and I’ve had conversations where I was speaking to a person who clearly had the passion, the education, the experience in the human resources arena, but that person was running company operations, and that’s a bit of a disconnect,” he says. “That’s a big disconnect for me.”
And you also have to recognize when people are bad for your team.
“It’s less about the role and more about your management attributes, if you will,” Damico says. “We look at things like energy. We look at things like can you play in the sandbox with the team. You may be the best operator, and you could have 15 years of being the VP of operations, but if you can’t play in the sandbox with the rest of the Moe’s team, then you’re really detrimental to the team.”
By taking the time to speak to people individually, Damico was able to see the moves he would have to make to ensure he had the right people.
“Those one-on-ones revealed to me some of the challenges the individuals were going through with the acquisition,” Damico says. “It revealed to me some super talent we had on the team, and it also revealed to me some lack of talent we had on the team that we needed to shore up.”Fill in the gaps
Once he got to know the people, he recognized what internal moves were needed and which positions he needed to fill from the outside.
When he’s interviewing, he says one of the keys is to first make people feel comfortable talking with you. So for the first 15 minutes of any interview, before he asks any questions, he talks about Moe’s. Because he has a high level of passion for the brand, he allows that passion to come through in the way he speaks about it, which gets the interviewees excited. He also talks about his personal life to make them more inclined to speak about theirs.
“It gives them some time to get comfortable and relax and want to open up because I do it in my opening remarks,” he says. “I talk about my wife and my children and not only my management style but also my parenting style, and I may draw some correlations between the two.”
Once he starts asking questions, Damico has a specific approach to hiring that he takes because he knows what he’s looking for I″E4L″. The I’s stand for integrity and intelligence, while the E’s represent energy, energize, edge and execute. Then the L’s reference loyalty and leadership attributes. To learn if potential candidates embody these characteristics, he uses specific questions to get to the heart of their personality.
“A lot of things you can see in the body language when you’re talking to them energy and asking questions,” he says. “How do you energize? When you walk into a room, does the room light up or do people not even recognize you’re there? That’s an energizing factor, which brings a whole different level of excitement to a conversation.”
When interviewees respond, watch their body language to see if it matches their words.
“If somebody sits there, and I’m having a conversation, and I say, ‘How would you energize your team to accomplish a goal?’ and their hands are folded and in their lap, I’m not sensing they can energize the situation,” Damico says. “What can you do to take the flag and run up the hill, and when you get to the top, you’re not there by yourself that’s a lonely place. When I turn around, I want to see the Moe’s team standing there with me. That’s energizing a group of people.”
He says to also ask questions that get to the heart of these attributes.
“Always ask question that are tied to real-life experiences, and those real-life experiences I like to tie to [are] personal or family experiences,” he says. “Everybody that goes through an interview can recite the local buzzword, what the nomenclature is of the year, the things that let the interviewer know that you’ve got the business sense.
“But when you try to ground people and talk to them and ask them specific examples about how you raise your children in an environment where they felt comfortable to tell you what it is they’re doing in their life, you have to dig pretty deep,” he says. “So tailor the questions toward personal and life experiences rather than just the corporate buzzword and what you did in your last job.”
Overall, it took him about three weeks to conduct one-on-ones and a year to make all of the moves and hires to have the best team in place, but the time was well worth it. With the right people, he was able to then go on to make process changes and strengthen elements of the business that had been neglected or underutilized. As a result of his efforts, Moe’s had $323 million in net revenue last year, sold more deals in the first quarter this year than all of last year combined and is poised to add 100 restaurants next year to it’s already more than 400 locations.
“Today, as we sit here two years from when I started, we have all the right people, and they’re clearly all in the right seats, and if you look at what’s happening with what we’re doing from a marketing perspective, a culinary perspective, you look at our sales … there aren’t many companies that are doing that right now,” Damico says. “… There’s so many positive indicators of what’s happening with the brand.”
How to reach: Moe’s Southwest Grill, (404) 255-3250 or www.moes.com
Deciding whether to promote an employee from within or hire from outside the company can be a difficult decision, with many factors to be weighed. Promoting from within allows you a significant reduction in recruitment, hiring and training expenses but does not allow you a fresh perspective or new ideas. Hiring from outside the company gives you a renewed perspective and potentially different skill sets but can result in an adjustment period for the new hire and current employees.
“You must make an honest evaluation of your company’s needs and consider if those needs can be met with current talent,” says Michelle Elson, corporate director of operations with Ashton Staffing. “Consideration of company structure and politics must also be made, as well as if internal changes would harm or inspire company morale.”
Smart Business spoke with Elson about the pros and cons of promoting from within and hiring from outside and how to make the best decision regarding hiring.
What are the pros and cons of hiring from within?
- The current employee’s familiarity with the company and a reduced adjustment period should allow for a faster transition.
- Significant reduction in recruitment and training expenses, which is a benefit for any company.
- An increase in motivation and loyalty from internal employees, which boosts company morale.
- A fresh perspective is sometimes lost if an employee has preconceived ideas or thoughts on the position.
- A reduction in morale may occur if other employees feel slighted by a colleague’s promotion or lateral move.
- Internal hiring reduces the size of the prospective talent pool, limiting your access to the broad experience base available.
What are the pros and cons of recruiting from outside your company?
- Access to a larger talent pool, with knowledge and skills that are not currently available in the company.
- New hires bring in a fresh perspective and do not have company-specific experience to cloud their outlook.
- The combined experience of recruiters and access to an established pool of prescreened candidates makes an agency a good resource for external hiring.
- An increased expense to the company for advertising, recruiting and screening.
- Potential resentment from current employees.
- An increased adjustment period, learning of company culture, and training on specific software and products.
How can you decide which route would be best for your company and particular hiring need?
Consider the following:
- What is your budget for this hiring?
- Is there a viable candidate already established within your company?
- Is your company in need of new ideas and fresh perspectives?
- How will company morale be affected by an internal or external hiring decision?
Each company will have different answers to these questions and careful thought will ensure that an informed decision has been made. If you are on a tight budget, internal hiring would be the most cost-effective solution. An internal hire generally does not require a large monetary investment, other than a possible salary increase. Costs such as advertising, screening and more in-depth training would need to be planned and budgeted for if you choose to hire from outside the company. You also need to prepare for a training period and allocate necessary staff for either promoting from within or hiring from outside.
How can you deal with any backlash if you decide to recruit from outside the company?
Careful planning can neutralize the potential for unhappy employees. Post the position both internally and externally for a reasonable period of time, and make the job description as specific as possible. Make sure all skills, education and requirements for the position are outlined carefully. Interested employees may initially feel like they are qualified for the position, but may decide to include or preclude themselves after being presented with well-written qualifications. Be open-minded; an internal employee may be qualified and should be considered, as well, for the position. Establish trial periods, set reasonable goals and plan an evaluation at the end of the probation period. This allows you to cite an impartial process and feel confident in your decision if backlash does occur.
Bringing new people in or moving someone internally can affect company morale, both positively and negatively. You can’t control people’s feelings. You can minimize the impact by making fair hiring decisions and making sure the management team is proactive and addresses negativity with positive statements.
How do you make sure employees are well-trained and prepared so you are able to promote from within?
Cross-train and reward your talented and committed employees. Don’t let talent go to waste. You would be foolish to dismiss an employee’s initiative if he or she is interested in learning a new skill. Mentoring also establishes a culture of teamwork and preparation. Offering reimbursement and recognition for the completion of relevant continuing education classes will encourage employees to sharpen and maintain their skills.
Michelle Elson is the corporate director of operations at Ashton Staffing. Reach her at email@example.com or (770) 419-1776.
Born: My father was in the Navy so I was born in Yokosuka, Japan. My family and I moved around. We lived all over the world until I was, I think, 12, and then we settled in southern Indiana. That’s where he retired.
Education: Purdue University
What’s the best advice you’ve received?
I was really fortunate to work at NCR when a guy by the name of Chuck Exley was the chief executive officer. I remember Chuck telling me one time that he can always go out and find a salesperson or an accountant or a marketing person, but it’s much more difficult to find businesspeople. I asked him what the difference was in his mind. He said businesspeople are people who can apply all of those disciplines and make them work together and create value for investors, and I tell you, that had a big impact on me. I think the best advice was to develop yourself into a businessperson.
I asked him, ‘How do I do that, Chuck?’ and he said, ‘Get out of headquarters and go take care of customers.’ I said, ‘Great, I want to do that.’ About a month later I was transferred to Oslo, Norway, to run operations in Norway. I was the only non-Norwegian there. But it was an incredible experience for me, and it absolutely did develop my business acumen, because all of a sudden, I had engineering and salespeople I was trying to lead, and I was a finance person, so I certainly wasn’t going to be able to out-engineer them or outsell them, so I needed to blend their skills in a way that our company was better for. It was great experience. The one thing I figured out a long time ago is that successes like this are driven by getting the right people together. I always try to get people that complement what I am and what I’m not.
As a kid, what did you want to be when you grew up?
A pilot. I thought it was an incredible thing to be able to fly.
With the right technology, even a small business owner can begin to operate like a senior executive at a large corporation.
“Business owners don’t need more e-mail,” says Rich Cannon, industry development marketing manager for Microsoft. “What they do need is a better way to process it. The problem is, a business owner gets 200 e-mails a day, and there are three in there that will kill the business if they’re not processed. Then there are another 197 that if they get to, great, and if they don’t, it’s still OK.”
Smart Business spoke with Cannon about how the right technology can save you both time and money.
Why should a company have all of its technology streamlined?
E-mail is really the primary way that business owners deal with their customers and their vendors. And you can choose from among all kinds of free e-mail providers, but how are you going to process that e-mail?
You have all this information coming at you, but there are tools that every business can leverage to make it more productive and make its employees more productive. If someone asks you if you can do an appointment, the information is there, you have a task list that you can put it on, and all of that synchronizes with your mobile device.
Now if other people in your office are trying to book an appointment, they don’t have to call you. They can see your schedule and book a time that’s convenient for you, which reduces the number of e-mails and voice mails you’re going to get.
How can business owners get started coordinating their company’s technology?
Most businesses have e-mail of some sort, but one person may have one free service, while another has e-mail through his or her broadband server. So putting everyone on a common system is the place to start.
With the right provider, you’ll get help going through the conversion from whatever each individual was using before onto a system whereby everyone can see one another’s appointments. Once everyone is on a common system, the provider can also help you get your mobile device activated and connected into that system so that you can get everything that is on your desktop on your phone.
What are some mistakes business owners make when moving to a more centralized system?
First, they assume that not everyone in the company needs to be on it because not every job is computer-oriented. The fact is, everyone has to book appointments with someone else, and everyone has to send and receive messages. Everyone has tasks that he or she is doing, and everyone has a schedule. So the first mistake is setting it up for some employees but not for others.
The second mistake is thinking that it’s going to be a huge expense. Business owners think they’re getting a better deal by sticking with their free e-mail account, but that doesn’t offer the tools to process e-mail. Also, a lot of people buy an e-mail software program, and they pay as much for that copy as they would pay for a monthly service for a year. As a result, they don’t get the latest updates on the software, which really improve your productivity.
Finally, they continue to maintain a server in the office. With the hardware and the upgrades and the software licenses, that server is costing the average company $1,000 per year per user, versus a far lower cost for an e-mail service. If you’re using an outside service, that company is taking care of the management of the service, the backup and turning mailboxes on and off. People in your office maintain control over the system, but you don’t have the expense of owning the infrastructure. It really is a better way.
How can using a centralized service save a business owner both time and money?
There are a few examples. Imagine that someone tells you his or her phone number has changed. You put it in your cell phone, but it doesn’t sync back to your e-mail or to your way of processing e-mail. The next time you switch phones, you lose the person’s phone number.
The second timesaver is all the calls you don’t have to take or make. If your assistant needs to set an appointment for you, if all your appointments are in a book somewhere or are in your head, that person wouldn’t be able to do his or her job. With a system in place, your assistant can view your schedule, put something on it, and it shows up on your phone, complete with the attachments you might need for the meeting. As a result, it reduces the number of phone calls and helps you keep everything in sync.
There are a lot of those little things that people have to think to do if a system isn’t doing it for them. And when you take all of that into account, it saves you about 20 percent of the time that you’re in front of your computer or using your mobile device in a week. If you have desk workers at your company, that could save them a day a week.
Rich Cannon is an industry development marketing manager for Microsoft. Reach him at firstname.lastname@example.org or (770) 843-2126. For more information, visit www.business.comcast.com. Microsoft Communication Services offered by Comcast featuring Microsoft Outlook 2007.