Eight really good reasons why you hired the wrong person

Adding an employee or replacing someone who is performing poorly can be time consuming and expensive. Before you bring someone new on board, it pays to develop and implement a formal hiring process, but before you do that, you might want to spend some time figuring out where you’ve gone wrong in the past.

After years of working with sales leaders, senior executives, managers, and business owners, we’ve put together a list of the eight most common reasons why the wrong person gets hired so often:

  1. Panic mode. When you’ve had to fire a few employees and others leave voluntarily and perhaps unexpectedly, your instinct may be to hire fast and furiously — don’t give in to it, because you may come to regret making a rash decision.
  2. Gut feel. Managers sometimes boast, “I’ve been hiring for over a decade (or more). I know a good candidate when I see one!” Even the most intuitive hiring manager will get it wrong more times than a less experienced manager who has a good set of tools. Make sure you’re prepared.
  3. Falling hard for candidates who sell hard during the interview. People moving from one job to another can be interviewed more than 20 times before they get hired. That’s a lot of good practice — at interviewing.
  4. Depending only on a strong track record. Past performance does not equal future performance. The person you hire will be doing a different job for a different company that sells different customers and different products or services in a different market against different competitors alongside a different team.
  5. Relying on a recommendation from a peer or superior without an objective assessment. Sometimes an influential board member, senior-level executive, or even a good friend will push forward a candidate and ask you to take short cut around your company’s formal hiring process. In as little as 15 minutes, you can determine, based on a profile that you have already built, whether a candidate is actually qualified for the job. If you hire that candidate anyway you can lose both revenue and opportunities and you can damage your relationships with customers and business partners. And worse yet, that key person who recommended that candidate may blame you for the lack of fit, damaging your relationship as well.
  6. Not checking references effectively. This doesn’t mean calling those people listed on candidate’s resume, who could be a best friend, an uncle or a well-meaning neighbor. Instead, dig deeper: speak with their former managers, customers and peers. Just be sure you know your company’s policies for blind reference checks. (LinkedIn can be a great tool for this kind of investigation.)
  7. Not using a profile or competency map for that specific position. Unless you have a clear, documented specification of what skills, traits, and behaviors are required for job success, finding the right person will be close to impossible.
  8. Disregarding proven tools that are readily available. These can include assessments, background checks, simulations, behavioral interviews, and a host of other resources that are easy and often inexpensive.

Mis-hiring isn’t exactly an epidemic, but when you’re hiring, it’s significantly easier to avoid a mistake than it is to solve one. Implementing a formal hiring process long before you start collecting resumes not only ensures you’ll hire the right person for the job, it will also save you time and money.

Dave Stein and Steve Andersen are the co-authors of  Beyond the Sales Process: 12 Proven Strategies for a Customer-Driven World. BeyondTheSalesProcess.com

Five ways to get serious about workplace diversity

To be competitive, companies can no longer afford to view workplace diversity as a soft issue and miss out on the female talent pool, — not when highly educated young women are entering the workforce in equal, if not greater, numbers than young men and certainly not when research has consistently shown the clear correlation between female leadership and positive business outcomes.

With that in mind, here are five ways to get serious about workplace diversity right now. Today.

  1. Hire Better
    Getting serious about workplace diversity starts with the hiring process. That’s not to say it’s sound practice to hand down a directive to hire more women — you should always hire the best candidate for the job and your organization.The work real work begins before the interview. Companies doing this right are able to build a pipeline of female talent by cultivating relationships between the organization and women’s schools and professional networks. They’re not afraid to say they’re investing in diversity initiatives, or to proactively state their intentions to hire, develop and promote women in their workforce.When you can set the tone for an inclusive culture in the hiring process, it can help improve the organization’s reputation and attract top-level female talent.
  2. Train Staff
    An important next step is how your organization approaches diversity from a talent management perspective. Train staff to be aware of and avoid biases that can penalize female employees.For example, the approach to hiring, evaluating and promoting employees should be about performance, capability and equal opportunity. A mandate to promote a percentage of female employees is a Band-Aid. Training your staff to combat biases and implement fair practices is a more effective solution for the long-term.
  3. Salary Audit
    You can’t talk about diversity and equality without talking about compensation. The wage gap between men and women is well-publicized, but there’s no good excuse for permitting a gulf to exist when you have the ability to close the gender wage gap.There have been some extreme examples of addressing this recently, such as the move to ban negotiation during recruiting and hiring. Another effective approach would be to conduct a thorough salary audit across the board at your organization, and then you can begin to take steps to ensure that every woman should earn equal pay for equal work as their male colleagues.
  4. Family Care Benefits
    A key to improving gender diversity throughout your organization, including building a pipeline of female leadership, is promoting a culture that supports working mothers. Leading employers are investing in programs like paid leave, flexibility and family care benefits as a way to make it easier for working moms — and all caregivers — to manage their career and family responsibilities.A strong recent example of this was earlier this year at Davos and HeForShe’s first gender parity report when Twitter COO Adam Bain outlined the company’s steps to improve gender equality, including paid parental leave, roundtables for new moms (and dads), investments in nursing rooms (and education for nursing moms) and partnering with [email protected] to provide family care benefits for employees.
  5. Commit to It
    Not to be overlooked is the importance of holding yourself accountable for improving gender diversity at your workplace. Don’t be afraid to put a stake in the ground and commit to something, like HeForShe or becoming a LeanIn company.

    For example, when Care.com joined IFC’s SheWorks global partnership and became a LeanIn company, the leadership has seen those commitments as a measure of accountability. When we’re publicly committing to implementing specific programs and reporting back on the result, it really holds us to carrying out those actions and modeling positive behavior.

Michael Marty is senior vice president and general manager at [email protected] .

Reducing turnover: A unique approach to hiring for manufacturing

As with many manufacturing companies, Mar-Bal Inc. has experienced challenges in its day-to-day operations regarding hiring and on-boarding of manufacturing employees. Manufacturing of thermoset plastic parts is not a glamorous industry, our location can be challenging in itself and our resources for hiring were few.

Our highest turnover occurred in 2014 when it peaked at approximately 14.7 percent. We monitored the metrics using exit interviews, reasons, tenure and deliberate turnover. We were dealing with turnover in a passive manner and needed to address the situation head on.

We had to focus on hiring for fit and training for skill. It was then that we decided to design and implement a new process for recruiting, hiring and on-boarding manufacturing employees. Our goal was to improve the quantity and quality of potential candidates to attract employees, reduce employee hiring and training costs and improve employee retention.

The process

First, we developed new talent pipelines, including community colleges, technical colleges, military, career fairs, local outreach and other current employees. Creating awareness and continuing to develop relationships is key to pipelines for hiring. Developing pipelines is not an event it is a continuous process.

Next, we developed our Realistic Job Preview for applicants to apply online to see and hear about our company first hand. This venue provides information including job descriptions, schedules, benefits, and employee testimonials. For those who do not have computer and/or Internet access, we set up a computer for applicants to use.

The next step is to review the applicant information from the RJP and invite chosen applicants to Recruiting Day. There, potential employees spend a few hours learning about the company, seeing what we make, touring the plant and experiencing different roles in different departments.

Applicants can opt out at any time during the process. Maybe they aren’t comfortable with injection molding or the heat. And that’s OK, the process is about asking, “Do they fit?” Interested individuals speak with current employees and we provide them the opportunity to get a firsthand look and feel of the job. This atmosphere creates a win-win by allowing candidates to decide if this is the place they want to work and if we want them to join our team.

The offer

After a candidate accepts a job offer, they are invited to a World Class First Day. This includes more specific human resources information, a department welcome and introduction to others in their department or on the shift, more in-depth safety orientation and a mentor is assigned to shadow the individual. The on-boarding process then continues for their first 30 days and beyond. This is the “train for skill” part.

This process realized a reduction in turnover within 6 months. By August 2014 our turnover rate was practically cut in half to 7.8 percent. Since continuing this process, our 2015 turnover averaged 5.3 percent. This entire process takes the commitment of not only human resources, but plant leadership and executive leadership.

Maria Gaeta is the corporate director of human resources of Mar-Bal Inc., headquartered in Chagrin Falls,  the leading integrated compounder and molder of BMC Thermoset composite products and value added finishing services. Maria has more than 20 years of experience as a human resource executive, director and consultant. 

The cost of quality: how much the wrong hire is really costing you

Most managers understand that there’s an investment — of both time and money — associated with the recruiting, hiring and onboarding process. They also understand the negative consequences that result when a recent hire doesn’t end up sticking around.

However, while employee turnover that results from a poor hiring strategy has been deemed and understood to be a costly problem by some organizations, many companies have yet to take a critical look at the impact of bad hiring decisions on their business, much less taken the steps to solve the problem.

Time to face the music: Bad hires are costing your company more than you might think. Here’s how:

  • You’ve Started a Pity Party — There are few situations where an employee’s departure would result in anything other than decreased morale for his/her colleagues. Even if the individual hadn’t built close personal relationships with co-workers, the thought of taking on a part of another person’s workload without offering any type of benefit for sticking around or pitching in is not only frustrating, it’s costing you money.

In the wake of an employee’s departure, there is often a lull in productivity, despite a potential increase in demand for assistance from other team members. As productivity lulls and morale sinks, those left to step up might consider the idea of leaving too, distance themselves from managers who seem to be expecting a teamwork mentality at the worst of times or just become disengaged with their own role and responsibilities.

If you think the financial implications of these situations are negligible, think again. Research firm Gallup, Inc. estimated that there are 22 million actively disengaged employees costing the economy as much as $350 billion per year in lost productivity — and these costs are separate from the expense associated with replacing a bad hire.

  • You’re Making it Harder to Hire Top Talent — You’ve finally realized the individual you hired isn’t the right fit and are searching again for the team you’re managing or hiring on behalf of that fits in well.

You find an excellent candidate and are disappointed when the candidate turns down the opportunity to interview — or worse, when they turn down the position after additional resources have been spent recruiting and interviewing him/her.

After scouring emails and begging the recruiter/HR director for answers, you find out your dream candidate turned down the opportunity due to negative feedback about the company. Maybe they sourced negative commentary from current or past employees on social media, on Glassdoor, in forums or elsewhere.

What matters more than the venue in which the poor reviews were shared is that current or former employees ill-suited to your organizational culture or job requirements are unhappy for one reason or another — whether still on the job, voluntarily separated or fired.

In the digital world we live in, it’s too easy to rant about it for anyone and everyone — including the candidates you were set to hire— to see. The negative impact that a bad hire can have on your employer brand can be extremely detrimental and difficult to remediate. The only way to avoid it? Don’t hire them to begin with, but in this fictional (though all-too-common) example, the damage had already been done.

  • Cold, Hard Costs — Although there is some level of cost involved in each of the scenarios described above — poor employee morale and damaged corporate brand reputation — there are potentially significant budget impacts associated with an employee’s departure.

While the cost to replace employees will certainly vary based on his/her salary, experience and other factors, a recent study found that the cost of replacing an employee with a mid-range salary ($30K-$50k/year) is about 20 percent of their annual pay.

That means replacing the wrong candidate for a $40K manager position will cost around $8,000, and it only goes up from there — revisiting the hiring process for a position that requires a highly educated executive position can cost upward of twice the annual salary of the employee who departed, according to the Center for American Progress, “There Are Significant Business Costs to Replacing Employees,” November 2013.

While the process of examining the costs associated with bad hires can be a daunting one, it’s essential to overall improvement of the recruitment, hiring and finance operations. Although hiring today — against a backdrop of ubiquitous access to social media, prevalence of sites like Glassdoor and competition for top candidates — certainly has its challenges, it also has its advantages.

Technology has enabled incredibly intelligent talent acquisition solutions that go beyond hosting data. By harnessing the power of data, and integrating cross-platform tools tied to job boards, video screening, social media, mobile enablement and many others, businesses can find the right fit more often, much faster and with fewer associated risks.

Colin Day founded iCIMS in 1999 and is the company’s president and CEO. He has twice received Human Capital Magazine’s HR Future Leaders Award. He has also twice been rated one of the top 5 forward-thinking innovators in Fast Company Magazine’s Fast 50 Readers Challenge. Visit www.iCIMS.com.

Hiring entrepreneurial talent is all the rage, but will it fit your business culture?

Entrepreneurship. It’s synonymous with ambition, creativity, risk taking and high-profile success stories where billionaires are made. What corporation wouldn’t want more of that?

Hiring entrepreneurial talent to infuse some of this startup magic into an existing business is a popular concept, but it can also go terribly wrong. The key is to understand where this type of talent falls on the broad spectrum of business culture.

At one end of this spectrum are the high-performing corporate employees, who thrive in a stable environment where the rules are firm, the expectations clear and the long-term company strategy is unlikely to change overnight. These are the people who know how to play within the rules of the game and win, but would likely feel frustrated and rudderless in a startup environment.

On the other end are the aggressive startup hires, who thrive in unpredictable situations where the rules are flexible and winning often starts with staying in business another day. These people strive to be game-changers and at a startup they have that freedom.  They would likely find themselves feeling suffocated by an established company culture where, practically speaking, the rules of the game cannot be radically or rapidly changed.

Identify the talent

At JumpStart Inc., our approach toward recruiting and evaluating talent is anchored in understanding where potential employees fall on this spectrum and placing them where they can truly thrive.

Startup life is hard. Most ventures are severely time- and resource-starved. Entrepreneurs use words like “dynamic” and “evolving” to describe this climate, but it doesn’t fully capture the pressure cooker reality of working in a world where 12-hour days are the norm, the next shift in organizational strategy is just minutes away and failure (statistically speaking) is the most likely outcome.

For this reason, we encourage startups to be very intentional about filtering out candidates who are not likely to do well in a rapidly changing environment, no matter how talented the candidate may be. Entrepreneurs must surround themselves with adaptable people or their venture will crumble.

If they are successful, these startup ventures eventually become larger companies. As they grow, they often begin to look toward the other side of the talent spectrum to find leaders with the ability to create a more structured environment and employees who can thrive in this new climate.

Large companies looking to perform this ritual in reverse should begin with the same clear understanding of what kind of talent they are looking for and why.

A shot in the arm

When done right, an injection of entrepreneurial instinct can be just the thing to bring new life and new ideas to an established business culture; but pulling this off takes a lot more than hiring a handful of highly creative risk takers and turning them loose.

It takes a real talent strategy that addresses roles, goals and cultural fit, because the word entrepreneurial means different things to different people.

2013 ERC / Smart Business Workplace Practices Survey: Workplace makeover

Sue Ann Naso

Sue Ann Naso, President, Staffing Solutions Enterprises

If you had any doubt about the recession being in the rearview mirror, consider this tidbit from the ERC/Smart Business Workplace Practices Survey. In the last 14 years, only two years — 2009 and 2010 — have returned results with Northeast Ohio companies reporting the poor economy as their toughest challenge. For the 11th year, companies in 2013 are reporting that their biggest challenge has been hiring and retaining talent.

The survey, which has been a collaborative effort between ERC and Smart Business since 2001, is aimed to let you know what companies in Northeast Ohio are doing to drive their businesses forward.

This year in particular showed an overwhelming amount of companies, 49.5 percent, listing hiring and retaining talent as their No. 1 challenge.

The other concern many Northeast Ohio workplaces have includes health care costs and the uncertainty of the Affordable Care Act (ACA). The good news is that a mere 5 percent of companies named economic conditions as the toughest challenge.

Lauren Rudman, President, Cleveland Society for Human Resource Management (SHRM)

Lauren Rudman, President, Cleveland Society for Human Resource Management (SHRM)

“Hiring continues to be strong,” says SueAnn Naso, president of Staffing Solutions Enterprises. “We see more and more companies adding recruiting talent, and it’s getting much more competitive to find those people, which is a good sign.”

Companies in Northeast Ohio are ramping up their recruiting efforts with 84.2 percent utilizing Internet job boards, and 50 percent utilizing social media to recruit talent.

“On the hiring side, you see a lot more LinkedIn activity,” says Lauren Rudman, president of the Cleveland Society for Human Resource Management (SHRM). “LinkedIn is still the No. 1 way to go, but I’ve also seen job opportunities pop up on Twitter and Facebook.

“Word of mouth is still a great way to go if your company has a referral program. Between social media, specifically LinkedIn, and word of mouth, those are still the No. 1 and No. 2 ways that work for recruiters and talent acquisition teams.”

While companies are finding ways to recruit more talent, they are also very focused on retaining that top talent once they have it.

“We’ve seen a continued emphasis on things like workplace flexibility and investing in training and development as ways to retain employees,” Naso says. “They’re focusing on keeping their turnover numbers as low as possible.”

According to the survey, 77.7 percent of companies provide financial assistance to employees to upgrade their skills through advanced education or job-related training. In addition, 28.6 percent offer a mentoring program.

“Training and development is a big one, especially for some of the millennials (Generation Y),” Naso says. “They really are focused on learning and growing, so I’ve seen a lot more hiring of people that do training and development, creating leadership training programs and having a leadership track so these young professionals see a career path and aren’t looking outside the company for growth.”

Today, there are more training and development programs than there were in the recent past and there are a couple of things that factor into that.

“One is the economy,” Rudman says. “Unfortunately, when things go bad, training and development is the first thing to get cut. As the economy continues to get better, those will either come back into play or grow.

“Another big part of it, too, is Generation Y in the workplace. Generation Y wants development, training and to know how they’re doing. Companies need to recognize that in order to retain top talent they have to provide these resources like mentoring, coaching and development opportunities because they want it more than some of the generations in the past.”

According to the companies that responded to the survey, roughly 75 hours of training are provided to new-hires in their first 90 days. Another way more companies are incentivizing employees to stay at their current company is through workplace flexibility.

“That has been a huge trend,” Naso says. “There has been a study that mentioned that about 78 percent of U.S. workers are looking at workplace flexibility as a primary reason why they’re either staying where they’re at or making a move. That is as important to them as compensation.”

According to the 2013 survey, 44.3 percent of companies in Northeast Ohio are offering flextime, 14.8 percent are offering compressed workweeks, 17.2 percent offer telecommuting and 32 percent offer a work-from-home option.

“It’s interesting because workplace flexibility tends to be something a little different to each person,” Naso says. “We’re seeing companies trying to put things in place that provide a variety of options for employees. It depends on the type of job or their focus and how they can create that flexibility.”

While hiring and retaining employees remains the top challenge, the upcoming ACA and its pending changes to health care costs have companies anxious about what the result will be.

“One trend we are seeing that was published recently in one of the staffing industry magazines is that temporary staffing jobs hit a record high in May as companies are trying to lighten the burden of the whole Obamacare regulation,” Naso says. “Instead of adding staff, they are using contingent labor to manage some of that.”

In fact, according to the survey, the average percentage of the workforce that was temporary of the companies polled was 3.6 percent, the highest since 2006. The percentage of contingent workers in 2013 was 8.6 percent.

“In preparation (for the ACA), a lot of companies are attending conferences and meetings,” Naso says. “However, I haven’t seen any hard and fast actions yet. I haven’t seen companies that have actually reduced their part-time staff from 35 hours to 28 hours or anything like that. They’re all in that wait and see mode.”

Due to the uncertainty of the ACA, a lot of employers and companies are being proactive.

“We’re seeing companies bringing in wellness coaches, reimbursing employees for gym memberships and bringing healthy food into their organizations via vending machines or fresh produce stands,” Rudman says.

“Biometric screening is another big one. You see a lot of those efforts happening, which down the road can hopefully impact and decline health care costs for those companies, as well as employee’s out-of-pocket costs.”

The biggest decision looming for companies is whether they will “play” or “pay” with the ACA.

“Pay means that the company is not going to offer health care and they will pay the penalty, which is $2,000 per employee, and then those employees will be a part of the health care exchange that the government is offering,” Naso says.

“Play means a company will provide a health insurance plan that meets all the new government standards. Even companies that currently offer insurance could be affected because their current plan may not meet those requirements anymore.”

One of the requirements is that health care doesn’t cost an employee more than 9.5 percent of their salary. There is also a minimum coverage.

“Companies that currently have a plan could have increased expense because they may have to pay more of the premium or increase the amount of coverage, which increases the cost of the premium,” she says. “At the moment I have heard that more companies are going to play than pay. But it’s still a huge unknown.”

Despite what may result from the ACA, there is no doubt that companies in Northeast Ohio are once again flourishing and waving goodbye to the recession. Smart Business thanks ERC and those companies that participated in this year’s Workplace Practices Survey.

2013 ERC / Smart Business Workplace Practices Survey: In pursuit of a better workplace

Pat Perry, President, ERC

Pat Perry, President, ERC

Workplace practices and policies ranging from innovative flexible work arrangements to the debate over the Affordable Care Act (ACA) were topics of this year’s ERC/Smart Business Workplace Practices Survey. Watching the discussions around these events unfold serves to reinforce the fact that the decisions we make as employers have the ability to significantly impact the well-being of both our individual employees and our organizations.

Now in its 14th year, the 2013 survey collaboration between ERC and Smart Business aims to shed light onto how employers in the region are effectively applying these practices, enhancing their workplaces and ensuring that they retain their top performers and attract new talent in the region.

So, whether you are pursuing the latest innovative trend or simply looking to meet the basic needs of your workforce, you are likely doing so for largely the same reason as the vast majority of other organizations in the area — to overcome the challenge of attracting and retaining the best and brightest employees here in Northeast Ohio.

Below are a few hot topics from this year’s survey. Also included are a few suggestions about how each can be used to help attract and retain top talent at your organization.

Benefits

Organizations are increasingly expressing concerns about health care costs with 42.6 percent of manufacturers and 28 percent of non-manufacturers reporting that they are “unsure” whether they will “‘pay” or “play” when the new ACA regulations take effect.

Two-thirds of organizations are choosing to “play” and will continue to offer health insurance to their employees. With many unknowns still on the horizon, try to understand the drivers of these costs for your business and explore new ways to manage them in the long-term. Investing in wellness initiatives helps manage costs and still allows you to provide the benefits that are most important to your workforce.

Safety

Creating a physically safe work environment starts with putting specific policies on the books that will keep employees safe on a day-to-day basis. We’ve been fortunate to see very low rates of violence in the workplace in recent years among participating organizations, 77.5 percent of which prohibit firearms and other weapons. But safety isn’t always as cut-and-dry as having a policy in your handbook.

While violence has declined, incidents of bullying have actually risen to a high point of 19 percent in 2013. Creating an environment that encourages employees to speak out if they experience or see inappropriate behaviors can be challenging, but results in a healthier, safer workplace.

Work-life-balance

Respondents are making this popular concept into more than just a catchphrase. This year, flexible work arrangements rose to 68.9 percent — the highest level seen in the past 13 years. While we understand not every job is conducive to off-site work arrangements like telecommuting or work-from-home, even manufacturing organizations have some options. In fact, manufacturers in this year’s survey allow their employees some degree of flexibility with 34 percent allowing part-time schedules and 36.2 percent granting flextime.

Social Media

While social media use is seeing growth on the whole, the most prominent role it plays in organizations is in recruitment strategies. Half of respondents report using some type of social media tool for recruiting. But this year organizations made it abundantly clear that not all social media tools are created equally.

When it comes to finding the right employees, organizations appear to be taking their recruiting responsibilities more seriously, with 90.9 percent sticking to professional networking sites like LinkedIn. Facebook ranked second with only half that number of users at 45.5 percent.

Sincerest thanks to this year’s survey participants and to Smart Business magazine for 14 years of survey collaboration. In addition, we would like to acknowledge the NorthCoast 99 winners over the past 15 years (www.northcoast99.org) who also demonstrate excellence in the attraction and retention of top talent.

 

Pat Perry is president of ERC, Northeast Ohio’s largest organization dedicated to human resources and workplace programs, practices, training and consulting. Reach him at (440) 684-9700 or [email protected] For more information, visit www.ercnet.org.

Alan Jay Kaufman makes recruiting a top priority at Burns & Wilcox

Alan Jay Kaufman, chairman, president and CEO, Burns & Wilcox

Alan Jay Kaufman, chairman, president and CEO, Burns & Wilcox

Nobody in Alan Jay Kaufman’s field is looking for the insurance industry to develop the same professional glamour appeal as a movie star, professional athlete or international spy — but they are looking to get on the same recruitment footing with banking, finance and just about any other area of business.

The insurance industry is fighting that kind of an uphill battle. It’s primarily because college students, in many cases, don’t view insurance as an appealing career choice, which hinders the recruiting efforts of firms such as Burns & Wilcox, a 1,000-employee insurance brokerage, which Kaufman leads as chairman, president and CEO.

“The effort from our industry to go to universities looking for the best and brightest isn’t there,” Kaufman says. “It’s also not a profession that universities are encouraging people to go into. They think about banking, finance, marketing but not insurance. It’s not emphasized as a great opportunity or a great career.”

But without attracting, training and retaining great talent, a business in any field can’t hope to flourish. So Kaufman and his staff must swim against the recruiting current, challenge the preconceived notions about life in the insurance business and give bright, talented people reasons to want to come to work at Burns & Wilcox.

“That’s my biggest challenge,” Kaufman says. “We need to acquire the best and brightest talent that can take the company from one good level to the next higher level. And after you’ve acquired them, after you’ve trained them, you face the issue of retention. How do you retain the best talent you have so that you can continue to improve your team?”

It has required Kaufman to help spearhead recruitment efforts and formalize training programs, all with an eye toward making Burns & Wilcox not just an attractive place to work but an ideal place to build a career.

Find your selling points

To understand how your company can best appeal to potential employees, you have to understand what sets your company apart from the competition. You have to know what you can uniquely offer to the people you recruit.

If you are aiming to hire young talent, as is the case at Burns & Wilcox, you have to develop programs and facilitate opportunities that appeal to recent college graduates who are mobile, both in a geographic sense and corporate-ladder sense. Young employees value career advancement, and many of them also value the opportunity to live in different areas of the country and world before settling down.

It’s something Kaufman and his HR staff have carefully considered as they have built their company’s recruitment and training programs.

“The recruits we’ve brought in have been impressed with our training, that we have a course that helps them get their careers off the ground,” Kaufman says. “We can move them around to different regions. They can spend some time here in our corporate headquarters in Michigan, and we can move them to different offices where we have training programs operating. They can understand how the office in Atlanta works versus the office in Dallas or Los Angeles.”

Not every office in the Burns & Wilcox system is set up for training but enough are equipped with training staff and capabilities so that a newly recruited employee has an opportunity to experience living in different cities and learn about the work environment in various company offices.

Kaufman and his team have developed the company’s recruitment and training platform, in part, by observing the competition and analyzing the holes that competitors weren’t filling in the recruitment game.

“We don’t necessarily react to what the competition is doing, but we do certainly pay attention to it,” Kaufman says. “We’ve realized, for example, that our competition has been more focused on compensation, as opposed to training and career advancement.

“I believe that the right leaders are going to realize that compensation is important, but training and providing promotion opportunities is more important to career advancement. We do meet the competition as far as compensation is concerned, so I’m not trying to undermine the fact that compensation is important, but the education and training aspect is critical.

“I’d like to see more of our competitors in the industry implement some programs for advanced training. It would be better for us and better for the industry. I consider it a weapon in our arsenal, but it’s not a secret weapon.”

Build a training program

To sell recruits on your company’s ability to advance their careers, you must develop a comprehensive and formalized training program that lays out a process for how your company can help its employees achieve their career goals.

At Burns & Wilcox, the company formalized its training program under the acronym KELP — the Kaufman Emerging Leadership Program, which is administered by Burns & Wilcox’s parent company, Kaufman Financial Group.

“We formalized the program to a greater degree by actually hiring a recruiter internally, just for university graduates, just for the program,” Kaufman says. “We have one person on staff who is devoted to that. That’s all she does. We’re constantly trying to improve our formal approach through the KELP program and other programs that we have. That’s one way we have of searching for the best talent — and I emphasize ‘best,’ because it’s not just a matter of hiring people. We need people who fit the insurance culture, who will embody the best aspects of our company.”

Employees in the KELP program have usually graduated college within the previous five years. The three-year program is selective, with approximately 30 people gaining admission each year.

“We hire many people with the hope that they’ll get into the program, because it’s not guaranteed that they’ll get entrance into the program,” Kaufman says. “We first hire them, then after a period of time — maybe six months to a year working for us — they can potentially get entry into the program.”

But the size of a training program is less important than its quality, measured in the success rate of its graduates. A successful training program is usually successful because the leadership of the company committed resources to it and made it an organizationwide priority.

To build great leaders, they need to be taught by great teachers who understand the principles of effective leadership and how those principles fit into your company’s culture.

“It certainly has to start off with the right leadership in the training program, and the company has to put that on the list of priorities,” Kaufman says. “You can’t have an internal program without the support of the senior executives and management, which is why we always try to involve the best leaders in our company in the implementation of the training program.

“For two weeks, we bring our best leaders into the program, people who work in various disciplines throughout the company — whether it be underwriting, brokerage, property, professional liability or any other area. Without the support of those people, the program wouldn’t be successful, and the company wouldn’t be as successful.

“If you look at the people in our company, the people who have historically been the most successful are the people we have trained.”

And that training has to be open to all areas of the company. You might have certain departments that you view as more essential to your company’s success than others, but the next great leader could emerge from a department that’s on the edge of your radar screen.

“Open your training to people in every area,” Kaufman says. “Our training program also includes assistant underwriters and other people through all levels of the company. It’s across the board because you can’t just train certain individuals. You need to have a macro approach. And that goes back to having someone on staff who is entirely devoted to training on an ongoing basis.”

Consider other factors

Your recruiting efforts can get talented employees in the door, and your training programs and compensation packages can get them to accept the job. But once you have them, how do you keep them? That is a question with a multipart answer that involves additional factors, including the work environment, networking opportunities and the way in which the job contributes to — or detracts from — quality of life.

“There is not a magic formula, but those items are all part of the formula,” Kaufman says. “How you balance it and mix it is an ongoing process. It’s never perfectly right, so you just have to keep looking at the ingredients.”

It’s why Kaufman makes it a point to personally keep his finger on the recruiting pulse of Burns & Wilcox. He empowers his HR staff to do their jobs but remains in tune with the company’s ongoing recruiting efforts.

“I participate in recruitment and the interviewing process,” he says. “I interview hundreds of people a year and certainly anyone on the management level. And I expect that standard of other people in our regional offices. You need to maintain a strong leadership team that works together and comes to a consensus on what to do. You want a consistent approach.”

How to reach: Burns & Wilcox, (248) 932-9000 or www.burnsandwilcox.com

The Kaufman file

Alan Jay Kaufman

chairman, president and CEO

Burns & Wilcox

What is the best business lesson you’ve learned? The lesson I learned from my father (Kaufman Financial Group founder Herbert W. Kaufman) about his door being open to anybody. You didn’t have to go through different layers to get to him. That is the way I am, and I encourage my executives to be the same way. If you want to know something, you have to go right to the source, and with our management style, you can talk to anyone in the company — and our employees do that. Regardless of your size, you want your company to keep that part of the culture, keep that feeling that people can talk to anyone.

What traits or skills are essential for a leader? Humility, honesty and hard work. That, and you have to lead by example. I can’t expect someone else to work hard if I’m not working hard. I set the pace for everyone, and I expect, from my level on down, to keep that pace. As an example, I expect everybody — clients, insurance brokers, agents — to understand our history and what we’re selling.

What is your definition of success? The quality of the team around you. The better the team you have, the more it will be able to carry you through thick and thin. A company isn’t one or two people; it’s the total team. A great team leads to success — it’s true in business, it’s true in government, just as it is in athletics.

Takeaways

Sell recruits on your company.

Build a strong recruitment strategy.

Formalize your training program.

How to select a professional staffing firm to assist with the hiring process

Heidi Hoyt, managing director, Skoda Minotti Professional Staffing

Heidi Hoyt, managing director, Skoda Minotti Professional Staffing

A professional staffing company can find candidates who are a better fit for your company, and speed up your hiring process.

“The key is to select a staffing company that is a specialist in the area you’re recruiting. They need to understand your company and its culture,” says Heidi Hoyt, managing director at Skoda Minotti Professional Staffing.

Smart Business spoke with Hoyt about the benefits of using a professional staffing firm and how to find the right one.

Why use a professional staffing company for hiring?

A company’s HR person is likely to be a generalist. The greatest advantage in using professional staffing firms is the invaluable industry expertise they possess.  A staffing firm will provide access to candidates that a company wouldn’t reach on its own. They are well-connected in their specific field, whether that’s financial or another industry, and they are always talking to passive candidates as well as those actively seeking employment. You want access to passive candidates, not just the people who are on the job boards.

Professional staffing firms also have a broad knowledge of what other companies in an industry are doing, which adds value. They’ll have technical experts in accounting and finance, for example, and will be able to identify candidates and look for intangibles that would go unnoticed without their accounting background.

Another advantage: Professional staffing firms weed out lesser-qualified candidates, which saves a company time and money. Instead of having to review 100 resumes, a client receives a select few that have been pre-screened and are right for the position. That service drastically shortens the hiring process, sometimes by weeks. If the staffing firm is doing its job correctly, it’s only sending highly qualified candidates for review, so that all the client has to do is pick the person who’s the best fit.

How does a staffing firm evaluate candidates?

Candidates might have similar education and experience, but a staffing professional will look for other items on applicants’ resumes that differentiate. For example, they might look at past employers — they know what types of candidates those companies hire. They know that XYZ company is a demanding place to work; that it hires strong people who excel even within a tough environment. The staffing professional will also dig into work histories, and it will carry more weight if someone was promoted regularly at XYZ company, because it’s known to holds its employees to high standards and exceptional work performance.

What criteria should companies consider when selecting a professional staffing firm?

Pick a firm that specializes in your area of need; that goes back to having professionals on hand who understand the nuances of the industry within which you’re conducting the search. If they’re specialized, they will be even more connected to the specific pool of candidates that you are targeting.

Also look at reputation and how well recognized the company is within the field from which you’re seeking a candidate, and within the staffing industry overall. That will help you select a firm that will consider your company’s culture and evaluate candidates from a behavioral standpoint in additional to their skills.

Most companies hire people with whom they have a connection, and who will be a good fit within a company’s culture, even if they lack some of the specific hard skills listed in the job description. It’s important to find a staffing firm that looks beyond education and job description specifics — one that sees the position from an all-encompassing perspective. You might have an accounting department comprised of ‘Type-A’ personalities and an HR department that’s a bit softer. It’s important that the firm you select understands the culture of the department and the company to ensure the right fit overall.

Heidi Hoyt is managing director at Skoda Minotti Professional Staffing. Reach her at (440) 605-7227 or [email protected]

Insights Accounting & Consulting is brought to you by Skoda Minotti

 

Fred Potthoff grows Kroff Inc. through hiring motivationally fit talent in his business

Fred Potthoff, Co-Founder and Co=Owner, Kroff Inc.

Fred Potthoff, Co-Founder and Co-Owner, Kroff Inc.

Twenty-five years ago, Fred Potthoff and his partner took out a $300,000 line of credit to start their own company. Potthoff backed his half by putting up his house and his retirement savings, and from that moment, it was a race against time to see if he and his partner could sell enough before running out of money.

Fast forward to today, and the company they started, Kroff Inc., a leading water and wastewater treatment and recycling services company, has more than 80 employees, eight different businesses under the Kroff name and annual revenue of more than $50 million. Potthoff’s entrepreneurial gamble paid off, and today, he isn’t stressed about making enough money to survive but rather about finding the right talent to keep the company at the top of its game.

“We are a bottom-up run organization, and we go by the philosophy of hiring bright, creative, entrepreneurial people and giving them the right tools. Then we get out of their way to let them flourish,” Potthoff says.

Even with the company’s eight different businesses, Potthoff has remained an integral part of its hiring process and ensuring that great talent enters the company.

“Some people are surprised when they talk to me first, second or third in the organization as one of the original owners,” Potthoff says. “I tell them, ‘This is the single most important thing that I do in the course of my workweek or month.’”

Since Kroff’s inception in 1988, the company has experienced an average of 24 percent growth every year. The attention to his company’s hiring process, which he calls motivational fit, is what Potthoff focuses on to make sure Kroff Inc. will continue to grow.

Here is how Potthoff hires the best available talent.

 

Find the best fit

Kroff Inc. has seen some incredible growth over the years and that success is a direct result of the people Potthoff has been able to hire. In fact, each of the organization’s eight businesses started with ideas from sales associates.

“Aside from the original company, my partner and I didn’t come up with any of the other ideas,” Potthoff says. “It was people in our organization coming to us and us listening to them and running with that idea.”

When Potthoff interviews candidates, he is interested in trying to spark that kind of enthusiasm and interest in the company.

“It doesn’t mean that everybody who comes here is going to run their own company, but it’s part of our culture,” he says. “People who fit in well here think that way and look for opportunities. When we interview, the key is looking for that kind of person, so we’ve all been trained in behavioral interviewing and that’s an important component of trying to identify the right person.”

Behavioral interviewing is a key component at Kroff because when the company was first started, Potthoff put a lot of stock into resumes and conventional interviewing. While resumes can provide wonderful statistics about how much somebody sold or how many new accounts they created and a lot of facts and figures, they aren’t as effective at finding the best fit as behavioral interviewing.

“In behavioral interviewing, you get into specific examples and you try to drill down and mine for a number of examples where they’ve shown an attribute in the past,” Potthoff says. “If they say they have an entrepreneurial bent, you say, ‘Give me an example of when you demonstrated this in your past job.’

“Whatever the attribute is, we want specific examples where they’ve done it before and they can tell us a clear story about why they have that talent and where they manifested it.

“It’s a more difficult interview process because often they have to think and dig down to find an example, but that’s what you want. Then you know you’re getting the right person if they can give you a lot of examples where they have demonstrated this capability before.”

While this technique of interviewing has resulted in strong employees for Kroff, it isn’t without its drawbacks.

“Behavioral interviewing is a challenge; you have to sit and wait sometimes for the person to think of examples because you want them to give you very specific, very concrete examples,” he says. “So the interviewing process takes a little patience whenever the candidate is in front of you.”

In Kroff’s case, the company hires a lot of sales engineers, and one of the first challenges is finding an outstanding chemical engineer who wants to have a career in sales.

“Sometimes it’s mixing oil and water, and we’re often looking for personality attributes that aren’t in one person,” he says.

Another challenge is where to find the best talent. The best candidates may be the passive candidates, not the ones shopping their resume around.

“They are the ones who are successful who are doing a great job wherever they are,” Potthoff says. “To try to get their attention sometimes is difficult.”

The third thing Kroff does to find good talent is to check references or see if someone has worked with that person before.

“If you depend on the interview process and the resume, it’s more of a crapshoot,” he says. “If you can find somebody in your organization or get references from reliable people who have worked with the person, then your chance of having success with that person is greater.”

To overcome these challenges and have help in the search process for talented employees, Kroff often utilizes the services of recruiters.

“We’ve picked two or three that we work with and we bring them in to our office and try to educate them to make sure they understand exactly what we’re looking for, because when you’re dealing with recruiters, they’ll often throw resumes at you in hopes you’re going to hire somebody,” he says.

“It is important to invest some time with the recruiter and say, ‘This is exactly what we’re looking for, and don’t send us anybody else.’”

 

Translate talent into success

While a company’s success can benefit greatly from its products or services, Potthoff believes his hiring techniques and the talent he has been able to bring in are the true difference makers.

“You can have the best products in the world and you can have the best computer software and order entry, but it really comes down to quality people,” Potthoff says. “The key component of our success is that we’ve been very fortunate for the most part in hiring great people.”

Another key component of Kroff’s success has been that Potthoff has done a good job of listening to ideas.

“It’s one thing to give lip service to somebody, but if somebody comes to you with a good, creative idea, you can’t summarily dismiss it because maybe you tried it before or it seems a little harebrained,” he says. “You have to be willing to listen and trust the people, and if you think it’s a great idea, be willing to move and invest in it. When you do that, the culture responds to it.”

A lack of listening is one of the biggest mistakes many companies make.

“I don’t think many companies listen well enough to the people in the field who have their fingers on the pulse,” Potthoff says. “If you’ve hired the right people, they’re closer to the action and the opportunities than somebody sitting up in a corporate office somewhere.

“I’ve seen it in the past where some vice president comes up with an idea about what market the company should go after. It may be a brilliant idea, but oftentimes, it’s not. I think you are better served by getting intelligent, creative people and listening to them when they come to you with a market opportunity, because they’re in a better position in a lot of ways to see opportunities.”

To incorporate this kind of thinking into your organization you have to make the behavior part of your company’s culture.

“View company meetings and company culture as a meritocracy, which is the way we look at it,” he says. “In other words, if we are in a manager’s meeting, I set the tone for the meeting. It’s not myself and my business partner pontificating about where the company is headed and what we’re going to do.

“When you present ideas, everybody has to chime in with what they think the best idea is, and we will hash it out here and the best idea will rise to the top.”

This mentality is an easy thing to say, but it’s a hard thing to accept because you have to set your ego aside and listen to comments and criticism.

“That’s where some entrepreneurs and business owners go array because they are so vested in the company,” Potthoff says. “The way they got the company off the ground is the right way to do it, and it’s hard for them sometimes to hear somebody criticize it. It is vital to stay vibrant and alive, so you have to listen to the new people that you bring in.” ●

How to reach: Kroff Inc., (412) 321-9800 or www.kroff.com  

 

Takeaways:

Be involved in the hiring process.

Utilize resources to help you find the best talent.

Once you have the talent use it to grow your business.

 

The Potthoff File

 

Fred Potthoff

Co-founder and co-owner

Kroff Inc.

 

Born: Latrobe, Pa.

Education: He attended Shippensburg University and got a bachelor of science degree in business.

 

What was your very first job?

I was a lifeguard in the town of Latrobe. It was a great summer job.

 

What is some business advice you would give to others?

The bulk of my time in business has been in specialty chemical sales … and if you graphed how much time I spend listening and how much time I spend talking, I probably listen 75 percent of the time and talk 25 percent of the time. For anybody in business, that is a good ratio. You can learn a lot more and get a lot more accomplished if you use that ratio to build your business and career.

 

Who do you admire in business?

Andrew Carnegie.

 

If you could have a conversation with someone from the past or present, who would you want to speak with?

I’m a history buff, so there are a lot of people that I’ve read about over the years that I’m intrigued with. Out of the Founding Fathers, I think the most fascinating person to speak with would be Thomas Jefferson. I think he is one of the most brilliant people that I have ever read about, and how fortunate we were to have him as one of the founding fathers.

 

What are you looking forward to in the future of your business?

What excites me now and what motivates me is watching people underneath me do well personally and professionally.