One of the most frustrating aspects of being a business owner is hiring people. It may feel like you are getting the right person during the interview, but 20% to 25% of the time even the interview will not be enough to guarantee that you have managed to attract the best employees for the positions filled in your firm. Obviously, that statistic is an estimate, and it can increase or decrease depending on certain variables.
Variables That Can Determine Successfully Hiring An Employee
Some of the most obvious variables when hiring an employee are salary and benefits. The better both of these are, the more likely it is that you will hire someone that is capable of taking on the role you need to fill. At the end of the day, you want to attract the best employees for your business.
Salary: It goes without saying. Salary is almost always going to be the first thing people look at. If the job is paying below the market rate, then you will have to hope that your interview process is fine-tuned in order to dig out a bargain. If you are willing to pay more, then you are going to attract people with gleaming work records, good references, and lots of experience.
The old saying goes that you get what you pay for. If the market rate for an accountant to fill your position is $40,000 a year, and you are offering $30,000, then you need a pretty good reason why you are offering such a low rate. It could be the area the business is situated, the workforce available, or the fact that the benefits outweigh the $10,000 pay cut, which means the benefits would have to be pretty amazing, to say the least.
Check out this blog on entrepreneur.com about how to set salaries.
Benefits: Sometimes salary is not everything. Someone could be looking for a salary plus medical insurance with a pension scheme on top. They could be willing to take a lesser salary because the benefits outweigh the costs involved with medical, dental, and pension premiums versus a higher paid salary. Benefits can certainly play a large part in landing an experienced person to fill the job position you are advertising.
In countries like the USA where people expect medical and dental insurance along with their salary, it is the level of medical insurance that will be selling point here. The difference between $10,000 coverage and $500,000 is a huge selling point. Some companies will extend medical insurance benefits to also cover family members.
A great article was written here on Forbes.com about How Much Are Your Benefits Really Worth?
Company Car: Offering a company car or car allowance is always a bonus. Some people may not want to fork out on a new car and the fact that your position offers a company car is a major selling point. The person could sell their current vehicle or have a family member that needs a car and by having a company car it means there is no need to purchase a new car. The old car can be handed to the other family member.
Quite often, a company car can help to reduce the benefits or the salary or could be used as an added bonus. For instance, if your business already owns the company car, then adding this to the package to reduce the salary by say $3,000 to $5,000 a year could save your business money. Especially the car is worth more than $10,000.
On the other hand, it could be that your business is already offering a good rate and adds the company on top as an added bonus to attract more highly qualified individuals to apply for the role.
For information on the best company car fleet deals take a look at keppler.co.nz.
Company Phone and Laptop: If your workers are expected to work offsite, then asking them to provide their own laptop is often quite off-putting. The idea of hiring someone is to employ someone with high self-esteem that is going to fill the role with confidence. Obviously, this depends on how business critical the role is. As a result, asking them to provide their own phone and laptop would send alarm bells ringing in most people’s heads.
I mean what company cannot afford a laptop or a mobile phone. After all, these are all tax deductible in most countries. All this attitude shows is a lack of commitment to employees and their well-being. Sorry if you are reading this and your company exercises this policy. If this is the case, then ask yourself if the company culture in your business is positive or negative.
Is there a high turnover of employees? Are the employees happy? In most cases, a business that cuts back on the simple things suffers from negative company culture, high employee turnover, and in general an unhappy workforce.
Read on Investopedia.com how company culture affects your bottom line.
When you are looking to hire new employees, your employment process will determine the success of your business. Rewarding employees for a job well done and having a structured pay rise and promotion system will help you fill positions from within the company. Also, offering the right mix of salary, benefits, company car, and other perks will help you hire people that are going to help give you a return on your investment. For example, if you hire someone for $30,000 a year for a job worth $40,000, what is their productivity going to be like?
On the contrary, you could hire someone for $40,000 and their productivity is 50% more than the person being paid $30,000 for the same job. Your ROI for an additional $10,000 is theoretically helping your business increase its bottom line. Make sure that you are fully up to date on the salaries your competitors are paying too. You do not want them to poach people like account managers who could easily take your existing customers away because the person has built a rapport with the client.
Last of all, never undervalue or overlook those performing well for your business. They deserve additional bonuses, pay rises, and even promotion. Others in the company will see how that person’s hard-working attitude has been rewarded, and as such, this should encourage them to work harder to make your business a success and in return, they will know they will be rewarded for their efforts.