Employee Management

employeesEmployees are both the best and worst part of running a business. Managing your employees might be the greatest challenge you face as an entrepreneur. The transition from employee to employer is a big change. Not only are you responsible for your own work and welfare, suddenly you have to get the best from others and ensure they can depend on you. If you have had bad experiences with employees in the past, you might be unwilling to hire people to help you run your business, but doing this severely limits your ability to create the business you want. You can’t expand. You can never transition to an absentee-owner because you have to work every day. In short, your business will be stagnant. Since you need employees, Aaron can help you figure out the best ways to hire and manage them.

employees2Start by looking as employees as an asset. They permit your business to succeed and grow, they allow you to take time off. Because of the profound way your employees affect your business, the investment of time and money in this area is invaluable. If you hire the right employees, you actually relieve your stress. Your employees help make your business good or bad. Trial and error is helpful but it is more than worthwhile to learn techniques for managing your employees – from broad-spectrum questions like the laws of benefits to specifics like how to talk to someone who takes personal calls excessively. If you are having employee issues, you can probably benefit from our expertise in management techniques.

First, think about your attitude toward your employees. Aaron believes that the healthiest employee management model involves making the best business decisions to ensure that your employees have a job to go to every day. This might mean they are unhappy some of the time, but in the long run it will benefit both them and your business. Yes, you do want happy employees but you need to run a business first and foremost. Never feel like you are held hostage by your employees. If someone keeps screwing up and you have tried to correct them to no avail, be willing to fire them. You need employees, but it is unlikely you need any particular person. For most jobs, many different people can perform well. What you need is a system at your business that permits any person doing the job to do it very well. You don’t need irreplaceable employees.

However, you probably cannot make your business so systemized that the caliber of the employees really doesn’t matter. You still need good employees – just not irreplaceable ones. To get good workers, you have to pay a good wage. You need to consider two factors when setting pay. How much skill is required to perform the job you need done? The more skill is required, the more you will have to pay. The other crucial factor is employee turnover. Hiring new people requires time, energy, and money. You don’t want high employee turnover and the way to avoid this is by paying a good wage. What is a good wage? Well, it is usually at or above the market rate for your industry, in your location. You determine the market rate based on talking to others in the industry, research, and your own experiences. For example, if you have hired several bookkeepers for $20/hour that didn’t work out and one for $25/hour that did, you could conclude that the market rate is $25/hour.

employees3If you constantly feel like your employees let you down, you might need to lower your expectations. People are inherently imperfect and they bring drama and emotion to the workplace. That’s just part of being human. Unless you intend to employ robots, you’re going to have human problems. Be realistic – bear in mind that lower wage jobs are likely to attract less desirable employees. That’s just the way it is – you can’t expect all that much from someone who’s making $10 an hour, even if that is the right rate of pay. You can’t control your employees all the time, so you have to learn to trust them. Unless you do this, you will never be comfortable leaving them to run your business. Hire good people, pay the right rate, train them properly, then let them do their jobs.

As a business with customers, you also need to figure out which of your employees will interact with those customers. For those that do, there are three components they must possess – friendliness, cleanliness, and language ability. Ensure that anyone who interacts with your customers is friendly to them, looks tidy and clean, and speaks their language fluently. Once all the employees you have interacting with customers set, do not let other types of employees take over their jobs.

How do you go about hiring the right employees? A typical job interview is an indicator of job performance only 15% of the time. We will teach you a four-step process that is a much more effective way of finding good employees. First, look carefully at their resume. Make sure they have the minimum requirements for a job and be careful with anyone with a gap of six months or more in employment. Then, call their references – before the interview. Third, you might try a test or simulation – have the potential employee do what they will be doing in their job. A simulation might be excessive for a small business, but testing is feasible for almost everyone. Once you have gone through these three steps, you should have a pretty good idea of who would be a good employee. Then you use the interview to confirm or deny this impression. If someone is wrong for the job, be ready to fire them promptly. A bad fit hurts the employee and your business.

Where do you find potential employees? Try your local high school or college. Look at your competitor’s employees. Talk to your own employees about people they know. Advertise on and with your local newspaper. Once you hire employees, be firm and fair with them. You don’t want to go to extremes either as an employee’s best friend or as the enemy. Make and enforce reasonable rules, pay your employees regularly, help them when it is feasible, and provide them with the tools and equipment they need to do the job well. Train all your employees according to a set system, preferably with manuals. Make sure everyone knows how their job should be done. Put incentive programs in place to encourage employees – bonuses, positive feedback, awards, and promotions.

Employees both complicate your business and make its success possible. If you are dissatisfied with your employees or are dealing with them for the first time, our team can help you. Aaron has employed hundreds of people over the years and dealt with all parts of employment – search, hiring, benefits, incentives, and firing. Circumvent potential problems with employees by getting it right from the start.