Hiring

Hiring is expensive! For each hire your business makes, valuable resources like time, energy and money are dedicated to the effort. But hiring isn't simply an expense, it's an investment. Because each employee produces returns for your business, it is important that you attract and select qualified and talented candidates to fill your job openings.

You can make cost effective hiring choices for your business by using an efficient process and a defined set of standards. The information below highlights how to implement or improve your business's hiring process.

The first step is to understand the needs of your business and its customers. If there is more work than you and your colleagues can adequately accomplish, you will need additional people to conduct work activities for your business. But before you settle on hiring more employees answer the following questions:

Is this job really necessary for my business?

If the position already exists, determine how much of that person's responsibilities are still needed. Can those work activities be absorbed by other workers? Or, can current workers be trained (through skills development or education) to do this job? If it's a new position, think about the type of worker that can fulfill these responsibilities. There are various options you can consider to fill you business's employment needs. Consider the employee types below:

Full-time employees

An individual who works a set/standard number of hours and often receives additional benefits like health, dental and life insurance coverage along with a salary.

Part-time employees

Hiring one or more part-time employees instead of one or more full-time employee may be to your benefit. Though you may have to spend extra time training in more people, you may enjoy extra flexibility and pay less in benefit coverage and wages.

Temporary employees

Temporary agencies can save you time because they find workers to fill your job openings for you. However, these agencies usually charge a fee for providing this service. A listing of temporary agencies can be found in a telephone book or online telephone directory.

Employee leasing

Much like temporary agencies, employee leasing agencies find workers to fill job opening for businesses. The biggest difference is that leasing agencies also manage the human resources role for the employees; meaning that they assume, among other things, the responsibility for paying and providing benefits to employees. However, the leasing agency staff size is often large enough to reduce overall costs for businesses who hire employees through them.

Independent contractors

Contractors usually provide work on a project-by-project basis where fees for work performed are negotiated in advance. Employers do not need to pay taxes and benefits to contractors as they do with regular full-time employees, however contractors have considerable autonomy compared to regular full-time employees in that they perform their work as they see fit.

What is the nature of the work this person will be conducting?

Decide what work the new employees will perform and use this information to create a job description. A job description, also known as a job profile, defines the position you are trying to fill. It should include the following:

A position or job title
A concise statement highlighting the job's purpose
Major duties, responsibilities and expectations
Organizational reporting structure and relationships. Who does this person report to and who reports to them?
Qualifications for job success that include essential skills, knowledge, abilities, and experiences. This includes license, degree, diploma, certificate or training specifications.

How should you review applicant information that is submitted?

There are a variety of ways to do this. Early in the hiring process you will want to know the approximate number of people you want to interview and try to downsize your applicant pool to that number. Use the job description you have written for the job opening to identify the qualifications that you expect and others that you prefer.

Prioritize your expectations and preferences so you can easily refer to them and see them in their order of importance. A simple scan of applications, resumes and cover letters will help you eliminate individuals who don't possess the things that you absolutely need.

Then look for key words and phrases that illustrate a proactive approach to work efforts and highlight the qualifications you are looking for. Compare the candidates' attributes with your list of prioritized qualifications until you have an acceptable number of candidates.

What should you ask at the interview?

The interview is the key opportunity to see if a candidate is a good fit for a job opening. It's your chance to ask for clarification regarding the contents of their application and to request more detailed information about past work experience and other subjects of your choice.

Some employers also test a candidate's skill in a particular area with a drill of some kind. But it's most important to get a sense of how prior work experiences and education planning have prepared a candidate to fulfill the job responsibilities you need filled.

So ask questions that will be both informational (i.e. What were your job responsibilities in your last job?) and situational (i.e. When confronted with a difficult boss, what did you do?). Be cautious though. It is not legal to ask certain questions that ask individuals to define things like sex, age, religion, marital or parental status.

For more information about what is and is not legal, visit Key Questions - Legal Interview Questions or contact the Minnesota Department of Human Rights by calling 1(800) 657-3704.

How do you negotiate a hire?

You may not be able to afford some of the higher salaries requested by candidates. Think about how much you can reasonably afford to pay a new worker, and based on the work responsibilities of the job opening, select a pay range you can afford. Calculate how much you expect to pay for that worker's taxes, benefits, life insurance and retirement plans and deduct those costs so you know exactly how much money remains for their salary.

Then select a short list of candidates in the order you would offer the position to them and make an offer somewhere within your range to the person at the top of your list. Having a range in mind helps you to make an offer with room to negotiate a salary that works for both your business and the employee.

What do you do after you hire a new employee?

It depends on what type of employee you are hiring and how much of the Human Resource (HR) paperwork you are handling internally. If you are hiring a full-time, part-time or temporary employees, you will need to fill the proper forms regarding state and federal taxation.

If you are bringing a contractor on board, you will need to get a contract in place. If you are leasing an employee, most if not all of the HR functions will be taken care of by another agency. But in most cases, you will want an employee orientation so new employees have basic information about the mission and vision of your business.

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Employer Solutions, Inc. is an organization with the resources to connect you to a network of business advisors who understand unique business needs and challenges facing small Minnesota businesses. Contact Janet Ludden with Employer Solutions, Inc. at (651) 917-4204 if you would like assistance with the information on this page or other hiring practices.

Source: The Minnesota Employer's Guide to Successful Hiring, 2003, Employer Solutions, Inc.
Page last updated in May 2004.