Posted by Robert Half Finance & Accounting on Wednesday, March 29, 2017 - 11:45 | Follow me
Have you ever made a bad hire? Then you probably know how disruptive it can be to your small business to have something go wrong with your hiring process, draining you of time, adding stress — and more.
In a new Robert Half survey, 81 percent of the small and midsize business owners and managers said they’d made a bad hire. Nearly half (49 percent) said most managers underestimate the complexity of hiring, and 65 percent cited problems with their hiring process.
Why you need a strong hiring process
The study shows the following results of a bad hire:
- Increased stress on the manager
- Increased stress on the team
- Time wasted hiring and training someone else
- Decreased confidence in management to make good hiring decisions
Respondents estimated 45 hours were wasted on hiring and onboarding people who ultimately did not work out, and correcting mistakes took even longer. More than half (58 percent) of the business owners said it took less than a month to realize they made a bad hiring decision, and it took more than twice that time — 8.8 weeks — to let the person go. Then it took almost five more weeks before a replacement could start work, with 68 percent of businesses putting the workload on existing staff during this time.
Do's and don'ts for the hiring process
Managers can make sure proper attention is given to the hiring process by following this advice:
- Don’t go it alone in the hiring process.
Do tap colleagues for their thoughts on needed attributes and competencies for the open role, and work with a specialized recruiting firm to find the best candidates.
Learn more about how recruitment agencies can save you time and money in the hiring process.
- Don’t think the web has all the answers.
Do cultivate a talent pipeline by personally reaching out to your network and recruiting sources. Online tools can be valuable, but personal interaction is the most important aspect of the hiring process.
Check out these 6 Tips to Overcome Recruitment Challenges and Start Hiring.
- Don’t take too long to hire.
Do extend an offer once you identify your top candidate. Companies that don't move quickly risk losing good people to other opportunities.
Find out how long it takes to fill finance positions with this Robert Half Finance & Accounting survey: The Hiring Clock is Ticking.
- Don’t offer a salary that's too low.
Do offer a compensation package that, at a minimum, meets the market standard. Stay current on prevailing trends by reviewing resources such as our annual study of accounting and finance industry salaries, ranging from general accountant to chief financial officer, with hundreds of other finance jobs included.
Take a close at Robert Half’s Salary Guide for Accounting and Finance now.
- Don’t fail to identify the skills you need.
Do differentiate between must-have and nice-to have attributes, including soft skills, and pinpoint the skill sets that are mandatory and those that can be developed. The goal is to hire the person who is the best match for the job and your work environment.
Read the blog post: How to Hire Employees Who Make a Perfect Fit.
Checklist for a strong hiring process
You can create a hiring process checklist that works for your company, with these eight items:
1. Spot-on job descriptions
To get the applicants you want, include the right criteria in your job postings. Start by writing an airtight job description: requisite skills, preferred background and certifications, a list of soft skills necessary for the position and so on. The more you can discourage unsuitable applicants from applying, the smaller but stronger your applicant pool will be.
Find out how stellar job descriptions can be the secret to making great hires.
2. Expansive reach
Don’t depend entirely on social media to post your job openings. Cast a wide net and augment your efforts by tapping your networks and employees as a resource. You might find highly skilled workers who are not actively seeking work but would jump at the right position if it came along. Be a hunter, not a gatherer!
See the results of another survey: When It Comes to Hiring, Wait for Resumes or Cast a Wide Net?
3. Vigorous evaluation process
To reduce the chances of making hiring mistakes, make sure you have a strong process to vet the applicants in an effort to keep your top candidates on the short list. The evaluation process starts with scanning cover letters and resumes for red flags, namely poor grammar, typos, excessive job-hopping, unaccounted for employment dates and inappropriate humor. Don’t automatically dismiss candidates with a break in their work history, however. If they are otherwise well suited for the position, ask them during the next step about resume gaps you’ve uncovered.
4. Effective phone screening
A 10- or 15-minute phone interview is a good way to further pare down the list of candidates and weed out possible bad hires. Eliminate the ones who look good on paper but don’t have the communication skills for the role.
5. Top-notch interview
Now that you’ve whittled down your list to the top three to five candidates, it’s time to bring them in. There are two main components to the in-person interview: the right questions and the right set of interviewers. Invite colleagues who can help you judge the technical skills of the applicants as well as those who can evaluate their soft skills, such as communication and presentation. Listen for candidates’ level of enthusiasm: Technically brilliant applicants who are lackluster about the position or your company may seek employment elsewhere shortly after they’re hired.
Also assess their personality when they’re not “on.” A great way to do that is to solicit feedback from staff members who were not in the meeting room, or from your receptionist. If candidates aced the interview but were rude to other employees, strike them from your list.
6. Emphasis on your company
During your communications, remember to sell your company, too. Even if you're a small company, you offer advantages, such as the potential to advance quickly in your organization, the opportunity for skills development, innovation and flexibility, unique projects, non-financial perks, or a less-formal work environment.
7. Reference checks
Though you want to act fast and land your top pick before someone else beats you with a job offer, due diligence is the key to avoiding the high costs of a hiring mistake — and that includes reference checking. While it’s not always easy to obtain a candid reference from a former employer, doing so is an important step to take before hiring someone for your firm. Ask each finalist for the names and contact info of three to five professional references. Then take the time to contact each one, preferably by phone.
8. Background checks
Just as reference checks allow you to verify with former employers a potential hire’s accomplishments and personal attributes, background checks delve into additional aspects of a candidate’s activities and behavior in an effort to reveal issues that could affect future job performance. These pre-employment checks can pick up troubling issues with applicants’ credit history or criminal background, a serious consideration for work in accounting and finance.
Unfortunately, many types of background checks are subject to considerable restrictions, both legal and logistical. An employer must determine what, if any, measures are needed based on the nature of the business and the position. If you decide in favor of conducting checks, choose a reliable third-party investigator and seek legal counsel to make sure you gather and use this information lawfully.
Bonus: Enlist a specialized recruiting agency
There’s a whole host of reasons an outside resource can come to the rescue with your small business hiring. A good recruiter can offer these skills and resources to find and evaluate candidates quickly and effectively:
- Backgrounds in accounting and finance
- Databases of highly skilled professionals
- Strategic alliances and relationships with key industry associations
- Abilities to review skills, conduct interviews, check references, negotiate offers
- Minimized risk with regard to legal issues
- Service guarantees if the new hire doesn’t stick
Hiring mistakes are serious. Underperforming employees can cast a pall in the workplace, bring down productivity and damage your company’s relationships with clients. Poor hiring decisions can also jeopardize morale by leading your current staff to question your judgment.
The key to avoiding the many high costs of a bad hire is to have a solid hiring process — and to avoid shortcuts. If you work hard now, you can minimize the chances of a blunder later.
Do you need help attracting top candidates with the right mix of skills for your open accounting and finance jobs? Robert Half is a pioneer in specialized financial recruitment and is a perennial leader among accounting and finance staffing agencies. Learn more about working with us now.
And when you're ready ...
Resources for small businesses
Small and Midsize Business Center: To assist you, we provide the business resources you need to help recruit, retain and motivate the best candidates for your team.
Salary Guide for Accounting and Finance: How much should you expect to pay a bookkeeper, accounting manager, financial controller or CFO? Find salary data for all these positions at small, midsize and large companies.
When a Small Business Needs a Full-Time Finance Expert: This post outlines five challenges facing a small business and how a full-time financial expert can help.
Discover more useful hiring tips
- Speed Up Your Time to Hire in a Competitive Job Market
- 3 Essential Checklists for Recruiting, Hiring, Onboarding
- Think You Have Hiring Challenges? Recruiters Share Solutions
Editor's note: This post was originally published in December 2014 and was updated recently to reflect current information.