By Mike DuBose and Joann Moss

Small business owners do not realize the dangers that they face when hiring new employees. Having been through several lawsuits and Equal Employment Opportunity (EEOC) complaints (all of which we won), it can be pretty scary and frustrating to sit in court or in a complaint hearing being grilled by a former employee’s lawyer! Fortunately, we had a good employment process; otherwise, we could have gone out of business because of fines and settlements from lawsuits! The EEOC received 90,000 employment related complaints in 2005! The problem is that while you may be right, a complaint or a lawsuit can take hundreds of hours to defend and complainants usually don’t have to pay for your lost time or legal costs!

Small business owners often refer to their staff as their most valuable asset, but their efforts in hiring and retaining the right staff frequently do not reflect this value. Owners plan many aspects of their businesses for success, but hire haphazardly without strategically aligning their employees with the mission and goals of the company. They are setting themselves up for failure and liabilities from the start. Jim Collins in his book, Good to Great, reports that hiring the right, outstanding staff and placing them into the right jobs is a critical part of the success formula in building a great business. Of all the aspects in running a business, this is one of the most important pieces of advice that took me twenty years to figure out!

To assemble a great team is not easy and even the best efforts can go astray. We have made just about every hiring mistake by hiring employees who were: sexual harassers; negative and hostile; drug abusers; incompetent; thieves; and, trouble makers. But, all of these employees looked great on paper, their interview went well, and their references checked out! Having the wrong employees in your business can be draining on the leaders and managers. The bottom line – they cost you money and time!

It is imperative that your company maintains a structured hiring process that ensures staffing your organization with the best employees for the job and complies with legal guidelines. Hiring is an investment and it takes considerable training, effort, and experience to develop the skills necessary to manage the hiring process. I have adopted a new motto in our companies – Hire tough and slow -- and fire fast! Additionally, the legal considerations in the hiring process are far too numerous and ever changing to fully cover in this article. We suggest retaining the services of a qualified professional in the human resource (HR) field to assist you in navigating this war zone.

Following are six key steps in the hiring process.

• Define the jobs and determine qualifications: The initial part of your hiring journey is to create a job description that reflects exactly what you want the employee to do. This should include the qualifications and assets to match an employee to your job description and your company’s needs, culture and philosophy. Buckingham in his book, One Thing You Need to Know, recommends “Define clear expectations. Research reveals that less than 50 percent of employees claim they know what is expected of them at work.”
• Generate applicants: Keep in mind the consequences of the advertising medium selected, (internal job postings, employee referrals, newspapers, Internet) as relates to the impact on legally protected classes for the purpose of defending against a pattern of discrimination in hiring. Even the way you advertise can result in a lawsuit or complaint. Create ads that are friendly, attractive, and appealing. We recommend CareerBuilder.com for advertising for new employees.
• Thoroughly Assess Candidates: There are many questions you cannot ask such as: age, race, marriage status, religion, child care, etc. during the interview process. You should have an application form that has been reviewed by a professional in the HR field to ensure legal compliance relating to employment at will, consent of applicant screening procedures, and affirmative action information, etc. Don’t hire based solely on resumes! Additionally, your interview process should be reviewed and conducted by someone familiar with the legal considerations of this phase. Most research indicates that the number one problem today is that applicants lie or “enhance” job applications, resumes, and interviews. Before we employ an individual, we conduct a medical, psychological, credit, and drug screening. Make sure that you are aware of the laws governing these screenings in your state. We also implement rigorous background checks and usually take the applicant though three interviews conducted by a group of trained interviewers on different days. Did you know that new and varying federal law dictates how long you must retain hiring information, not just on the employee hired, but all applicants? If you do not find the right person on your first series of interviews, go out again and re-advertise the position. Don’t settle for the best person from the first round unless they are right for the job.
• Extend a Written Offer: A written offer of employment should be conveyed after a thorough assessment process has been completed for the final candidate, and all other applicants to ensure adherence to Federal, state and local laws. An offer of employment should be conveyed in a letter carefully crafted by an expert. It should contain all the essential terms and conditions of the offer and should not be ambiguous or misleading. Even the wording on the offer can land you in court!
• Commence employment: Make sure that you act “consistently” with applicants in all phases of the hiring process. Secure a signed applicant acknowledgement of the conditions of employment, to include (but is not limited to) employment at will, company policies and procedures, evaluation period, and restrictive covenant. Avoid the use of the words “probation” but rather use “provisional period.” Most employers now use a 3-6 month provisional period to assess an employee’s skills.
• Follow through: On a periodic basis, you should evaluate your hiring process to ensure that you are accomplishing your goals in assembling a qualified team to enhance success of your organization and minimize the effects of bad hiring decisions. Don’t wait until you receive a notice from a lawyer or the EEOC that you have violated someone’s rights or the law. Be proactive and develop a good employment process up front that can withstand an attack!

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Mike DuBose is a field instructor with USC’s graduate school and has been in business since 1981. He is the servant leader and owner of six debt-free corporations, including Columbia Conference Center, Research Associates and The Evaluation Group.

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