Over the last ten weeks we’ve interviewed eight professionals with significant hiring experience in small businesses, and featured these interviews on the Down2theHire Podcast. This week, we’re doing a post a day to share with you two of the hiring tips we’ve learned from these interviews on how to hire an employee. In yesterday’s post, Tips on How to Hire an Employee from Our First 10 Podcast Episodes – Part 1 of 5, we shared some insights on when to hire or not hire family members, and ways nontechnical managers can make successful technical hires. Here are two more hiring tips for you today:
Tip #3 On How to Hire an Employee: It is never worth rushing to hire the wrong person
In episode 3, we interviewed Cathy Vaughn, General Manager of Sportsplex – a fitness, swimming and tennis center – on the cost of making poor hiring decisions. Cathy explained how she’s learned the hard way that it is never worth sidestepping her hiring process to try and fill a position quickly – even the seemingly less significant seasonal positions. The numbers back this up. The Department of Labor (DOL) estimates that a bad hire costs an organization one-third of the person’s annualized salary, while the Society of Human Resource Management (SHRM) estimates that it costs up to five times a bad hire’s salary.
Whatever the statistics that you want to believe, next time there’s an open desk, the workload’s piling up, and you feel pressed to just fill a chair with a body, realize that it is never worth making a snap-hiring decision.
Still not convinced… check out this post on 5 Articles on the High Cost of Hiring the Wrong Employees.
Tip #4 On How to Hire an Employee: Get educated on how the Affordable Care Act could affect your small business
In week 4, with some professional help, we tackled a behemoth of a topic: The Impact of Obamacare on Small Business Hiring. I wish I could boil this down to one simple action-point for small businesses, but I can’t because the healthcare legislation will affect businesses differently by size and industry. However, if you need a primer on how the Affordable Care Act could affect your small business, listen to our interview with Chris Van Buren, partner at Embrook Benefits Consulting.
Depending on where your business fits into the mix, here’s some summary points on strategies you may want to consider:
- Small businesses well under 50 employees: Consider developing a business model that helps you stay as lean as possible for as long as possible, which will keep you under the 50 employee mark – the trigger for the Affordable Care Act’s well-publicized tax on businesses that don’t provide adequate coverage. See Paul Christiansen’s January 28, 2013 opinion piece in the Wall Street Journal, To Outsmart ObamaCare, Go Protean. However, if you are a small business under 25 employees, and provide adequate levels of health coverage to workers with an average salary of below $50,000 per year, you could qualify for a tax credit. See HealthCare.gov’s Small Business and the Affordable Care Act.
- Small businesses right around the 50 employee-mark: Work with a benefits consultant or broker to figure out if your firm is above the 50-employee or full time equivalent threshold.
- Small businesses in retail, hospitality, or staffing: These firms are going to be hit especially hard since as far as the Affordable Care Act is concerned, many of these businesses employ 50 or more full time equivalent employees. These firms have to decide, which bullet they want to bite: providing coverage to their workers, or paying the $2000 annual tax for each full time equivalent employee they don’t offer coverage to.