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Employee Recruitment, Selection, and Retention Tips for Startup Owners

“According to SHRM, the cost of replacing an employee is somewhere between 90 percent and 200 percent of their annual salary; researchers at Columbia University pegged it at 150 percent, depending on the position.” –

If you are a startup business owner, you might be an excellent subject matter expert in your field. You did all the work to make your brilliant idea into a reality. You might have mastered the art of marketing, and the customers are now flowing to you at a rapid pace. Congratulations on your achievements!

But how skilled are you in managing your team who can help you grow your revenues and sustain your business even when the times get tough? How well can you manage recruitment, selection, and retention of the talent on your team?

Recruiting, selecting, and retaining employees are complex and costly processes. If not done properly, many issues could arise and will lead to a high employee turnover. Incurring extra costs due to hiring wrong people for the job or losing the best employees is not the ideal situation when running your own business. Exceptionally talented individuals nowadays have choices to select an employer that can offer value and benefits of working with them (Taylor, 2016). Absence of careful HR planning leads to company spending a lot of money on filling vacancies and replacing talent (Gusdorf, 2008).

Several times in my career I’ve observed disastrous actions by HR’s poor guidance provided to the leadership team that not only impacted the company’s future adversely but caused employees – HUMANS making companies money - to traumatic life events. HR representatives caved into the pressures of careless leadership and were incapable to correct the actions even when they saw management incompetence.

I am convinced that bad hiring and retention decisions don’t all come down to bad Human Resources representatives. As a startup owner, you might not even have an HR on staff yet. You might be relying on your personal knowledge or didn’t even give it a thought that your trusted employees could potentially leave you. In most cases, great employees’ loss happens because of lack of planning and execution of talent development and people-centric leadership strategies. A good subject matter expert in AI doesn’t always make the best people manager without additional training. As you grow your business, you will need to hire more people. Start planning your Human Resources and talent development strategies early in the game.

Human capital management falls in the hands of leaders and it is “the sum of every attribute that adds economic value to what an individual can produce.” (Salem Press Encyclopedia, 2019). According to Salem Press Encyclopedia, “this includes a person’s creativity, useful knowledge in specific areas, work skills in particular field, social skills, personality, and work ethic. All of these combine to determine the quality and quantity of what a person can produce in terms of economic work, and by extension what he or she will contribute to the overall economy in which the individual participates.” The societies and companies are driven by an interest in material value, therefore employees play the vital role in delivering that value.

Understanding this, why do you, a startup business owner, need to invest time and energy in choosing and retaining the best talent?

Adverse Impact of Unplanned and Poor Management Recruitment Process

There are several factors that impact organizations adversely when the recruitment and selection process is not planned and executed properly. For example, when companies select to use only internal promotions, it could prevent for new and fresh ideas to be added to innovation and growth, so the motivated employees could start feeling stagnant and could leave (Gusdorf, 2008). Therefore, the balanced approach to recruiting internal and external employees is highly beneficial. Ineffective hiring processes, lead to missing out on finding skilled labor. The stronger the economy, the higher the competition for the skilled talent, which creates problems for bringing people on-board faster. Another underlying cause of problems for retaining employees is management not being properly trained on motivational techniques, performance management, or adhering to labor laws, creating complaints, employee dissatisfaction, and turnover (Gusdorf, 2008).

Nicole Fallon Taylor (2016) wrote the article in Business News Daily 6 Ways to Ensure You're Recruiting the Best Talent where she suggested the following effective approaches organizations can take to attract better candidates for open positions. I summarize here:

1. Start building relationships with people before they left the current employer. Life and professional circumstances change, so staying in touch with the future talent can only benefit the company when the positions need to be filled.

2. By understanding that talent values more than just high salary, but also other benefits, such as flexible and enjoyable work environment or paid time off, the organizations can demonstrate full value propositions to the top talent.

3. Provide mobile friendly and easy access to the hiring resources.

4. Consider searching for the remote employees and utilize audio, video, and web conferencing.

5. Create effective hiring process, as top talent tends to move on quickly.

6. Utilize the existing talent’s feedback to showcase to the prospects those who are already working in the company.

Social Media is a Recruitment Tool for Both Employers and Employees

With the rise of activities on social media, companies no longer have a luxury of simply posting a job online and hoping to get the best candidates recruited and selected for the job (Taylor, 2016). Commonly organizations neglect to initiate or maintain engagement with the potential workforce by not connecting or researching employees on sites such as LinkedIn, twitter, Instagram, etc. There is a lot to learn from about a person’s interests and habits to determine their values and behaviors before making a decision to hire them. It is necessary for a company to maintain positive and engaging image that demonstrates vision, mission, and culture to attract the best talent (Taylor, 2016). Potential talent also researches the company and its employees. By using social media, top talent could be selected and recruited not only based on their resume or interview performance.

To do a better job of selecting the right candidates, the organizations need to ensure to make all the positions available to all internal employees first. By sparingly using employees’ referrals to find top candidates can be advantages, as employees know the culture and the skills needed for the job and will most likely recommend people who match the jobs. Companies can utilize the external recruiting firm or an in-house recruiter to find the right external candidates. They can also register with the state agencies or post on job boards, in newspapers, career boards, or on the web (Taylor, 2016).

Another way to consider selecting the best employees is by starting them as interns or on a part-time basis to determine how they perform in the roles before hiring them to the full-time roles. You should have a process for selection testing to weed out unqualified for the job employees prior to interviewing the final pool of candidates. Managers need to be trained and skilled in conducting structured and effective interviews. Finally, it is important that the background checks are conducted to get the best candidates.

Basics of Retaining Your Employees

Once employees are hired, the next challenge is to keep them happy, motivated, and productive. When onboarding employees, first learn about them by asking about their reasons they took the job or what motivates them to keep going even when the times are challenging (Harley, 2015). Learning about employees’ preferences increases their job satisfaction, because they see the management caring about them as a person. Once they employees are onboarded, then set clear objectives. Employee Retention Guide by AICPA (n.d.) recommends several unique and low cost approaches to achieve this and to retain the top talent.

  • Show appreciation, respect, and trust

  • Engage and empower employees to make decisions and to bring ideas to the table

  • Manage performance and provide continuous feedback

  • Recognize and reward employees for their contributions

  • Hire the right people that match the culture and skills needed to get the job done.

To keep employees at your company longer, consider developing and promoting talent from within to allow people to grow for the years to come (Gusdorf, 2008). Ensure to be diligent and address any potential conflicts or dissatisfaction as they arise. Be consistent in the way employees are treated and always transparent in communications. Most employees leave companies due to dissatisfaction with leadership (Mayhew, n.d.).

In closing, if all the factors described in this article are considered and implemented, the right people will be recruited, selected, and retained. Schedule a free consultation to determine if XCaliber Coaching & Consulting can help you with building your talent development strategies.

About the Author: Alex Aberle is the President and Founder of XCaliber Coaching & Consulting LLC, a leadership and career development coaching firm. As a Certified Professional and Executive Coach with over 20 years of global experience in leadership and career development, she is on a mission to build a better world of leadership. Alex helps currents and aspiring leaders to calibrate existing skills, expand knowledge, and innovate approaches to effective performance. She worked with the clients employed by Anthem, Inc., The Johns Hopkins University Applied Physics Laboratory, YPO, Cisco, BT, Xerox, and others.

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