Don’t get me wrong, employees are an essential part of any growing business, however the grievances caused by hiring the incorrect person can be detrimental to business success. As Red Adair once said “If you think it expensive to hire a professional, wait until you hire an amateur.”
One of the most challenging hurdles any SME will jump will be hiring their first staff member. So how can this be done in a manner that is fair to all parties and ensure company growth?
To employ or nor to employ, how can I afford it?
Very often an entrepreneur realises that they need a to hire somebody to assist them with the daily running of their business, however they often resist as they are concerned with the legitimate problem of: “How am I going to pay them?”
Much like purchasing your first home or car, it is intimidating to declare that you are going to pay for another persons livelihood. The often forgotten truth is that hiring effective and productive staff member will free up man hours, this allows you to focus on bringing in additional business which will cover additional costs.
Why is that first employee so important to a entrepreneur?
The majority of entrepreneurs might not like to admit it, but the reason for their initial hesitation in employing staff is two fold.
Firstly, this staff member has to be trusted with all the knowledge that you have built up whilst establishing your business and secondly, you know you can never offer them what your bigger competitors can.
These two things scare an entrepreneur the most, the knowledge that they have to share their trade secrets with somebody who will one day leave to work for a competitor or take their industry knowledge and contacts to set up as competitor!
Who do I employ?
Well this is the easy part, in fact it is so obvious that when we share it with clients during their monthly accounting meetings, they all burst out laughing. Our suggestion is – always hire somebody to do the work that you hate doing!
This will free you up to do the work that you love and as we all know doing the work you love is not only the reason you became and entrepreneur but also brings in additional capital.
Hiring someone to do the work you hate is the quickest way to find out if your employee needs additional assistance or is slacking off on the job- if you soon find yourself doing the work you hate again, you will quickly intervene to solve the issue 🙂
How do I employ – employment agency or advertisement?
The obvious choice here is an employment agency, they take care of screening the candidates and save you loads of time. Many of them even have a replacement guarantee if the initial candidate they placed did not work out.
Their big downfall however is the cost involved and most small businesses just cannot afford the fees that are charged. So with cost as the main driver, we often suggest using the internet to find staff, it is easy and the cost is already built into your monthly charges. Make use of great online tools such as LinkedIn to gauge potential employees and get a feel for the type of person you are going to hire, follow up with candidate references. Always be as open and honest as you can about the job position available- remember it is not only you that needs to gain out of this situation.
A nifty trick is to have a careers section on your website, that way you will always receive loads of CV’s to browse.
How formal should the employment process be?
A simple rule of thumb – be draconian!
It is important to ensure you have all your bases covered right from the start and by this we mean a proper employment contract, a job description for all staff, a code of conduct and a proper leave policy. (PheZulu Business Management will gladly help you with this.) Ensure you have all agreements signed by both parties have copies of the documents on file.
Having these basics in place will save you loads on CCMA costs when it comes time to fire an errant staff member.
Working as an employee in an SME is often more lackadaisical than working for a corporate however it important to maintain a degree of professionalism. Staff do not need to understand your cash flow issues, if you do not have the money to pay employees, they will leave and find other jobs. Similarly employers will need to oversee that the employee is not the cause of those cash flow issues by monitoring their performance and outcomes.
Staff need to be held accountable for the trust you place in them and the money you pay them each month. The difficult part is taking a hard line and holding your staff members accountable. It is here where most entrepreneurs fail in the management game, often they have not clearly defined the rules and therefore have difficulty in disciplining an errant staff member.
Don’t be afraid to challenge your staff on all issues relating to their jobs. This doesn’t need to be a negative experience, just make it a regular experience.
To sum up, hiring your first staff member may be one of the biggest entrepreneurial challenges you will have to face. However by ensuring you hire the correct candidate with the correct procedures in place it can be a liberating investment in your time, allowing you do focus on what you love!
At Phezulu we do more than just mentor clients in business incentives, we are your ‘one stop SME shop’, assisting with everything from Accounting, Business Management, BEE,Consulting, Company Registration to Payroll and Mentoring.
Good luck, happy staffing 🙂