Small businesses are the backbone of the economy, and on average employ 1 to 10 employees. Many of these business owners have previously worked in corporations, and falsely believe they don’t need a systematic way of hiring due to their smaller size. While they may be right about not needing a formal hiring policy like a larger company, cutting corners and using subjective tools and practices will not protect them from litigation. The sad fact is that a small employer is more likely to make a hiring mistake for multiple reasons, mostly due to lack of experience in hiring. They are under the mistaken belief they can coach and motivate anyone for success. Their lack of awareness simply creates sleepless nights and unnecessary expense of hundreds (if not thousands) of dollars!

The biggest challenge? One bad hire can literally force a small enterprise to close its doors due to theft of money, data and proprietary information. Or, they incorrectly reason it won’t cost them anything to hire a straight commission salesperson, if that person is unable to sell. They don’t calculate the cost to their reputation nor the excessive marketing costs with no positive ROI. One small business owner suffered through theft of proprietary information. It cost him dearly. Instead of seeking better ways to hire people, he simply recreated the mistake by solely relying upon his gut.

Gather objective information. The more objective information you can gather up-front, the less likely you are to interview and select the wrong person. Most interviewers make their decision within the first five minutes of an interview, but spend the next thirty or sixty minutes asking questions that make no difference in changing their minds. Instead, use a structured interview format focused on experience, education and job skills. Have candidates take a skills test to determine true proficiency. Often overlooked is asking about any special requirements. Never assume they read the job posting simply because they applied for the job (e.g., if travel is involved, ask if they are available to travel and how often).

Qualified assessments. Many small employers need to broaden their perspective of what is a qualified assessment. If you’re relying upon non-qualified assessment results, its pay now or pay later in loss of clients or the employee’s unwillingness to do the required activities.

Training. Since most small business owners don’t hire often, they may overlook current employment laws. Set up a written strategic hiring process and have it reviewed by legal counsel. Review it each time you hire. Take time to learn best interview practices, how to correctly use assessments and skill testing and when to conduct background checks and drug screens (states laws vary). The basic rule of thumb is stay focused on the job responsibilities along with the applicant’s ability to successfully achieve intended results.

All jobs are important! One business owner didn’t feel the receptionist position was an important job in his company. He didn’t understand it’s the client’s first impression, and often a long-lasting one! He spent 5 minutes talking with each candidate and then selected the first one he liked. He went through three employees within a month. He not only lost several clients, one top employee left in protest of his hiring practices.