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Although you may not find it hard to fill job openings in this economy, attracting and recruiting great employees will make a difference in your operations' performance. Follow these 10 tips to enhance your hiring process and business success.
Identify your UEP (Unique Employment Proposition)
What do you offer that your competitors don't? Make a list of the top 10 reasons why a great crew member should work for you. The easiest way to get started is to ask your best employees why they joined your team; what makes them stay; and what they like most about their jobs and the company.
Ask sources if they are offering a referral or a recommendation
This will confirm if they know the person and are willing to put their own name and reputation on the line.
Do not help your competition
When you are asked for a reference on an outstanding former employee, you've just been put on notice that he or she is looking for a new job. In response, tell the person that is inquiring you have to contact their applicant for permission to release the information. Ask for the former employee's current telephone number and reach out to them, soliciting their return to your organization. If their answer is no, you have made the person feel good and he or she may think of your company next time they're ready for a change.
To change the results, change the sign
The same headline, same message and same location will continue to attract the same types of applicants. If you want more and/or different kinds of candidates, change your approach. For example, if you mainly hire men, take your ad out of the newspaper's employment section and run it on the sports page. For part-time jobs, try a headline that states "Be Home When Your Kids Are Home."
Think inside the box
Before you look outside your organization, consider the people you already have on board to determine if anyone can do the job or be trained to grow into it. Promoting from within motivates your entire staff and it's nice to discover the person you need for the new position is someone you are already grooming.
Divvy up recruiting responsibilities
If you have more than one manager at a location, divide the recruiting responsibilities between them. Have one address referrals, while another manager focuses on outside organizations (schools, church groups, state employment agencies), and another reviews Internet postings (Facebook, LinkedIn and other social media and job boards).
Get rid of "Help Wanted" signs
Help wanted isn't a good reason for anyone to want to work for you. If you desire great applicants, you need to tell them why they want to apply. Instead of posting that you are "Now Hiring," how about saying "Our growth is your opportunity" or "Come for the job, stay for the career."
Frustration is good as long as it is the other company's employee who is frustrated
Somebody else's frustrated employee may be one of your best prospects. Research shows that over 20% of employees are frustrated by their jobs. The same research reveals that these workers, in most cases, are trying to do a great job but they have not been given the tools, training and respect they need to excel. Why not run an ad with a headline that reads, "Are you frustrated and looking for a change?"
Never stop looking for your next employee
Today's employees do not believe it is disloyal to look for a job while they are working for you, and the same needs to hold true for hiring managers. Recruiting is a proactive function and a key component of building your business.
Sell the sizzle, not the steak
No one really wants a job; they want the benefits the job gives them: security, growth opportunities, challenges, recognition, respect, relationships, etc. Ask candidates what they want or expect from their job and address their specific desires.
Content excerpted from Mel Kleiman's book "100 1 Top Tips, Tools, and Techniques to Attract and Recruit Top Talent."
Bio:
Mel Kleiman, CSP, is an internationally recognized consultant, author and speaker on strategies for hiring and retaining the best employees. He is president of Humetrics, a leading developer of systems, training, processes and tools for recruiting, selection and retention of the best hourly workforce. Mel is the author of four books, including the best-selling "Hire Tough Manage Easy." For more information, contact 713-771-4401 or mel@melkleiman.com.
When first-time entrepreneur Philip Vaughn recently began searching for start-up capital, he traveled down two conventional paths.
Mr. Vaughn, co-founder of travel-review aggregator Raveable.com in Kirkland, Wash., says he wasn't interested in forking over a large chunk of equity to venture capitalists or committing to ambitious investment-return expectations. He also considered a loan, but knew that banks had made it onerous for young companies like his to obtain debt financing.
"We're in a weird spot" but we have "a decent amount of revenue coming in," says Mr. Vaughn who expects Raveable's sales to grow two to three times annually.
So he's considering an alternative called royalty financing, in which a company pays back a loan using a percentage of revenue. Traditionally found in industries such as mining, film production and drug development, royalty financing is being seen more among technology companies and other early-stage firms with growth potential.
In the past year, new firms such as Arctaris Capital Partners LP in Waltham, Mass., Cypress Growth Capital LLC in Dallas, and Revenue Loan LLC in Seattle have sprung up to provide royalty financing.
The exact financing structure varies between investment firms. Arctaris, which is raising $200 million from institutional investors, is coupling the royalty financing with a five-year amortized loan. Cypress, which is putting together a $30 million fund, and Revenue Loan, backed by $6 million in venture capital, are attaching a small stock warrant as a safeguard in case the company becomes the next Google Inc.
But one thing remains constant: The companies receiving the loans agree to pay a percentage of incremental revenue, usually from 2% to 6%, either over a specified time period or until a negotiated multiple of the investment is paid back.
There are caveats. The cost of capital may be more expensive than bank debt, especially if a company's revenue rises well above expectations and there is no negotiated ceiling. Also, because these are loans, it's still possible to default on them. And it can be difficult for a young company to manage its cash flow when some of its revenues are already spoken for.
Many start-ups may not be attractive candidates for royalty financing, either. "A lot of entrepreneurs could end up chasing down this rabbit only to find out that their financial metrics really don't line up with a consistent recurring revenue model attractive to a potential lender," says John Yates, a partner in charge of the technology practice at law firm Morris Manning & Martin LLP in Atlanta.
But royalty investors say the default provisions of royalty loans are generally less onerous than bank debt, and the payments are variable not fixed, allowing for flexibility if a company loses a major customer or has a down year.
Perhaps more importantly to entrepreneurs like Dan French, the chief executive of independent brokerage house Leonard & Co. in Troy, Mich., entrepreneurs give up little or no equity in these royalty scenarios. Mr. French previously turned down investment offers from two private-equity firms, one of which offered $15 million in exchange for nearly half of the firm.
"Believe me, it's very difficult to say 'no' to money of that magnitude," says Mr. French, whose firm expects to make $16 million to $18 million in revenue this year. "But the dilution from the shareholders' standpoint was dramatic."
He's now in discussions with Arctaris about a funding deal to help Leonard & Co. expand its client base.
Arctaris Managing Partner Andy Clapp says his firm is targeting growing companies in a mix of industries with at least $5 million in annual sales and profitable or nearing profitability.
The firm, which recently opened an office in a Detroit manufacturing plant, is investing up to $7 million per company, offering a five-year amortizing loan at up to 14% interest, plus a royalty loan payable over 10 years.
Keith Smith went the royalty-financing route last year for his Seattle-based Web start-up, BigDoor Media Inc., after a bad experience with bank debt ruined his previous start-up, Zango Inc. At one point, that company, which he founded in 1999 to offer ad-supported software, had more than 200 employees and revenue over $75 million. But it ran into difficult times in 2008 and defaulted on $44 million owed to banks. Mr. Smith was forced to close Zango's doors in April 2009 and sell its assets.
"If you're a small company, and you fall down and you're bleeding, banks have the ability to put their foot on your neck and pump the blood out even faster," Mr. Smith says.
For his new company, Mr. Smith raised $250,000 from angel investors plus $250,000 in royalty financing from seed fund, Founders Co-op. BigDoor went on to raise $5 million in venture funding in June, and the royalty loan converted into Series-B equity.
Raveable's Mr. Vaughn is currently in talks with Revenue Loan for financing.
"Some people might be spooked by" royalty financing, Mr. Vaughn says, but in his situation, "it's practical."
Mel Kleiman (7)
