Hiring Methods to Minimize Cost

By Georganne Weeks
Concept H.R.

Business owners are always under pressure and many don’t understand how poor hiring decisions can result in significant financial loss. Developing good hiring and management practices can help business owners control some of the expenses associated with;

• Unhappy employees lead to high turnover rates.
• Poor time management and inefficient skills lead to overtime.
• Lack of people skills, bad behavior, poor productivity and performance issues lead to unemployment claims and higher unemployment taxes.
• Employees with unsafe work habits can lead to workplace injuries and increased workers’ compensation premiums.
• Business owner’s failure to be compliant with state and federal labor law requirements associated hiring and managing employees may lead to discrimination claims, monetary penalties and legal fees.

All of the expenses are directly related to the employee.  Therefore, business owners should establish good hiring practices and take the following steps toward controlling these costs, such as:

• Develop good job descriptions to define the duties and responsibilities, as well as the education, skills, experience, and physical requirements needed to fill the job.
• Compose employment ads using the job description in order to clearly state the required qualifications.
• Carefully review resumes. Make a list of the selection criteria and qualifications from the job description and sort them into three stacks; yes, maybe, and no.
• Ask those who meet the minimum requirements to complete a job application that will provide you with important information that is not captured in a resume.
• Compare the resumes and the applications for inconsistencies.
• Look for red flags such as; spelling and/or grammar mistakes, job hopping, lack of dates or gaps in employment dates, and vague descriptions of duties and reason for leaving previous employers.
• Schedule interviews and preferably include more than one manager in the interview process to obtain more than one person’s perspective about the candidate.
• Develop a list of objective and “legal” interview questions. Avoid questions related to religion, sex, marital status, number of dependents, ethnic heritage, and disability.
• Document candidate answers in order to review them later when you are ready to narrow the list to your final candidate[s].
• Check employment references being sure that you have obtained their authorization, especially if they are currently employed.
• Another valuable option is to use pre-employment testing or assessments to measure certain criteria such as aptitude, personality, cognitive ability, and/or physical ability of the candidate.
• The importance of knowing “who” you are hiring cannot be overstated. When you are ready to make an offer, you may want to make the offer contingent upon the results of a consumer report, such as a background check and/or a credit report. Trusting a new employee with access to cash, customers’ credit information, other protected information and inventory can expose you to significant risks and liability.
• Drug screening can also have a positive impact on the bottom line, the reputation of the business, and employee safety. Many work injuries are related to drug and/or alcohol use while on the job.

The effort it takes to make the right hire will result in a better return of investment. However, once you have the right people in place, don’t stop there! Good management practices can help you minimize overtime with efficient work schedules. You may also be able to minimize your unemployment claim exposure and lower your unemployment tax rates by taking these steps:

• Develop and communicate good policies and procedures.
• If employees begin to have performance issues, act quickly and take the necessary steps to coach and counsel them.
• Document all employee incidents, obtain employee signatures, and retain written documentation to defend an unemployment claim or a wrongful discharge claim.
• Respond to all unemployment claims in a timely manner and provide documentation to verify that the employee was separated for good reason.

In every business the employee is the most important and valuable asset.  The investment you make now in using effective hiring and management practices will yield a greater return as well as minimize your overall employee costs.  Hiring quality employees and managing them effectively will make it possible for you to build a better brand, stand apart, and pave the road to a successful future.

Georganne Weeks is currently PHR and SHRM-CP certified and has more than 25 years of human resource management experience.  She has conducted numerous training seminars and has supported hundreds of clients for Concept H.R. for over nine years.  Concept H.R. has solutions to many common human resource issues including payroll, benefits, 401(k) and risk management administration unique to the dynamics of a diverse workforce.  You can find the expertise needed to maintain compliance with employment labor laws and regulations on a federal, state, and local level, all given with the highest personal customized care.