Successful Blog

How Much Can the Wrong Hire Cost You?

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Hiring a new employee carries some risk.

The person you choose to hire may look and sound great during interview, but he or she may turn out to be a poor performer in the end. It is essential that you try to avoid making a wrong hire, because it can cost your company dearly.

According to The Harvard Business Review, about 80 percent of employee turnover results from poor hiring decisions. Here is a look at the potential costs of a bad hire.

Financial Loss

In a survey conducted by CareerBuilder, about 41 percent of companies estimated that a bad hiring decision cost them more than $25,000 and 25 percent said that it cost them more than $50,000.

The financial cost of replacing a bad employee can vary greatly depending on his or her position in your company.

The Labor Department estimates that the average cost of replacing a new hire is about one-third of his or her annual salary.

Some of the expenses that are involved include interview expenses, orientation and training, employment assessment, termination costs, potential legal expenses for wrongful dismissal, relocation and career transition. A large portion of the financial loss results from the need to repeat the hiring process to find a replacement.

Lower Productivity and Work Quality

Poor job performance is usually the main reason why a particular employee is considered a bad hire.

An employee who is not making enough effort to fulfill his or her job duties satisfactorily can have a significant negative impact on the overall productivity of your company.

If he or she is constantly failing to meet deadlines and delivering poor quality work that needs to be redone, it will take a longer time for your company to complete projects and possibly cause your workforce to become more disorganized.

Negative Work Environment

Hiring the wrong employee can also have an adverse effect on the morale and satisfaction levels of other employees.

Competent employees may be required to pick up additional work because of the incompetence of the new employee, and they may feel dissatisfied as a result of that.

If the new employee has an attitude problem, he or she can undermine teamwork and create an inharmonious work environment, which can in turn hinder your business performance.

Reputation Damage

Employees who deal directly with customers are the “face” of your business, and their attitudes and behaviors can affect your customers’ perception of your company.

If the new employee occupies a customer-facing position, he or she can jeopardize your relationship with your customers. Poor service and negative attitude can upset and frustrate customers, and cause them to lose loyalty. A bad employee can cause significant damage to your business reputation even if he or she is with your company for just a few months.

A good workforce is one of the key ingredients for business success.

As such, you have to take the necessary measures to ensure that you hire the right people for your company.

Photo credit: pinnacleplacement.com

About the Author: John McMalcolm is a freelance writer who writes on a wide range of subjects, from human resource management to online reputation management services.

Is Bankruptcy Your Only Option?

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Just more than 40,000 U.S. businesses declared bankruptcy in 2012.

That number is a staggering figure to be sure, but a sharp drop from the 2009 peak of 60,837 during the worst of the so-called Great Recession.

Although the economic climate has improved considerably since 2009, 40,000 business bankruptcies constitute a fairly ominous statistic, representing the dashed dreams of American entrepreneurs, both big and small.

Business Failures Inevitable

Whether the economy is robust or on its knees, businesses will continue to rise or fall depending on a wide variety of variables.

If you’re a small business owner whose debt load is swiftly becoming unsustainable, then you may find yourself facing the very real possibility of insolvency. Under the protection of the bankruptcy court, a business can be reorganized or its assets can be liquidated to satisfy creditors.

Although bankruptcy in theory holds out the promise of a “fresh start” for the owners of failed businesses, a business bankruptcy filing can severely damage the credit score of the business and its principals, making it difficult, if not impossible, to access financing at reasonable rates in the short-term future.

Bankruptcy = Hefty Legal Bills

Another adverse consequence of bankruptcy is the substantial legal bill incurred during the process of filing for protection under the bankruptcy code. And bankruptcy will not wipe out tax liabilities, which can continue to haunt the owners of failed businesses for years to come.

In the case of companies that seek to reorganize under the protection of the bankruptcy statutes, in so doing they cede control to a bankruptcy court judge or trustees who will have the final say in all company-related decisions during the reorganization process.

If as a business owner, you see signs that your company is in imminent danger of failure, what other options do you have besides bankruptcy?

Attorneys Lei Lei Wang Ekvall and Evan D. Smiley, authors of “Bankruptcy for Businesses,” a legal guide published by Entrepreneur Magazine, discuss two common alternatives to bankruptcy for businesses that find themselves in financial distress.

Negotiating a Workout

Under the first alternative — an out-of-court workout — the business owners seek to resolve their financial problems with creditors without relying on a court to preside over these negotiations.

Needless to say, the success of such negotiations hinges primarily on the willingness of your business’s creditors to engage in such talks. For this reason, it would probably be prudent to initiate such discussions before creditors have become intransigent because of prolonged failure to pay bills.

To effectively avoid bankruptcy, this financial workout should seek to win the cooperation of all creditors.

Should one or two major creditors refuse to join the talks, the business owner is likely to be forced to take the bankruptcy option. The business owner must also come up with a viable plan that ensures creditors they will eventually be repaid if they agree to cooperate.

This first alternative to bankruptcy presupposes that the business’s owners believe they can regain their footing and resuscitate their business if creditors allow them to set up a less arduous debt repayment schedule.

In other cases, business owners may fully realize that their company is beyond the point of salvage but still wish to avoid recourse to federal bankruptcy court.

Second Alternative

Assignment for benefit of creditors, the second alternative to bankruptcy advanced by Wang Ekvall and Smiley, is designed for cases in which liquidation appears to be the only course of action left for a failing business. Although such assignments require court intervention, they are overseen by state courts and not the federal bankruptcy court.

Under an assignment, the faltering business selects an assignee — an appointment sometimes subject to creditor approval — who then oversees the liquidation of the failing business’s assets, subject to state laws covering such procedures.

If the liquidation produces sufficient cash to reimburse all creditors and cover the assignee’s fees, any leftover funds can be returned to the business’s owners or shareholders.

In the event you have filed for bankruptcy tied to your small business, what was the outcome? Have you been able to get back on your feet with a new business venture?

Photo credit: thelaw.tv

About the Author: Jay Fremont is a freelance author who has written extensively about personal finance, corporate strategy, business education, and career degrees in business.

Why Do Your Meetings Go Nowhere?

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Surprisingly, office meetings are always long. You hardly ever hear of anyone complaining that the meetings were too short.

Every company has its own culture when it comes to meetings and how they are conducted. The general sentiments surrounding office meetings however make them appear boring and ineffective.

But why should it be this way? Is there an alternative to making meetings productive?

The fact remains that every meeting usually has an agenda that is communicated either before or during the meeting.

What makes meetings seem like they are ‘going nowhere’ has to do with the set up and the premise for which these meetings are held and how the content is passed on.

Below are some reasons behind the failure of company meetings.

Objectives Aren’t Clear

Every meeting started must have clear objectives.

Lack of tangible and well-structured objectives not only wastes time but also confuse the attendees who may be left to guess what the meeting is all about. Be sure of what you are trying to achieve by holding the meeting and bring that objective out clearly.

To help you on this, a pre-meeting review and rehearsal would be appropriate just to ensure that the agenda is in order and the points are well arranged, this enhances and streamlines the objectives of the meetings. Unless you convince yourself, you may not be able to convince the rest of the attendees.

Unregulated Number of Attendees

Before holding any meeting, the number of people to attend these meetings needs to be checked and ascertained.

Not everyone should attend the office meetings. In fact that is one of the reasons that make these meetings fail in making an impact. The more the people attending the meeting, the higher the likelihood that such a meeting will consume so much time compared to the set time limits.

Instead of each person attending the meeting, only a few should be picked and the rest served with a brief summary of the discussions later on.

Time Blown

A meeting is ‘elastic’ in nature; it tends to stretch out to fill whatever time it has been allocated.

Meetings which take longer than necessary tend to eat into the company’s time and still end up being counterproductive. Part of the time allocated will normally be used for conversations that are not even company related or if they are then not on the agenda.

To make such meetings successful, you can reduce the time so that only the relevant things get time to be discussed.

The ‘Latecomer’ Factor

Meetings tend to spend too much time on arrivals. Late arrivals in particular can waste time for the entire group.

The solution to this is to start the meeting on time so that latecomers will find ways to catch up on their own. People will soon shape up and arrive in time because latecomers are embarrassed walking in when others are embroiled in deep discussions. This will save time for the whole group and the meeting will achieve its purpose.

Conducting Sitting Instead Of Stand-Up Meetings

Research shows that stand-up meetings take lesser time that those where people are seated.

This is because stand-up meetings tend to make people less comfortable, meaning decisions are arrived faster, deliberations made in record times and only pertinent issues get airtime. So far these meetings have been ranked among those that are productive and efficient.

Remember time saved in the course of a meeting is always equated to productive time given back to the company.

Discuss more with less time; you will find meetings meaningful and effective.

Photo credit: imlworldwide.com

About the Author: Tina Samuels writes on how to be first on Google, social media, marketing, and other business topics.

Is Having Clients at Your Home for Business a Wise Move?

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You finally have your small business up and running. And it’s in your home. How do you have clients come to see you? What do you need to think about?

Many small business owners can’t afford office space, or really don’t need it, so they work from home.

A lot of questions arise about meetings in the home, so here are some of them with their answers:

1.    Do I need a separate entrance?

Ideally yes, but that’s not always possible in the real world. If you have a separate entrance, you will come off as more professional than if a client comes into your home filled with your personal life. But if it’s not possible, just make sure you have any area clean of clutter (even if you stuff it all in a cabinet), pets are put away and no one will bother you during your meeting. If your office is upstairs or somewhere else in the home where you’d need to walk through much of it, have your meeting in the dining room or another neutral area more easily accessible in your home.

2.    Should I tell my client beforehand or will that make me look bad?

Many people say they drive up to a house for a meeting and think they have the wrong address. Be upfront and let your client know you work from home and that is where you’ll be meeting.

3.    What if my client hurts him or herself in my home?

This is a tricky one. If your client slips and falls or your dog bites him, you’re legally responsible. The smartest thing you can do is have insurance to cover this. If you don’t and something happens, it can turn into something pretty big and bad.

4.    Should I just meet at a coffee shop or somewhere else instead?

Sure, some people who home office have off site meetings. It depends a lot on what you do. If you need to look at material that takes up space, your home is probably better. At home you can avoid distractions that may be found elsewhere. You also have all your materials and don’t have to lug anything around. But if you have kids or pets at home, or another working adult, it may be too distracting and you should think about another spot.

5.    Are there any other little tips I should know?

Yes.

• Dress professionally. Maybe you work most of the time in sweats, but remember you’re meeting with a client, put on your work clothes.

• Try to avoid any household smells like last night’s dinner or your golden retriever. You can use a candle or other air fresheners; just make sure nothing is too strong or offensive.

• Oh, always make sure the bathroom is clean!

Many people work from home and as long as you keep it professional and let your client know up front, you should be fine.

If you run your small business from home, do you allow clients to come by? If so, what have your experiences in such cases been like?

 

Photo credit: thesmarterwallet.com

About the Author: Heather Legg is a writer who covers topics related to small business, social media and personal finance.

Should You Try and Hire the Competition’s Talent?

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Competition isn’t just reserved for sports, sometimes in the business world; you have to be willing to go that extra mile to solidify your company as one to be reckoned with.

As a small business owner one of the toughest challenges is hiring the right executives and CEO whose is going to beneficial to the company and actually make things happen.

Of course you only want the best of the best. Sometimes that best may be someone who is working for your competition. These industry professionals have the experience, the skills and the valuable contacts that can possibly take your company to a higher level.

Risks of Taking The Competition’s Talent

How can you steal them from their current employer while being tactful?

Before you formulate any kidnapping plans it’s important for you to know the associated risks. The specific employer could be under some type of contract so you will have to work around that.

You could also easily become known as an employee poacher or even worse; that you like to “play dirty”.

Stay Subtle

First, you should start off subtle.

Being that you are in the same industry as the rival company, more than likely you’ll have some of the same or similar contacts. You can let these contacts know that you are currently interesting in hiring an experienced employee. Casually mention the perks you are willing to offer for the “right” person.

When your contacts hear that you are hiring they may pass that along the grapevine and the information may find itself to the right person.

Get Professional

Another great option is to acquire the services of a professional executive search firm.

An executive search firm specializes in recruiting candidates that have experience in working in highly specialized positions within a company.

You can let the search firm know that you are interested in a particular person. They will approach the person from the rival company and discuss with them a possible job opportunity.

Also, remember that you have to have something great you can offer this possible new employee to motivate them to want to work with your small business. This could be a pay raise or a high position of authority.

Hiring a search firm prevents you from immediately having to reveal your identity. This protects vital relationships with business partners because the search firm is the one doing the recruiting.

Check and Recheck

Also you may want to have a background check completed on that specific employee. You want to make sure that they really are worth the risk. Although, most corporate employees don’t have a criminal history, you should still check for one.

If this skilled worker, agrees to take a meeting or interview with your company you should be very direct and upfront with them. Let them know why you feel they will be a great asset to your company and also how your business can help them grow.

Inquire about any non-disclosure or contract agreements they have with their current employer.

Finally, consult with your lawyer to get a good understanding of your options.

Photo credit: techcrunch.com

About the Author: Tina Samuels writes on how to get to the top of Google, social media, marketing, and small business topics.

5 Ways Your Employees Can Be More Productive

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Increasing your business productivity is an excellent way of boosting your profits. But if your employees are lagging, or you’re just not seeing the results you’d like, how do you turn things around?

Here are five ways you can help your employees be more productive — making both them and you happier:

1. Provide comfortable break areas and times – It may seem counterintuitive, but providing a relaxing area for employees to unwind a few times during the day can actually increase the amount of work they get done. People who feel chained to their desks all day can zone out, and their lowered productivity can affect morale, which can turn into a nasty cycle.

Set mandatory break times for all employees (even if they’re not all at the same time). Consider implementing short, office-wide breaks in which everyone gets up once an hour to do a few stretches. This can improve your workers’ physical comfort and give them energy boosts throughout the day.

2. Give them the technology they need to do their jobs well – These days, mobile devices are becoming more and more essential to running a business. If you can’t afford to provide these devices to workers in the office or field who may need them, encourage them to bring their own.

If you choose to let employees work from their own devices, make sure your business data is well protected with strong passwords, time-outs, and other security measures.

3. Provide flexible working options – Whether it’s telecommuting one or more days per week, offering a flexible work schedule, or another accommodation, creating a flexible workspace can have an enormous effect on employee morale and productivity.

Having everyone in the office has its advantages, making collaboration more convenient. But with ever-evolving technology, working from
home is becoming a more feasible and attractive option for many companies.

Worried that productivity will drop if you let employees telecommute? Numerous studies have shown otherwise.

A Stanford University study from February of this year found that in one company, out of 16,000 workers, those who were allowed to work from home showed a 13% performance increase over their office-bound colleagues.

4. Provide regular, constructive feedback – It’s hard to improve in a vacuum. Employees who aren’t sure where they stand, or who have formed inefficient habits, may need some help identifying areas to work on.

Give your employees encouragement for a job well done, or thoughtful advice for how to perform better. Delivering this feedback regularly will help keep everyone on track.

5. Keep meetings short and sweet – Conducting a meeting without an outline or agenda is a recipe for a long, unproductive session.

Instead, write up an agenda and identify someone to lead the meeting and keep conversations on track. You’ll also need someone to take notes to make sure no important points get lost. Keep the meeting focused on important points, and consider issuing status reports and minor updates in a weekly email instead of during meetings.

These are just a few of the ways you can help your employees be more productive and keep your office running smoothly.

Photo credit: techliant.com

About the Author: Freelance blogger Angie Mansfield covers a variety of topics for both individuals and small business owners. Her work addresses such things as health, social media, and how to remove information from online records.