Managing employees is a stressful part of managing a small business. In fact, our ongoing survey of small business owners reveals that hiring, firing, and managing employees is one of the hardest parts of managing your small business growth.
When you stop to think about it, though, it’s no surprise that employees can introduce a great deal of unpredictability and stress into a small business – especially those first few employees that are hired. After all, when an entrepreneur starts a business, he or she is typically the one that does it all. They perfect the way they want to see things done over time. Hiring employees, on the other hand, often means more inconsistency in how work is done, misaligned expectations and goals, and in some extreme cases, downright neglect and damage to the business as you are trying to manage small business growth.
With this backdrop in mind, it’s no wonder that so many entrepreneurs elect to remain on-man “solopreneur” shops without employees. While this may help alleviate some of the concerns outlined above, however, this approach is less likely to deliver long-term wealth and earnings when compared to companies that grow beyond their owner and founder. The good news is that there are other answers to help navigate these pitfalls.
Below are five things that will help you more effectively manage the various nuances of hiring and managing employees:
1. Keep employees’ goals aligned with yours. No one is going to be as committed to your business as you. After all, you take most of the risk and have the most to gain if things go well. However, this doesn’t mean that your employees should have no skin in the game. Rather than providing a fixed paycheck regardless of your company’s performance, think about tying at least a portion of their pay to overall company performance – as well as their individual contributions to growing the company. They still may not be as committed as you as a result, but you’ll get them a lot closer.
2. Set clear performance expectations for your employees. Similarly, employees should understand what exactly is expected of them. If you don’t measure it – and if you don’t hold your team accountable for hitting those measures – then it’s safe to say that you will be disappointed in their performance. If an employee is in sales, then exactly how much do you expect them to sell in any given period? If they are in customer service, exactly what customer satisfaction score do you expect them to achieve? Set the right targets and you will begin to see a team of employees that is suddenly focused on the same things that you are.
3. Define clear business processes for your employees. Just as you want to set clear expectations for employees, you also want to clearly define how exactly you want them to perform key business processes. Otherwise, it will be too open to interpretation and you will likely be disappointed in how they do their jobs. Most importantly, you will find that without clearly defining and documenting how your business processes should work, your employees will never perform their jobs the same way you would (or did when you were the only one at your company). I have yet to be in a situation where I over-defined how someone should do his or her job.
4. When hiring employees, remember that cultural fit is just as important as raw skills. Too often, we as entrepreneurs tend to gravitate to people that appear to have strong skills on paper. This is especially true when we are trying to hire for a position where we are particularly weak. However, it is important to remember that most skills can be taught, but cultural fit with your business and individual personality can’t be taught. In the various businesses I’ve run, I’ve always had more success when hiring employees that were great cultural fits – even if they didn’t have all the exact skills I would have liked – rather than the other way around.
5. Don’t be afraid to fire employees. No matter how good you think you are at hiring, you’re never going to get it right 100% of the time. You’re going to have times where you think you have the perfect candidate, only to find that they aren’t what you expected them to be. Rather than beating yourself over it or trying to force someone to work out who never will, it’s important to fire an employee as soon as it occurs to you that it may be the best thing for your business. I can’t tell you how many times I waited too long before hiring a problem employee – and I’ve literally never regretted firing any of the 30-40 people I’ve let go in my various businesses over the years. Your business will always be better off when you clear the way for the right employees to join your team. Hiring, managing, and firing employees will never be easy. Many times, they will be the biggest source of stress and frustration. But the reality is that, in most cases, you can’t build and grow a great business without employees, so it is important to master this science and art.
The above small business lessons won’t necessarily alleviate all of the stress, but it will certainly help quite a bit. Learn more by attending our free online Small Business Boot Camp training course. this science and art. The above tips won’t alleviate all of the stress, but it will certainly help quite a bit. Learn more by attending our free online Small Business Boot Camp.