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13. HR Essentials Interviewing and hiring the right employees can be surprisingly challenging, but is cri5cal for assembling the best team. There are a lot of candidates out there; in this chapter I explain how to ﬁnd and hire the right ones for your business and posi5on. I also delve into some important human resources procedures, such as proper methods and forms for hiring and termina-ng employees, and best tools for managing managing payroll and beneﬁts. Employees are the bedrock of your business, learn how to manage them properly for mutual beneﬁt. Interviewing Candidates Finding, veBng, interviewing and hiring the right candidates for a posi5on is more challenging than you might expect. I’ve conducted hundreds of interviews, and s5ll ﬁnd it diﬃcult to discern what an employee will really be like on the job. It’s best if you have a referral from somebody you trust, but in cases where you don’t here are a series of ques5ons and red ﬂags that help me separate the right candidates from the wrong ﬁt: Chapter 14: HR Essentials Ques5ons to Ask “What’s your ideal position?” I want to hear the in candidates’ own words what their dream job is, or the posi5on they are eventually working towards in their career. You’d be surprised how many 5mes people will describe a posi5on that doesn’t exist or is unrelated to your business; this is probably an indicator that they won’t be around long term. “What do you know about my company?” This is a common ques5on, and simply tests how much they know about your company. If they’re not familiar with the basics of your company, such as the service it oﬀers and how it makes money, then they’re not taking the interview seriously enough. “What do you do better than anything else?” Quick Tip This ques5on encourages the Watch this video and check out this article Chapter 14: HR Essentials candidate to self-‐iden5fy their strengths, so that you can for a more in-depth evaluate how it ﬁts into your exploration of topics company’s needs. and questions to ask. “What’s feedback you’ve gotten from a previous manager on an area you need to improve?” If they say they’ve never goNen feedback, ask them to imagine what their manager would say. This is a bit of a seman5c trick, because it takes the self-‐cri5cism out of their hands and allows them to describe their weaknesses from the perspec5ve of a third person. They will tend to be a liNle more honest about their need for improvement. If they can’t iden5fy any weaknesses, this might be a red ﬂag down the line; you don’t want to work with employees who aren’t self aware, or can’t see room for improvement. One Strike Rule I have several red ﬂags that immediately ruin a candidate for me: If somebody is unprepared for the interview, I get the sense that they’re not being truthful, or they come oﬀ as arrogant, these usually eliminate them as poten5al candidates. For me, I hire by a one strike rule. The amount of -me, energy and eﬀort that you all spend trying to improve an employee can be very detrimental to your business. In my experience I’ve found that a Quick Tip candidate either has a set of Chapter 14: HR Essentials quali5es that you’re looking for, with the poten5al to grow into a Check out this video great employee through for red ﬂags to look encouragement and mentorship, out for during the or they don’t. interview process. It might be hard to turn down candidates, especially if you really need to ﬁll a posi5on, but trying to force a candidate into a posi5on they don’t belong is like trying to ﬁt a square peg in a round hole; it’s a waste of -me. In the long run, you’ll save a lot of 5me, money and energy by trus5ng your ins5ncts about a candidate. Over the years, I’ve found that lot of being a business owner is about trus-ng your ins-ncts and inner voice. Good Management As the founder and CEO of my company, my business is my priority in life. When I’m working I pour 100% of myself into my work. Even when I’m not at work, 50% of my brain is s5ll thinking about my business. When I ﬁrst started working with people, I no5ced that not everyone worked at the same intensity level as myself. I started to wonder Chapter 14: HR Essentials whether it was something I needed to accept, that these were just diﬀerent working styles. AZer six years as a CEO and manager, I can tell you that I’ve decided no, I’m not prepared to compromise with the caliber of people I hire. Your organiza5on can only be excep5onal if it’s made up of high performing people who love what they do, and take tremendous pride in the quality of their work. People work at my company, not just because they need to make a living, but because my company aﬀords them the opportunity to do something unique and fulﬁlling every day. Many of them could ﬁnd other jobs, or start their own companies, but they choose to stay and always do their best work. I can tell you right now, the majority of people are not like this, and it’s diﬃcult ﬁnding people who match your level of intensity. Once you hire great people, being the boss doesn’t mean simply telling your employees what to do. This will lead to resentment, and doesn’t foster a sense of accomplishment, collabora5on and autonomy. Chapter 14: HR Essentials As a leader, your role is to set a clear vision of overall goals, lay out the most important tasks that need to be completed, and then lead by example. Be mindful of where employees are coming from; be sure that you’ve either experienced, or are willing to carry out any tasks that you’ve delegated to someone else. Always communicate very clearly not only what you want the employee to do, but how they are helping you meet key goals. Most employees aren’t looking to be told what to do, but for somebody to conﬁrm what they’ve already planned to do. Hiring & Firing Employees In this sec5on I’m going to dive into the nuts and bolts of hiring employees and leBng them go. There are several documents and procedures you should have in place to make sure these processes happen smoothly, and to avoid any issues down the line: Documents for Hiring & Firing Chapter 14: HR Essentials Job Application Background Check You will need a ﬂow for I would recommend candidates to ﬁnd, geBng a background understand and apply for check on any employee the posi5on. Some you hire, too keep an companies use a job eye out for any criminal applica5on, while others history or red ﬂags. just write job descrip5ons Note: you always need with requirements and post to get the candidate’s them on job boards online. permission. Offer Letter Employment Agreement Once you’ve decided to The next step aZer the hire a candidate, you’ll oﬀer leNer is the want to give them an oﬀer employment agreement, leNer, a non-‐binding which states the terms of wriNen statement of the employment. The basic terms, the job, and document will also what compensa5on you’re include a conﬁden5ality oﬀering. agreement, and a sec5on where the employee acknowledges the fact that the intellectual property they produce Chapter 14: HR Essentials Employee Non-Compete while working for you belongs to the company. This agreement prevents To learn more about employees from pursuing a important Employment similar profession with Agreements, check out compe5ng companies. this video. Release of Claims If you’re leBng an employee go, it’s important that you get a release of claims agreement signed, which means that the employee is agreeing not to sue the company. To get a former employee to sign this, you oZen need to oﬀer some sort of beneﬁt, such as a warm recommenda5on for their next job. Types of Workers There are two main types of workers, employees vs. independent contractors. Contractors are less hassle because they require less work on the part of you as the employer, but if a worker meets the criteria of an employee you must treat them as one: Employee An employee is somebody who works for your business Chapter 14: HR Essentials under your direc5on and control. Employees tend to work in the oﬃce, and use company materials to do their work. You are required to take the appropriate amount of federal and state taxes out of their paycheck. Independent Contractor The main diﬀerence between an employee and an independent contractor is a contractor is paid a set fee to complete a project or series of projects, and you don’t have to take anything out of their taxes. They work more independently, and don’t need to be in your oﬃce. Paid vs. Unpaid Interns Interns may be a temp5ng op5on for a business on a budget, but keep in mind that you may be legally required to pay your interns, depending on the state. You may, however, oﬀer unpaid internships if they’re receiving college credit or signiﬁcant training and mentorship. In either case, make them feel like an important part of the team by giving them an oﬀer leNer and congratula5ng them for being chosen. Chapter 14: HR Essentials All employees will fall into one of two categories: Exempt Employee Non-Exempt Employee An exempt employee is This employee should be somebody that works in paid hourly, and is a salaried posi5on, and en5tled to over5me in can legally be exempt cases when they work from over5me. Typically over 40 hours a week. applies to managers or Typically applies to more a technically trained task-‐based jobs with less workers. decision-‐making. A Final Note on Termina5on One ﬁnal thing to check is whether your state is an “at will” state. California is an “at will” state, which means employees are working by their own choice, and the employer is hiring them by their own voli5on as well. Either party may decide to end employment at any -me. However, even when leBng employees go in an “at will” state can occasionally lead to a s5cky situa5on. A former employee may, for example, ﬁle a discrimina-on claim Chapter 14: HR Essentials arguing that they were unfairly terminated or treated improperly. These lawsuits can be expensive and draining, so it’s important that you ‘re mindful of how you let employees go. If you’re considering ﬁring an employee, be sure that you’ve been giving them consistent feedback on the things that you expect from them, and where they have fallen short. Make sure some of these conversa5ons are on record, whether through email or other performance evalua5ons, so that you can prove later on that they were terminated due to their inability to perform at the level that was expected. Payroll and Beneﬁts You may be tempted to handle payroll yourself, but I’d strongly suggest you let a payroll company like those I list below handle employee payroll and taxes. There are two other things to remember with regards to beneﬁts: 1) If you oﬀer a beneﬁt to one employee, you’re legally required to oﬀer similar beneﬁts to the rest of your employees. Chapter 14: HR Essentials 2) If you let an employee go, they are en5tled to be compensated their salary up un-l that point, as well as any unpaid vaca-on or bonus -me. This is something many employers overlook the ﬁrst 5me, be sure not to get tripped up with this mistake. Payroll Services • ADP These are popular payroll and • Trinet HR services I’d recommend for your business: • Paychex Resources Recap • HR and Employee Management (course) • Interviewing Candidates • Ques5ons to Ask (video) • Interview Ques5ons (ar5cle) • Red Flags to look out for (video) • Hiring and Firing • Hiring Documents (document package) Chapter 14: HR Essentials • Job Applica5on (legal doc) • Job Descrip5on (custom doc) • Employment Applica5on (legal doc) • Employment Agreement (legal doc) • Important Employee Agreements (video) • Employee Non-‐Compete Agreement (legal doc) • Employee Release Agreement (legal doc) • Payroll Services • ADP • Paychex • Trinet
"13 - HR Essentials"