Hire the right people. Then make sure they can contribute right away.
Making the right hire and making the most of new people once they come on board can energize your business. Here’s how to get started on the right foot:
1. Get a big funnel You don’t want to be overwhelmed with candidates who all look the same, but you do want to have enough candidates so that you can be selective within a large pool. Reaching out beyond your usual go-to sources can uncover skilled candidates you may not have realized were out there. Consider organizations that bring talented diverse candidates through their pipeline, such as Sponsors for Educational Opportunity (SEO) or Robert Toigo Foundation (Toigo).
2. Hire junior potential and senior specifics The further down you are hiring in your organization, the more you are trying to find “true potential” in candidates who one day may be your company leaders. As you hire further up, you need more specific skills, experience, and expertise.
3. Be excited by new talent (and new ideas) I sometimes hear business leaders worrying about hiring someone too senior who might threaten their existing team. New teammates should fit within a culture (or at least be able to accommodate it), but they can also help push your existing team to make it even better. Embrace the opportunity to hire strong talent that can drive your team forward. Who knows--maybe you could benefit from a little push, too?
4. Consider opportunity cost I often tell job-seeking friends that once they choose a job, they are, by default, rejecting everything else out there. The same holds true for hiring—by selecting one person, you’re rejecting everyone else. Use that choice wisely to make sure you get the candidate who beats out the competition.
Now, get them up and running….
The first three to six months are crucial to hires. Here's what you need to do:
1.Consider the J-curve The J-curve describes how most private equity investments perform. At first, the income from an investment is negative as the investor spends money to fix something or make long-term improvements. Over time, those investments pay off, creating income. That initial dip, followed by the upward slope, looks like the letter J. Hiring is no different. Think about how long it will take for hires to pay for themselves, and budget accordingly. Knowing how long it will take to get up that slope will benefit the hire and make it easier for you to plan.
2. Teach them the core of the business first You will feel pressure to get your new employees up and running to drive profits, and you should. But new employees all want to know what the business is “really about”--its core. Focus on this first. Then train them on what they need to do every day.
3. Make them accretive The flip side of providing new employees a good understanding of what your company does is getting them to produce. Use a “return on investment” mindset, investing in these employees early, so they become accretive to your business over the long term.
4. Take a fresh look New employees bring their own expertise and experiences to your company. Tell them to speak up when they see something that was done differently at their previous employer. Coach them on how to share insights with you and your team without implying that things were “better” at the other place—they may have been, but new ideas are easier to accept if they’re framed as suggestions rather than criticism. Encourage open-ended suggestions, such as, “What if we tried it this way…?”
The goal is to hire hard so you can manage easy. Embrace the change new employees bring, and encourage your team to do the same. Ultimately, you will all be better for it.
Based in New York, ED POWERS is a managing director and head of the Capital Access Funds team at Bank of America Merrill Lynch. Capital Access Funds is an experienced, returns-driven private equity fund-of-funds.