Employee Hiring

Related Terms: Employee References; Employee Reinstatement; Employment Applications; Employment Interviews; Resumes

Hiring employees invariably involves a certain formality—even if the business is very small and the person hired is a member of the family: at the very least, mandatory forms must be filed with the federal and state government. The bigger the business the more complex it is likely to be; the hiring process will tend to reflect that. The major elements in the process are 1) the definition of the job itself, often a formal job description rendered on paper, an important aspect of which is determination of the compensation to be paid; 2) a process of recruitment; 3) prospective employee interviews; 4) the job offer and related negotiations (if any); 5) registration of the employee and related introductions and orientations; and 6) some kind of job training which may be minimal or may involve formal training programs. The hire may be a permanent or temporary employee; this status will also influence the process.

Employment of individuals is substantially governed by federal and often also by state law touching upon compensation (the minimum wage requirement), the type of job offered (hourly or salaried), and also on matters relating to discrimination and equal pay for men and women. Hourly workers are covered by the Fair Labor Standards Act and are therefore viewed as "non-exempt"—meaning non-exempt from the FLSA rules—whereas salaried workers are exempt. If the business offers fringe benefits, these in turn are regulated by law. Businesses that do government contracting may also be under regulatory requirements that must be known and respected—lest federal contracts are placed in jeopardy.

Only larger businesses will typically have human resources people whose job it is to keep up to date with changing requirements. In the smallest operations hiring is typically done by the owner; in those of some size the task if often managed by the person who handles most of the heavy administrative work load. But the absence of well-developed "machinery" surrounding the hiring of employees in no way changes the general rules that apply. Indeed, it is good practice generally to dot the i's and cross the t's in an activity that may result in time-consuming difficulties if the hiring process misfires for lack of care, attention, and observance of proprieties.

At the same time, hiring employees is a quintessentially human activity in which personality, fit, and many intangible qualities play crucial roles. In businesses of any size, a new employee changes the company for the better or the worse: in a small business this fact will tend to emerge sooner. For this reason hiring of employees is one of the business's most important management tasks. Doing it well pays high dividends.

DEFINING THE JOB

Writing a job description is very similar to doing planning work: most managers dislike the job but, having done it, learn that it was worth the time. The effort of creating the description brings out crucial aspects of the job not usually consciously considered—which helps later in the recruiting and in the interviewing process. More importantly, a job description helps a prospective employee picture the work and respond (or fail to respond) to it revealingly. To be sure, many jobs do not appear to require description beyond saying: "Wait on customers and help with the stocking." But if the store's primary customers are elderly, or if this is the midnight shift and the employee will be alone in the store, or if the stocking involves using a forklift—then adding such details adds significantly to the job description. Part of the description, therefore, includes the hours to be worked and other relevant context that will help in the selection of employees.

Crucial to the job's description, even if not part of it, is setting the compensation. This may be easy if the job already exists. If it is new, the business owner may wish to consult data offered by the Bureau of Labor Statistics on wages actually paid for specific occupations in an area. This is the BLS Wages by Area and Occupation Program and is accessible on the Internet.

Even if a job description is not actually written, some kind of conscious process by the team engaged in hiring will be helpful. And the job should then be described to the applicant in as much detail as necessary.

Recruiting

Recruitment typically takes place by word of mouth, by publishing an advertisement in a paper or hanging up a sign, participating in job fairs, contact with state unemployment services, or even the engagement of a recruiting firm. Using third parties can be expensive and run as high has 30 percent of the new employee's first year's earnings. All experts on hiring agree that recruiting simultaneously from within and without is desirable, especially if the job represents potential advancement for current employees. Some managements resist this because it potentially doubles the hiring labor, but openness in personnel policies provides good returns in morale. Often the announcement of an opening will result in employees lending a hand to find good candidates outside.

The content of recruitment ads will typically depend entirely not only on the job but also on the competitive environment. Sometimes quite creative approaches are tried when labor is tight—merely to draw potential candidates' attention. The golden rule, generally, is to be straightforward. The job should be minimally described and the approach specified: should the candidate call, visit, or send a resume? Sometimes it is valuable to show the compensation, sometimes it is best left unrevealed. Small businesses typically pay less than large ones (see Employee Compensation in this volume). However, many prospective employees are also scared away by job titles but would apply if they judged the salary within their personal reach. For the small business it is sometimes a very good tactic to add the words "small business" to the language of the ad: this may cause some not to apply while drawing others who want to work in a small business.

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