Terri and Steve Cowan, co-owners of professional salon Concepts (PSC), in Joliet, Ill., were content to hire one person at a time as the need arose, until they were faced with sudden turnover, last year. They needed to hire four people at once, all of whom would then be tied up with in-house training for 30 to 90 days. The small crisis persuaded Terri to revamp her recruiting and hiring process.

She decided that in order to have a constant stream of potential salespeople, she needed "a 365-day-a-year recruiting campaign." She also wanted to find a way to integrate new hires more smoothly into the company, which distributes beauty-salon products. Though the Cowans' new hiring system involves several steps, the two most effective innovations are these:

* Referral bonuses. PSC hands out up to three rewards to a salesperson for each new salesperson he or she refers: $100 after the recruit has been working 30 days; another $100 on the employee's six-month anniversary; and $500 after the employee has completed a year.

The benefit of this approach? "Steve and I can't cover the whole job market by ourselves. This way, we have 15 extra pairs of eyes," explains Terri. Moreover, she likes the idea that her "consultants," as PSC calls its salespeople, are talking about the company to their friends. "If we like whom we have [on staff], we'll like whom they recruit," she concludes.

* Team interviewing. Terri interviews all referrals, asking the best candidates back for team interviews. She organizes her 15 consultants and five department heads into five teams. Starting at about 5 p.m., each candidate is interviewed for 20 minutes by each team. Every interviewer ranks the candidate on a list of the 20 to 25 attributes PSC is looking for. After the marathon interviewing session, the grades are tallied, and the highest-ranking candidates are asked back to be interviewed by Terri and Steve.

Using the new approach, Terri finds her consultants much more enthusiastic about new hires. Previously, she found herself "selling" her new hires to employees, who were often skeptical. Now the teams have a vested interest in seeing the new person succeed -- so much so that training new hires now seems effortless to Terri because everyone else is being so helpful.

Two other benefits were unexpected. Applicants who went through the exhaustive team interviews raved about them. They learned much more about the job than they could have through conventional interviewing techniques. Two applicants who didn't make the grade are so enthusiastic about PSC that they continue to call Terri, hoping to find a route into the company.

Second, the technique has helped PSC with its fundamental business -- creating a menu of products and services that help beauty salons improve their operations. "Salons don't think of innovative ways to hire," Terri says. "Knowing about this hiring approach adds to their bag of tricks."

-- Researched by Michael P. Cronin