27.
Hire freelancers correctly
If you find the notion of firing staff for underperformance unpalatable, then your alternative, again, is to solely hire freelance or contract staff. At the end of the contract the contractor leaves without dispute or disagreement.
If both parties wish to continue, then they can either write a new contract or take a break for a period of time and then subsequently write a new contract when ready.
Remember, the advantage of your freelancer taking a break and working elsewhere, if they are local, is that they will widen and deepen their experience at another firm. This means that if you re- hire in six months or six years, they will have gained new skills and knowledge that can help your business – and you didn’t have to fund the training course.
However, you do need to be aware that contractual staff working five days a week in your office may be treated – for legal reasons – as full-time employees, owing to the dreaded IR35 legislation.
There are some important things you can do to prevent this risk, such as ensuring that your contracts are for fixed periods and are not indefinite. You might also want to look into the possibility of hiring your contractors via an off-shore umbrella company. The important thing here is to get some sound advice based on current accepted practice as this is an area under constant change and development.
28.
Constantly question whether you have the right people in the right roles
The entrepreneur’s key objective must be to know and understand all the potential resources that are available to them and their firm both right now and in the immediate future.
Why?
As your business grows, you will be able to do less and less of the day-to-day activity. You will, therefore, become increasingly dependent on growing a team of reliable people around you.
The ability to grow a team, focus a team, prune a team and re- grow a team is an extremely difficult set of skills to master. Yet it is these skills that you must learn – they will mean the difference between remaining a small businessperson and becoming a successful entrepreneur with a range of businesses.
Of course, each entrepreneur will develop his or her own style.
That’s okay. The key factor in all successful approaches, however, is that the entrepreneur will constantly focus and constantly question whether they have the right people on board and in the right roles.
There is no magic formula for this other than careful planning and using all the recruitment tools you can; as well as some good old hard work and trial and error. Research by Michigan State University tells us that only 14% of our hiring decisions (by interview alone, at any rate) work out for the long term. This is why it is critical to your enterprise to maintain a flexible employment structure, as this allows you to deal with your errors
quickly (yes, you will make them) and without a cost that will destroy your business.
If you are in a new and evolving industry, as many entrepreneurial businesses are, then this flexibility – along with a willingness to use it – will make the difference between becoming a successful company and falling by the wayside.
It doesn’t much matter here whether you are working with contractors/freelancers or full-time staff – in both cases you will constantly need to re-evaluate whether you have the right person in the right role. However, my experience to-date has been that freelancers will tell me that they are in the wrong role before I realise it, but employees will not.
The consequences of this are that the freelancers usually work out the solution themselves – move to another role or find another contract. Employees have a greater tendency to bury their heads in the sand. Therefore, if you are managing a full-time employee team you may have to spend much more of your time questioning whether you have employed the right people than you would with your freelance staff.
29.
Hire better than you need
So what is the staffing solution for a young growing business?
Well, to distil it into a single principle it has to be: Hire people who are better than you or your manager.
Why? Simple – because, as the role grows, they will get better and better, whereas you (or your manager) cannot hope to constantly stay ahead of all your staff or team (and nor would you want to).
And the test of whether someone is better than you is this: When discussing their area of work, do you find that they train you or explain how things work? Or are you always training them? If they are constantly adding to your knowledge, then they are better than you. If the reverse, they are weaker than you.
So, how do you hire people who are better than you when you can only afford junior staff?
Easy – you hire them for one day per week, on a senior rate, until you can afford to buy more time. This way you bring high levels of experience and knowledge into your business from day one, with immense capacity to grow.
Can this work for all kinds of businesses and roles? Well, pretty much yes. If you have too much admin or need the occasional phone call answered, there are plenty of virtual PA services out there. And generally, when you hire freelance PA services, you are still hiring someone with considerable experience who, given the freelance nature of the work, is often over-qualified for the general admin that needs to be done. But, because you are a client – and the experienced PA doesn’t see this as a career issue – the work
gets done with little or no fuss and great speed.
Okay, someone has to physically empty the bins – and you will pick up these jobs in the early days. But if you really don’t want to clean the office toilet, just take a serviced office where these things will be done for you (and be prepared to pay the extra cost).
Can you really hire for the upper echelons of the business on this basis as well? (Say, a top quality manager on one day a week?) Well, think beyond the average job for the moment and consider the role of non-executive directors in large global companies.
These directors work for a variety of different businesses and are not full time in any one. Does their part-time involvement make them a weaker part of those teams? Absolutely not!
And if you could get just one day per month from a senior non- exec director to guide your business would you really turn him or her down?
Many growth businesses are based in incubators attached to universities or research institutes. These places, even if you are not actually based there, will be full of capable and experienced managers who are used to working with a large number of start- up businesses – on a casual, one-day-a-week basis or similar.
To think that you can’t hire top quality people on a one-day per week basis is simply an example of small thinking. The world of hiring skills and talents into your business really has changed and it is critical that you take advantage of these changes if you want to succeed. Hiring slightly over-qualified staff builds a capacity for growth into the very DNA of your business.