Lex Wexner was once named by Fortune magazine as one of the "new champs of retailing." He founded retail giants such as Limited Express, Victoria's Secret and Bath & Body Works. By 1990, he had 3,800 stores and five billion dollars in annual sales. Yet, just a few years later, one of his primary retail chains, the Limited, experienced a sharp fall in performance, not to mention its stock value. Attempting to troubleshoot this underperformance, Wexner sought the advice of management icons Jack Welch of GE, PepsiCo's CEO Wayne Callaway and Steven Spielberg. Wexner found that in almost every key performance area, his companies performed as well or even better than those led by these executives. However, there was one critical point of differentiation. All three chiefs stated that the majority of their time was spent on recruiting and developing individuals within the organization. As an entrepreneur, the ability to select, recruit and develop talent is either the key or lock on the potential of the company.


The Power of Personnel

            When hiring someone, one of two things can go wrong: The wrong person for the position can be hired, or the right person can be hired, but the development strategy necessary to enable success has failed. In either case, the employee will probably leave. According to Brad Smart, the author of Topgrading, How Leading Companies Win by Hiring, Coaching and Keeping the Best People, a bad hire can cost a business up to 24 times an employee's salary. While there are no guarantees with people, it's logical to do everything possible to increase the chance of recruiting individuals who fit the company's culture and performance criteria. In order to increase these odds, businesses can create profiles, establish a hiring criterion and determine the personality traits that correspond with the open position in the company.  


Creating the Best Profile

            A profile is created by answering the following questions:


  • Who are your best trainers? If you do not have employees yet, based on your    experience, who are the most effective trainers you know? In your mind, what makes them effective? List all of the attributes you can think of on paper. 


  • Conversely, who are the least effective trainers you currently employ or know? What traits make them ineffective? Similarly, list your answers on paper.


  • What were the conditions that led to ineffective trainers being hired in the first place? Usually, this is a result of a panic response to an emergency staffing need, rather than a purposeful, planned and continuous recruiting initiative. 


    Hiring Criterion

                From this profile, a hiring criterion can be established. This is a rating of the attributes an individual must have in order to become a member of the team, which can range between non-negotiable to "would be nice." 


    Personality Traits

                A common mistake in the hiring process is to assume that past performance is indicative of future potential. An individual might possess traits that are prerequisites for success for the same position in a different culture, but they are the antithesis of the traits that are necessary to succeed in your organization, given factors such as your brand and demographics.  Identifying intrinsic character traits often requires digging beneath the surface during an interview. By questioning the candidate's response to interview questions, you can identify a pattern of consistency. If you ask the interviewee if he or she engages in continuing education, the candidate will likely say "yes." However, follow up with, "Tell me the last three non-fiction books you have read over the past 90 days, and what was one piece of information from each book that you found to be most useful to your professional development?" Brian Carlson of the Parisi Speed School often will ask, "Do you believe that honesty is important in the workplace?" Of course, every candidate says "yes." He will then ask, "Are you honest?" If the interviewee says yes, he will follow up with a question like, "Tell me the last time you lied?" If the candidate says never, the interview is over. Once you're clear about the type of person you're looking for, the question becomes, "Where do I find them?" 


    Network to Create Net Worth

                Often, your staff will have a tendency to associate with individuals who share the same beliefs and character traits. Go back to the profile of the very best trainers who you know. It's likely that they know individuals that share these same intrinsic qualities. Create a structure that compensates current employees or associates for every candidate they recruit, based on the recommended employee's productivity over time. The benefits of this system can be:

                1. You only pay out for an employee who performs. Therefore, you can spend money on ads that don't guarantee a recruit, not to mention a good hire. 

                2. Since your current employee's income and reputation is affected by his or her referrals, he or she will likely be vigilant in the recommendations. This increases your odds of attaining an employee who is a better fit for the company. Considering the cost of a mis-hire and the fact that payroll can consume up to 40% of the operating expenses, the value of selecting someone who is the right fit can't be understated. 

                3. Your employee now has the opportunity to one, earn

    re-occurring income in the organization and two, feels emotionally invested in the growth of the company. This differentiates your compensation plan from the competitors, which potentially can decrease employee attrition. This is important for both team morale as well as your bottom line. 

                4. The employee also has a personal stake not only in the selected person but in the new hires performance over time as well. This is an incentive for the employee to act as a mentor to all of the personal recruits, creating leaders within your company. More leaders mean greater duplication. Greater duplication means greater leverage. Greater leverage means everything!


    Go Where the Winners Are

                In every major city in the US, there is a learning annex, which features seminars on everything from how to remodel your kitchen to how to start a multi-million dollar business for under $500. Learning annex guides can be picked up for free on any street corner. Go through it, and circle all seminars that would attract people looking to acquire new skills, become better communicators and escalate performance in any area of life. Attend one of these seminars twice per month, and set a goal to meet 10 possible candidates per month. It is important to bring your business cards with you to every event. Get the contact information of everyone you meet, and follow up with a written invitation and then a phone call to set up an interview. If you don't have a learning annex in your area, attend personal development seminars in the region on a regular basis. Another recruiting necessity is to attend industry fitness conventions. You cannot afford to miss them, and if possible, bring a small team. Each person on the team can attend different classes and set a goal to collect the contact information of five potential candidates during the event. By recruiting these individuals who attend seminars, you can increase the likelihood of hiring an individual who has greater aptitude. They are an investment more likely to continue to appreciate over time. 

                Marcus Buckingham and Curt Coffman, in cooperation with the Gallop organization, interviewed over 80,000 managers across 400 companies. They found that the top performing managers do four things exceedingly well. They are highly proficient in their ability to select, set clear expectations, motivate and develop staff. If a manager lacks in any one of these areas, regardless of how well he or she performs in other areas, it could be enough to sabotage his or her performance. If the ability to select, direct and develop your staff is the key to the company's success, then take your recruiting efforts as seriously as your marketing initiatives.


                Robert Cappuccio is President of the consulting firm Legacy Performance Solutions. For more info, visit www.livealegacy.com.

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