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role in determining the need to hire
additional help. A few examples of some sim-
ple yet important metrics you might consider
monitoring could include sales per employee
(monthly and annually), daily/weekly orders
processed, daily/weekly orders shipped, back-
log of unentered orders, volume of inbound
calls and volume of outbound calls.
Measuring credit memos written for incorrect
or late orders can also be used as a barometer
of an effective and productive workforce.
As a business owner, you can and should
monitor a number of different metrics. But
it’s important to make sure the data and
information used to calculate those metrics
are reasonably easy to accumulate and assem-
ble. You want to measure the work you are
doing rather than create more of it. Post the
results of your measurements in the break
room or in a common area, some place where
all employees can see it. The interesting thing
about measurement is that employees tend to
perform at a higher level when they can see
and monitor their own progress. Use the
measurements to set goals. When goals are
met, reward employees with lunches, paid
time off, gift certificates or some other
method to express appreciation for a job well
done. If goals are missed, it’s important to
understand the causes and reasons for the
poor performance. If you do, it should help
you make an informed decision about
whether you have a productivity issue or sim-
ply need more manpower.
Address The Need
If you find that, no matter how focused
you are, your productivity metrics just don’t
seem to be improving and you continue to miss
key dates and deadlines, and you routinely dis-
appoint customers, then it may well be time to
take hiring action. Each company is different
and there’s no magic formula or silver bullet to
let you know when the time is right. However,
there are some things to look for.
Determine where the need is greatest. In
times of rapidly growing sales it may be a
customer service or order processing posi-
tion that a distributor will need to fill. For a
supplier it may be additional manpower on
the shop floor. In either case, when sales are
growing quickly companies will need to hire
and train employees sooner in an effort to
stay ahead of the curve. Determine if the
need is a short-term situation or more likely
to be a permanent, long-term need. If it’s a
short-term demand, you may want to con-
sider alternatives such as temporary services,
mandatory overtime or shift options (for
suppliers) to fill short-term spikes in
demand. If the need is longer term or per-
manent in nature, the best option is likely
hiring a new full-time employee.
Hiring a new person can be exciting but
it’s also an important undertaking, so use care
and be diligent when hiring for the long
term. Resist the temptation to hire the first
candidate who successfully fogs a mirror just
because you’re under the gun and feel pres-
sured to get the position filled. Instead, take
the time to interview numerous potential
candidates. Work hard to find and hire well-
qualified, educated employees who have the
skill sets needed to perform not only the
position they are being hired for but also
those who are capable of growing with the
company over time. Hiring people who are
“promotable” is good for both the company
and the employee, and many times will result
in greater job satisfaction and longer tenure.
Hiring a new employee will incur budget
constraints. Hire the most qualified individ-
ual you can afford but remember you must be
profitable and make money to be able to
afford new staff. If your business does not
turn a profit, you can’t pay your employees.
Time of hire is also the perfect opportu-
nity to have new employees execute a non-
compete/non-disclosure agreement. At some
point, most employees will almost certainly
have access to proprietary material and/or
trade secrets that have been developed over
time within your company. It’s important for
the employee to understand that this infor-
mation belongs to you as the business owner.
It cannot be shared with others and cannot
be taken by the employee in the event of ter-
mination. A clear, well-written non-compete
agreement executed at the time of hire will
convey these important points to the employ-
ee before he or she gains access to the propri-
etary material. Note that each state differs in
terms of enforceability of non-compete
agreements so be sure to consult your attor-
ney for advice when creating them.
Manage, Move Over or Move On
Everyone has different professional abili-
ties—some people are very effective managers
but lack the sales skills necessary to sell cold
beer to baseball fans on a 90-degree August
afternoon. Then there are others who could
easily sell snow to Eskimos yet don’t have the
knowledge or experience to effectively man-
age people. The point is, once you hire good
employees it’s important to retain them.
Effective management practices along with
job satisfaction are often the keys to retention
and low-employee turnover. As a business
owner, your employees are your most impor-
tant assets. If you are either unable or unwill-
ing to effectively manage them, you need to
find someone who can.
We’ve seen several instances over the years
where business owners have hired employees
to run their operations. Many times owners
remain involved but in a capacity which
allows them to focus on their strengths. In the
case of distributor companies, those strengths
are typically centered around sales. Supplier
companies are a little less predictable, but
operations and finance are areas where an
owner tends to gravitate when not function-
ing as president or general manager.
Sometimes simply moving over and
allowing someone else to run and manage the
business isn’t a good option. As a business
owner you may have grown the company to a
point but don’t have the wherewithal or
desire to take the risk of getting it to the next
80 •
PPB
• SEPTEMBER 2015
THINK
Five Key Considerations
When Hiring
1. Make sure the need to hire is real
through use of productivity meas-
urements.
2. Determine if the need is short or
long term and hire accordingly.
3. Keep budget considerations in
mind. You must be profitable to
hire new employees.
4. Be diligent when hiring. Take your
time, screen many candidates and
hire the most qualified person you
can afford.
5. Make sure effective management is
in place to oversee new hires and
employees in general which will
lead to greater job satisfaction and
lower turnover.