Insights From Our CEO: Hiring And Firing Staff: What You Need To Know
Welcome to our exclusive series of personal – and business – wealth management insights from Ajay Wasserman, Founder and CEO of the Fio Group. He is an expert business and wealth consultant to business owners and entrepreneurs to create long-term sustainable wealth.
“As a business owner, I would like to talk to you about hiring and firing staff; remember that employing staff members for your business is a critical task for the business to grow,” comments Ajay.
Are you hiring your employees correctly?
Last year, we published an article called How To (Properly) Interview a Job Candidate. Employers need to understand that hiring staff is an art; it requires a lot of experience, skill, and the correct approach. Please read the following excerpt.
“[A call] to all potential employers out there, an interview process shouldn’t mirror a courtroom cross-examination; when you’re looking to hire a new staff member, it’s vital to be cognisant that you’re investing in the person. There is no way that a litany of ‘Yes’/’No’ questions and direct, side-by-side comparisons of their answers against their CV is going to provide you with the necessary insight into the candidate’s personality to make the correct decision of whether or not they are a good fit for the job role and company as a whole. This misguided ‘cold-call approach needs to be scrapped from your recruitment policies and procedures.”
Please read the full article here to find out the correct approach to hiring top-talent employees.
Your employees are your most valuable asset
Your overarching goal is to grow your business – this includes revenue, brand reputation and client acquisition – all of which culminates in receiving a lucrative return on investment (ROI). To achieve this goal, you need a workforce to perform the required tasks. However, a realistic employee to finance ratio needs to be taken into consideration at the same time for business sustainability purposes.
Imagine this scenario
Your business is seeing impressive growth, and you feel you’ve reached a point where you can expand your client base and service offerings; that’s fantastic, but it means hiring more staff. Your vision is blinkered; the prospect of making millions is all you can see. You hire 20 new staff members based on unrealistic forecasts. Your accountant sends you the latest financial statements a month down the line: cash flow is almost non-existent, and your balance sheet is a mess. What’s your next move?
Many business owners create distrust in their organisations by hiring people. Whenever the figures don’t balance, and you’re accumulating on the wrong side of the spreadsheet, mass layoffs tend to follow. This is not how you run a successful business.
The problem you’ve created
“You’ve broken a fundamental rule: you’ve treated your employees like disposable assets. Unlike bonds or property, human assets have emotion and, in many cases, a family and other dependants. The result: anger, despair and anxiety for employees, not to mention the ripple effect of a bad business reputation. Furthermore, the employees that remain will never be able to work at optimal capacity and feel free to work and follow through on their experience and be themselves because they can’t be sure if another mass layoff may occur,” comments Ajay.
Effective employee management is required
Business ownership and management are a position of leadership that requires employers to find a balance between interpersonal (emotional) skills and objectively assess employees’ contribution to the business’s goals. If you’re inexperienced with handling this type of management task and are feeling overwhelmed, take a breath…in…and…out. We wrote a previous article called Your Guide to Effective Employee Management. Here’s a snippet to help you. “Start off by watching this video presented by acclaimed author and motivational speaker Simon Sinek, entitled, ‘How great leaders inspire action. After watching this 18-minute masterpiece, you’ll have a refreshed mindset and know exactly why your business exists.”
Do you know how to fire an employee legally?
It’s a topic that needs to be looked at from a holistic perspective. “Do not just lay off people because of little mistakes they made. It’s your responsibility as a business owner to make sure they are passionate about their jobs and want to help the company succeed,” comments Ajay.
It’s also vital for employers to remember a legal process needs to be followed if you wish to terminate a contract, or as a last resort, retrench permanent staff. All of the processes and procedures need to be explained in the official employment contract given to the employee when they were hired. If an employee is unfairly dismissed, you may find yourself embroiled in a court battle. Do you need more information and/or check whether your employment contracts are up to par? Speak to an HR professional.
Remember, how you choose to hire, and fire staff can have a splashback effect on your business trust and culture within the organisation. Furthermore, the power of social media can disperse a negative brand reputation to the public quickly. Once your audience finds out, you’ll likely lose the majority’s trust and loyalty; you will alienate them. This can severely impact the sustainability of your business. So, please, ensure that you know the hiring and firing processes comprehensively. It cannot be reiterated enough that investment in employees plays a significant role in a business’s sustainability.
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