Businesses cautioned against making panic hires

Even in a tight labour market, SMEs should beware of the temptation to hire just anybody. Because a business that hopes to survive and thrive will need the right mix of people to get through.

New Zealand-based Entrepreneurial Operating System (EOS) implementer and facilitator Vijay Nyayapati said there is no question New Zealanders are in tough times. with labour shortages, floods and the cost-of-living crisis, all of which could lead to knee-jerk business decisions.

Nyayapati cautioned Kiwi business owners not to view job applicants as ‘stop gaps’.

“One of the most significant risks to growing Kiwi businesses is to panic and make poor hiring decisions because it only ends in pain for all concerned.”

With the door almost shut on worker immigration and a Government giving no sign that it plans to loosen its immigration restrictions any time soon, there is not much daylight ahead for struggling businesses.

However, Nyayapati said this employment reality had yet to discount the need for companies to hire the right staff with the right attitude so the business can flourish.

“Arguably, a tight labour market is when companies should think more deeply about employing the kinds of people who can help ensure the business weathers the economic doldrums.

“Just grabbing the first couple of candidates that apply, even for entry-level roles, is usually a ticket to expensive internal and external problems down the road,” Nyayapati said.

He said the wrong people in crucial roles could have a ripple effect that demoralises a broader team and frustrates customers and suppliers.

“I want to emphasise that the ‘wrong’ person for a role does not mean they are ‘bad’ people. That’s easy for some to misinterpret. For example, promoting the most senior engineer in a shop to a manager might seem like a good idea, but what if that person does not have the management temperament or leadership skills?

“Playing someone ‘out of position,’ as they say in the sporting world, can be incredibly disruptive for the business. Even if it threatens to take longer to find the right person, the potential delay in filling the role and the costs of a comprehensive search will pay off,” Nyayapati said.

Sometimes it can be hard to know if a new hire will be a good fit for the company team and culture, Nyayapati said. This is a common dynamic in businesses, and it is why the government introduced the 90-day trial legislation in the Employment Relations Act (for companies fewer than 19 staff).

This trial period allows employers to hire new employees for up to 90 days and dismiss them without reason. Nyayapati said that while this rule can introduce a few nerves on the part of an employer worried they might cross legal boundaries, the legislation is straightforward and should be used strategically.

“Think of the 90-day trial period to build the strongest team, not as a way to test the individual. Your goal should be to ensure that the whole business is working smoothly. Do not be paralysed by the fear of labour laws because, with careful management, you will find that they are generally set up to help both the company and the new hire decide on the best fit.

“After all, the wrong hire can do a lot of damage to a company and therefore for the overall GDP of a country. Getting the balance right is in everyone’s interest,” Nyayapati said. 

Nyayapati offers a few tips for people nervous about hiring correctly:

1. Culture matters

It is assumed, the main reason people turn up to work is to draw a paycheck. But smarter employers will try to create greater drives for their employees to encourage them to put in greater effort.

“Recruiting good people is just half the battle—keeping them excited by offering a compelling vision is far more important. When people can buy into a vision for why they come to work, they will be far more motivated. “ 

Ask yourself: ‘Are staff energised to come to work on Mondays? Or are they just coming to work?’ “Enthusiasm is key to building a strong team,” Nyayapati said.

2. Good leadership

A person with natural leadership skills can be more valuable to a company’s performance than any injection of capital. 

A good leader will learn the strengths and weaknesses of team members and, most importantly, nip any problems with workload (or slacking off) in the bud.

“The wrong staff won’t carry their weight, which puts more pressure on good staff and can mean the good staff choose to leave.

“Dealing with this problem requires inculcating a culture of discipline and accountability. Every business is outcome-based; if there is no accountability, the leaders end up micromanaging their staff which is frustrating for everyone. Pick the right leader, and these problems can be mitigated,” Nyayapati said.

3. Systems over decisions

While leadership at crucial times is important for building the right team, leaders can’t be everywhere at once. To ensure staff remain motivated and can get on with their work efficiently, creating clear systems for all parts of a role can offset any small speedbumps in staff quality.

“Without strong foundations and the right systems, it’s tough to grow, survive and thrive as a business. You can hold on to good people by getting your processes right. If everyone knows what needs to be done and how it should be done, they will have less stress and more motivation,” Nyayapati said. 

For more information go to: https://www.eosworldwide.com/vijay-nyayapati