People are complicated. That’s a key finding from the 2011 BRW Fast 100 survey.
Of all the difficulties of starting out, staffing topped the list, with 26 of the respondents citing it as a bugbear.
Last year, 47 of the Fast 100 rated human resources management as one of the biggest issues the company had faced.
Those numbers are born out of some difficult experiences and hard lessons.
Telecoms outfit Telair
faced what many would see as a nightmare staffing scenario. The company lost more than half its people overnight.
“It was a tough one for us,” says Edward Wenman
, the company’s managing director.
But that was not the end of Telair’s problems. The company was left very short on people – it lost four employees from a staff of 11, leaving it with only two non-sales staff. The impact was huge. Without enough staff to service customers, the company lost about $1.2 million of annual revenue over seven weeks, in effect wiping out
its growth from 2010 to 2011.
To get past the troubled time, Wenman promised staff to make better hiring decisions.
Since then, with a renewed focus on hiring the right people, Wenman has seen a big
turnaround. “We’ve got, I believe, the best team we’ve ever had,” he says. “We don’t have any issues with any of our staff.”
A key problem for some is moving too hastily to recruit and not ending up with the right people.
Prolux Electrical, a firm of electricians, saw at first hand the financial and managerial impact of recruiting in a hurry.
“I had to recruit within three days,” the company’s managing director, Alex Lamblin, says.
“Unfortunately, the candidate could not perform to our standards. I could only work with what was available at the time and it backfired.
“I went through two more electricians before I had the right mix. As a result, the overall management and quality of the project slipped. That consequently cost me financially and put a dent in my credibility.
“During the whole process, I had to step in and fill the gaps. The project went for 12 months and consumed about 16 hours of my week for about 20 weeks.”
Another Fast 100 member, residential construction company Palladio Homes
, made a mistake at the beginning, which slowed the progress of the business.
“I did not raise enough initial capital,” managing director Brad Fullin says. “The consequence was that I was not able to hire the right people to begin with, which resulted in slower growth than I had anticipated. Instead of getting it right first time, I had to undergo a number of staffing changes.”
Losing a chunk of staff is also a tough problem. Not only does a company have to recruit to replace those it has waved off, managers also have to stem the exodus before it causes further damage.
At maintenance and asset management consultants Assetivity
, staff turnover was very low for a while – the firm lost no staff for 18 months.
Then, within a six-week period, six of the company’s 35 consultants resigned. Of those who chose to leave, there were a number of highly valued employees.
Director Sandy Dunn says Assevity’s management had to act fast.
“We immediately undertook one-on-one discussions with the remaining employees, as well as exit interviews with those that were leaving, to try to identify what was going wrong,” says Dunn.
What came out of those conversations was that the company was changing, in transition from being a small business to a medium-sized concern. With that change, Assetivity needed to upgrade its internal systems and processes and take a hard look at the way they managed people. Staff were looking for direction, structure and guidance.
“While we always recognised this was going to be required, the speed and step-change nature of this requirement came as something of a surprise.”
Assetivity hired more support staff in human resources, marketing and information technology and is now “working much more effectively towards making the necessary changes”.
The company has had only one resignation since then, Dunn says.
But despite the many stories of pain, 98 of the Fast 100 expect to hire more staff this financial year.
How they go about this will likely determine how successful they will be.
Among Fast 100 members, getting the right person with the right set of values, an employee and colleague who will dovetail into the company’s culture, can rank ahead of qualifications and experience.
“We have a PLU recruitment strategy – this stands for ‘people like us’,” Spirit Telecom managing director Geoff Neate
says. “It works well. The culture comes first, their capability comes next.”
Implicit in that approach is the view that while an employer can teach employees what to do, they cannot give them personality transplants.
“I always let them know that we provide the highest quality service and workmanship and I expect only the best,” he says.
“We have stringent policies and procedures in place. I can tell by their reaction if they will be suitable of not. Some think I am joking, others seem to be impressed.”
Prolux Electrical’s Lamblin says: “I have always been a firm believer in recruiting from attitude, not skill. You can teach the skill, not the attitude.” Telecoms wholesale aggregator Partner Wholesale Networks
also looks for the right personality types.
“[I] just always look for excellent personal qualities over highly qualified [or] experienced career shufflers,” co-managing director Graeme Kelly says.
Another well-trodden path to hiring the right people is through employee referrals. Many Fast 100 companies offer finders’ bonuses to staff for drawing in quality recruits.
UNLTD Energy, a renewable energy company, advertises new jobs internally.
“We always offer roles internally,” chief executive Kieron D’Arcy says.
“If a staff member knows someone they believe is capable of fulfilling the role, they will recommend that person.
“If the person is recruited and stays beyond the three-month probation, the staff member receives a $1000 spotter’s fee.”
Quantum Change Seminars, a company that provides personal development programs has found recruitment tough but has been happy with the results when it had former clients working in the office sending job offers to their friends.
Networking is also seen as a route that spawns results in recruiting.
Fast 100 members Brasco Australia
, a packaging company, and recruitment firm LSA Recruitment Group
cite pressing the flesh as a good way of picking up quality staff.
Digital agency Amblique
also relies on its network of contacts, in part, to find the people it needs.
Employers have to keep an eye on the career paths of their potential recruits. Does the role offered give their new recruit a chance to make progress and learn?
That needs to be a consideration, says Ian Mills
, the chief executive of web design provider for small business Magicdust
“There is one incredibly effective recruitment strategy that we have learned to always fall back on regardless of the applicant’s qualification, experience and expertise and that is whether the job is the next best step for them, both professionally and personally,” he says. “It requires empathy and judgment that transcends the choice of the applicant.
“Quite often an applicant will be willing to take a position even though it isn’t actually the best next step for them.”
It may seem a real coup to get a staffer who has more qualifications or experience for a role, in that they may be able to bring their expertise to the business, and potentially, be hired on the cheap.
But if it doesn’t look like a move up for them, they are likely to become demotivated quickly and may soon move out.
People who are willing to take a pay cut are also a bad idea, says Mills.
“We have learned that this is a big no-no. We just won’t do it. It can be incredibly tempting to employ them in situations like these, however if it isn’t a good progressive next step for them; their motivation will undoubtedly expire, their longevity will always be uncertain and they won’t be an investment in the long-term future of the business.”
When recruiters get it right and find the new employee that is a good fit, the morale of the whole business benefits, says Mills.
But if it is all wrong and the relationship isn’t working, it’s worth moving quickly to fix the situation.
“Fire fast! If they are not right for the position, move them on quickly,” says the chief executive of payment provider eWAY, Matt Bullock
Sometimes external events will provide a business reason to make the tough decisions.
The global financial crisis forced human resources consultancy Pinpoint HRM
to shed a staff member.
“We had some difficult discussions and made someone redundant [which was appropriate given the slowdown in demand],” chief executive Craig Aunger says.
But that gave the company the opportunity to restaff, putting it on a better footing.
“Once the demand picked up, we hired more senior people and got a better gender mix into the business [now roughly 50-50],” he says.
Whatever choices Fast 100 members make, their decisions on staffing are set to be pivotal. And they know it.
According to the Fast 100 survey, 41 rank it as one of the biggest issues facing their business in the year to come.