Entrepreneur Clinic – When To Hire Staff

Monique: Welcome to the Entrepreneur Clinic with me Monique Chambers and this week’s guest is Fiona Ewins Brown, who’s the HR director at CatenaMedia. Fiona would be discussing with us today when you should hire staff and how to manage that process.
So, Fiona, when shouldn’t you hire someone?

Fiona: Very very good question. There’s so many different ways that I could actually answer that. I guess the most important thing to think about, first of all, is that every company is going to be slightly different. So what we need to think about I guess is from it from a startup type of point of view, is that it’s not just about hiring someone, it could actually be about getting someone to help versus hiring them as an employee.

Monique: Okay. Do you mean like an intern or a volunteer type of thing?

Fiona: It could be, it could be that or it could be someone part time or versus, you know, even maybe even a family member in some instances. So, there’s a few things that you need to think through initially in terms of do I actually need help, and some of those that are probably suggest people think about is more case of are you delivering lower quality products, then you would like to are you under producing in order to maintain the quality or you may even turning work down, you may have identified a new revenue stream that you don’t have the manpower to try it out, you need expertise or skills that no one in your team or that you don’t have or you might actually even be getting complaints.

Monique: From your wife or your husband or whatever. [Laughs]

Fiona: From range of people or maybe even from your customers which is obviously the worst situation. So then after thinking through those things, what you then want to look at is the math. Can you afford to actually bring someone in to help you?

Monique: Looking at sort of renumeration, it’s not just the salary one has to look at.

Fiona: Absolutely, it’s very much and not just the salary. It’s a case of overall looking at the cost of versus the value. So yes, you need to pay the person if you are hiring them as an employee,

you need to consider about the equipment that you need to provide them to in order to do the job, do you need to have office space? Now, if you’re expanding and you’ve been working from home, you need to have insurances or benefits that you need to provide to this person workers compensation can be a whole range of different things that can actually make it quite expensive. So they’re worth considering an adding that all up. And as a second, coming back to this cost versus value, think about what is the person actually going to produce? What income are they going to actually generate in the first year versus the cost and how that’s going to affect your operational budget.

Monique: So is there a ratio between your salary versus the value actually that could be brought in by this employee?

Fiona: It’s not so much of a ratio, just that you want the value that they bring into be higher than the cost. [Laughs] As long as that happens, you’re in a fairly good position to actually hire someone, as I said, taking into consideration all of the costs, not just the salary? Yes, if it’s not, if the value that they’re going to actually generate is less than the cost, that’s when you can then maybe get a little bit creative and think about someone part time initially, maybe, as I said, temporary help, or contractor, intern volunteer, as you mentioned, there are a lot of different options.

Monique: Okay, to resource, your business. Fiona: Yes.

Monique: So what point do you need to hire people? Is it How long does it typically take to find someone

Fiona: That’s going to depend on the type of help that you actually need? And that’s probably once you’ve determined whether or not it’s worth it, for the business to actually bring someone in whether you can afford and it’s the right move for you, then that’s the next step is when and where do you need to help? And obviously you need to think about the actual workload, what project pipeline might be, what the upcoming kind of needs and demands. And it might even be someone that you just think he’s going to help you if you’re a one man show at this point. But you need to think specifically around you know, kind of, what is this person going to take off from you. So you can actually hire the right skill set, you’re not just going out to market to find someone to help.

Monique: And is there a way of testing the skills because anybody can put anything on a CV and you can turn up with all sorts of horror stories I can imagine.

Fiona: [Laughs] Yes, very true. So what I’d suggest before even going out to try and hire someone is actually putting together it doesn’t need to be a detailed job description, it doesn’t need to follow a particular format, but some type of a description of the type of person that you need. And by the type of person, I mean, the type of skills and experience that person needs to have, and attributes as well. So what is it the person is going to be doing? And then once you’ve established that, and what tasks and list that down exactly what job responsibilities and then based on those responsibilities, what skills do they need to have? So do they need to be good at planning and organizing? Or do they need to be really good with customers, or do they need to be someone who can be an absolute spreadsheet guru for you, and work with accounts. Generally what I would suggest to anyone in a startup situation that To try and hire someone that people are quite often referred to as a T type of person. And basically, what that means is that they have a range of skills across a whole different type of areas, but then they have specific knowledge in one. So if you imagine the specific knowledge is the, the, I guess, the, you know, downward stroke, from the tea, and then the T bar is the range of skills. And for that, because you don’t want to have someone with to specialist knowledge, because then it limits what they can do.

Monique: Especially in a small business.

Fiona: Exactly. But then at the same time, you do need someone that has some unique experience that they can bring, versus being too generic and to spread across everything. So, that would be, I guess, to give a specific example, if you hired someone who was a complete marketing guru, they, they may have really good knowledge about, specific customer service, you know, channel an inbound, you know, kind of best marketing ideas, but then also maybe be able to really help with SEO and Google AdWords or something like that as well. So, you’re getting a range of skills.

Monique: And I’m guessing in a small business as well, you need somebody not just with this T with a range of skills, but also with a good attitude. Because working in a small company versus working in a large company means you can’t really be that precious about your job title, you might be sitting on the floor stuffing envelopes.

Fiona: Absolutely. As much as there is a list of kind of who to hire, there’s a list of him not to hire. The first, especially for startup, you don’t want someone who’s a manager. Obviously, as the team grows, you need to build those skills. But initially, you need someone that’s very hands on. As you said, sit on the floor, stuff envelopes, whatever is needed, you don’t want someone that’s just in it for the money. When you’ve started your own company, you have a passion and you have a drive for what you want that to achieve. And you need someone else that’s going to come in with that and not just for the paycheck.

Monique: Yeah, I guess you’re spending your physical cash. So you can really see where that money’s going. You don’t want somebody wasting it.

Fiona: Exactly. And then the other big pitfall as well, is you don’t want to hire someone just like you. That’s something that a lot of people fall into.

Monique: Really? [Laughs]

Fiona: You want different skills, you want different ideas, you want someone who can actually challenge you. But be careful, don’t hire someone that’s too different in that they still need to, as you said, they still need to fit into the same type of culture that you want to create in your company. They still have some of the same ideals and they communicate in the same way. I mean, very simply, you don’t want someone if you like brainstorming on a whiteboard, you don’t want someone that gets everything in triplicate version in email. So some of those things, you need to be mindful. But someone different, someone who’s not exactly the same will add more value.

Monique: And so how do you identify what is missing in your own skill set? Because it’s very hard. You see, you do think, you know everything. If you’re an entrepreneur, you’re starting a business, you think you can do everything, and you just need bandwidth. But how does one go about actually recognizing the skill that’s missing rather than I just don’t like doing something?

Fiona: Yeah that’s a tough one. No one really likes to admit any deficiencies on their own part. So I guess there’s no formal answer on that. But I would suggest asking someone that’s worked with you previously, it might hurt to hear the truth. But I would definitely suggest asking someone and then that way, it’ll be an interesting experience.

Monique: Could mean hiring someone actually above you in the sense.
Fiona: In some instances, maybe, depending on the situation. And depending on depending on

what requirement you’ve established, you actually need to have then that that could happen.

Monique: Because it may be you are the fantastic software developer, you’ve created an amazing application, but actually finance, you’re terrible or selling, you’re terrible. So yes, the person who comes in will never be the founder but they may actually be your boss, essentially.

Fiona: Yeah, that can happen. And you do see that with a lot of startups. It’s generally not one of the first people that is hired that anyone kind of maybe hired as the CEO, when I found he has developed a company, but that does get to a point where that can happen. And it’s always a little bit of a struggle to have someone else that comes in and takes over running, you know, kind of what’s been your, your baby and pride and joy.

Monique: So once you’ve established the type of person and the skills that you do need to look for, how do you go about testing those skills?

Fiona: Okay, exactly so we’ve got the job description worked out what we need, then obviously, think about where we’re going to try and find that type of a person, there’s a couple of different ways that we can do that. So then now we’ve got a pool of candidates, we can delve into more about where to find them if you’d like. But once you’ve got those candidates, there are different ways that you can assess. Again, it comes down to what their skills are. There are various different tools online, if you need someone, simply that can type fast and you can assess that. If you need someone who’s good at customer service, there are different role plays and customer service evaluations that you can use. And the same with accounts and those types of things. When it comes down to more of the attributes and things that a person has in how they work; do they show initiative. And, and as we mentioned before, are they passionate about the business; they are the things that are going to be a little bit harder to assess. And what I would always recommend is trying to use behavioral interview questions. And that’s where you’re asking candidates to give you specific examples based on past behaviors. So it’s the premise that past behavior predict future behavior.

Monique: So that could be awful question you always get in an interview, or what’s the worst thing that happened to you in your last job?

Fiona: Exactly. There are some standard questions out there. I try to avoid those because people tend to have the same please, please don’t ask the question of where do you see yourself in five years time? And what are your three strengths and your three weaknesses. Not saying they are bad, however, I don’t think there’s anyone that’s not prepared for those. [Laughs]

So you can use the same type of premise but ask it in a different way, what would your previous manager say about your top skills or what would your previous manager say that you needed to work on? Again, it’s just giving a different perspective.

Monique: And you’ll also hear how they refer to their superior. So you might have an inlink there.

Fiona: Exactly. But with the behavioral questions don’t give up too easily. A lot of people avoid answering them with specific information. So, you know, tell me about a time specifically where you have to go above and beyond to meet a deadline, quite often people will then come back with, oh, in that situation, I would do x y z. That’s not what you want. You want to give them some times he takes some time, think about it. I’d really like you to give me a specific example of when that’s happened to you.

Monique: And I was told once that you should look out for how somebody actually answers the question? How they refer to themselves or if it’s an “I” or a “We”.

Fiona: Absolutely that it’s very important when you’re asking a question about what roles that person that you’re interviewing played, and then they come back with “WE” answer drill down further and say, okay, so. But what did you specifically do? What were you responsible for? And, and as you said, as well, so even body language tells you a lot. Is the person looking you in the eye? How are they sitting forward? Are they engaged? Are they sitting back? Are they defensive? There’s a lot of different things that you can look at, that will give you a bigger picture of the whole person.

Monique: And if you are in a situation where you are actually interviewing somebody, and you just know, it might have only been five minutes, but you just know, this person isn’t going to work for you. How do you get out of that scenario? Do you continue with the interview? Or is there a way to cut that one short?

Fiona: [Laughs] Good question. Unfortunately, there’s no easy way out of it without offending the other person if it’s only been five minutes. And I agree, quite often, you can tell within those five minutes, I would definitely suggest that you try and ask a few more questions to reaffirm your thoughts that it may be initially based on your gut instinct or one thing in particular, that they’ve said, so try and get more evidence to support that decision. So trying to give it a little bit longer and give the person a fair chance. But certainly don’t see through all of the questions that you would maybe ask, there’s no need to waste your time or theres, and then I would just try and very politely and the interview and explain to them that there’s a key piece of experience that they’re lacking, and is absolutely required.

Monique: And if they come back to you with just it was nerves, you can tell the difference between nerves and attitude.

Fiona: You can do, obviously, not hiring someone based on attitude can be difficult, experience is always a key skill, is always an easier and be very careful about what you tell a candidate if you’re not selecting them, because you don’t want to then get into a legal minefield, obviously, of discrimination, all those types of things that you’re under no obligation to give someone a lot of

information or even any information about why you’re not hiring them, it’s polite to do so and to end to give them something, but that’s where I would always link it back to we have found someone with more relevant experience. So again, it’s not so much about them, you found someone who’s even better that’s a little bit softer way of delivering the message.

Monique: What else should accompany be aware of sort of laws and leave and productivity goals and management? What are the things must you look out for when you’re hiring somebody? What do you need to be aware of for your contractual obligations towards that person?

Fiona: There is a lot, which is, again back to the question of, you know, hire someone as an employee only when you need to. If you can initially have a contractor or someone who is a temp or an intern, that will help you legally, it’s a little easier to have someone else actually who bears the burden of the paperwork and attacks and legislation.

Monique: So as a contractor, you would literally tell them, these are your obligations or you would leave a loose job title for them and then once you’re the services are no longer required, you can actually just terminate the contract within one month or whatever the contract suggests?

Fiona: Exactly. So a contract is generally for a period of time. And this is where it can get a little bit confusing of what is a contract of employee. A contract is for a fixed period of time, it can be extended, it can be broken, as you said before month’s notice, but you need to be a little bit wary around that. So only set it for the time that you think you’re going to need it. It is someone that does not work on your premises, they have their own equipment, and they have registered themselves with Maltese VAT at and have their own business set up. So that’s where they’re very much not an employee. And there are quite strict guidelines about treating a contractor like an employee. Again, you can’t dictate when they work, they may work all hours of night instead of during the day, as long as they’re delivering the requirements of the work that you set them in

the contract, that’s the only control that you have.

Monique: Very interesting. So if you wanted to have somebody on your premises, but maybe weren’t in the position to employ, how would you go about doing that?

Fiona: So it’s not as common in Malta as it is in maybe other countries where you can then hire a temp, so you can contact an agency, it is becoming more prevalent in Malta which is great, because it’s a really good service where you can contact an agency and say that you need someone on a temporary basis for a period of time. It can be quite a long period of time, if need be, what you need to be mindful of is that person is not your employee, so they can leave at any time. And when they leave, obviously they leave with whatever intellectual property they have from your company.

Monique: So you mean at any time, they could come in on a Monday, not coming on Tuesdays type of thing or do they have some sort of obligation to you?

Fiona: There’s still some sort of obligation that they have with the company that they work for, which is the recruitment agency. So in most instances, that would be week’s notice or something, however, it’s a little harder to enforce, if someone does just turn around and not turn up.
And they then do have, as I said, that knowledge in their head and the training and time you’ve invested in them, they have been lost.

One of the things that have not mentioned is in terms of other legalities and things to be mindful of, is when you do hire someone in Malta per say, there’s a kind of a fantastic period initially, the probation period.

Monique: Yes that seems to vary in length of time.

Fiona: It does. The standard is six months and six months applies across the board. And within that six months, it’s very much a case for both parties to trial out whether or not this is the right role for the individual and the right person for the role. And the notice period within the probation period is one week. And the great thing for an employer is that you can release someone from the probation period and you don’t need to give them a reason, you don’t need to have gone through any kind of warning process or anything,

Monique: If somebody just isn’t fitting in, or you realize you don’t need that resource or something’s happened to your product hasn’t quite taken blocks away respect, you actually do have a good article that’s really interesting.

Fiona: Exactly. So it’s a great thing. Now, in terms of that you mentioned the timeframes, the only case where you can have a longer probation period, so even extend, so you can never extend the six months, even if someone changes job within the same company, it’s still only six months. But cases where it can be longer, and it can be up to a year is for very senior or very specialized expert knowledge. So, kind of that might be if it was within software development, someone that had a very critical role where there was, you know, that would maybe an expert, a senior architect or engineer or something , but even then, six months should be adequate time to determine whether someone’s right or not.

Monique: But otherwise, you would set that up to 12 months probation period at the very beginning of the contract.

Fiona: Exactly. Yes, right.
Monique: Can you have a shorter probation period, or it’s in your interest to have six months

just in case

Fiona: I think it’s in your interest to have six months, you can take someone off probation at any point that you want. So if you feel that someone’s doing a fantastic job and you want to take them off probation, then you would just notify them as such and that’s it.

Monique: I guess while somebody is on to probation there’s the temptation to continue looking for a job in case they don’t have their role secured.

Fiona: exactly there is that and there’s also you know, people don’t like it when people are on probation obviously so in that instance if you have someone who’s a really valuable employee and is fitting in really well and doing a great job then a way to kind of obvious help them would be to take them off probation.

Monique: Fantasitc.

Welcome back. You’re listening to the Entrepreneur Clinic with me Monique Chambers on campus FM with my guest this week, Fiona Ewins Brown. We’re discussing when and how to hire people.

Monique: So Fiona what elements do you feel a key in a recruitment advert to make sure you actually get the right people applying?

Fiona: It is tough actually writing an ad and getting the ad in the right place as well where you’re actually going to reach the right market is probably the first thing to even think about. There are some great tools now online, things are moving away more from the recent press, which is good. So, how to write an advert? From the job description, and I would always start with the job description in front of me that we’ve talked about. And as I said, it doesn’t have to be a formal piece of paper, just with the list of what the person is going to be responsible for.

Monique: Valuable skills.

Fiona: Exactly. What they’re responsible for, and then what you need in the person and then highlight the top three to four in each of those, because you can’t fit everything into an ad, you just need to prioritize what are the most important ones, and that’s what you need to put in there.

Monique: So if it’s key that somebody speaks German. Do not apply if you do not speak German.

Fiona: Exactly, and that’s where you can use wording like essential, must have, and then you can also put preferable, if there are things that are not requirements, not absolute necessities. However, if a candidate has that you would actually give them priority over someone who didn’t. So think about the language of those things and start it out with what the person’s going to be doing, what they’re going to be responsible for, because you need to have a hook that they’re actually going to apply. It is an ad, you are appealing to get people to want to come and work for you, as well as at the end, then telling them what they need to have in order to actually qualify.

Monique: So you suggested not necessarily placing these adverts in the press, or the printed press at least. Where would one advertise?

Fiona: So in Malta, at the moment, keep me posted, is actually doing some great work in terms of generating depending on the type of role you can advertise online, it’s instant, it happens really really quickly. So you can get it live within a matter of minutes. And then people obviously sending the email applications.

Monique: And so just to sort of wrap up a little, you’ve got a million applications have now come in because you’ve used a popular site or Facebook or whatever else, is there somebody that can help you sift through, are there services available with freelance HR people to come in and do this task because you might be a developer or a product creator. But yes, you’d be able to judge certain things, but you may actually be to show yourself to do the interview or to be able to make the decision you might not be tough enough.

Fiona: Yes, unfortunately, that is lacking. I don’t know there could be people out there, I haven’t come across them, and you may find someone that would be able to help with that. And that’s the downside of trying to do it yourself. The other alternative is to hire a recruitment agency, which is going to charge you around about a 15% fee of the person that you hire their first year’s annual salary and they will do all of that they will just send you a short list of candidates, they will manage the rejections they’ll make the offer, they’ll do everything for you.

Monique: Fantastic. I go down that route, or make sure you do have that probation course in place.

Monique: So thanks very much to this week’s guest. That’s Fiona Ewins Brown.