Almost regardless of the economy, everyone who you would want to hire is working. You can no longer take the same approach to staffing that you could in a slow economy. Your next employees are currently working for someone else—and your employees are looked at as someone else’s next employees.
Turnover is one of the most expensive events in a company. When turnover occurs the costs include: the lost production when the person leaves, the cost of outplacement, the risk of legal claims by the departing employee, the cost of the time spent placing ads and interviewing, the cost of the lost productivity during the new employees first weeks, and the cost of the lost productivity from the person training the new person. Turnover is inevitable, but we want to be sure that turnover occurs in our quitters and not in our climbers. There are four things we do with employees—we recruit them, we train them, we develop them and we retain them. Do you have a plan for each?
Recruitment—the company needs to convey during the recruitment process the company’s mission. The incoming employee needs to understand what the corporate culture is in the business and be “sold” on being a part of that team. Since the labor market is so tight, we cannot merely recruit the unemployed. The fact is we are going to be taking someone else’s employees—and they are going to be trying to take ours. The recruitment process must be designed to address this issue and get quality employees who are going to stick with the company. First you have to determine your staffing requirements—how many people will you need to have one year from now? Then factor in employee attrition—how many of your current employees were here two years ago? That tells you how many successful hires you will require over the next year. Rule number one—don’t wait for an opening to come about and then hire under duress. Recruiting is an on-going process. If you need 12 people over the next year you should be hiring the best one you can find each month.
Training—one of small businesses weakest areas. Training is not only the technical aspect of the job—if they didn’t have some of those skills you wouldn’t hire! Training is also teaching “your system.” How you want things done in your company. You own the company. You will succeed or fail based upon your system. Never let an employee create your system—teach them to use yours!
Development–a company must offer their people the opportunity to “move up.” This is why growth in a company is required. You may not want to grow, but if you don’t you will die. Failure to grow eliminates the development opportunities of you best employees and causes them to leave for better opportunities. Not all employees want to develop, but your best ones do. Therefore it is crucial that the opportunities within a company be identified and communicated to each employee.
Retention–what keeps your employees working here if someone across the street offers them $1 per hour more? This is where benefits, working conditions, and morale come into play. It can even be argued that development opportunities are really retention devices. There needs to be a plan for retention or you end up with turnover.
I highly recommend “Minding My Own Business” available for sale from this site. The coverage of these topics is excellent.
 One of the first elements of team building in an organization is to clearly define how the team should function and then “sell” that attitude to each incoming employee. For example, “As an employee here we expect three things—that you at all times exhibit a positive attitude, that you at all times work as a team and that at all times you use our system. These are conditions of working here. If you decide that you cannot comply with these conditions, please do not submit your application for employment.”