Hiring for senior level positions in growing companies, like any other hiring, is a Herculean task. When
hiring a high-rank employee, it is just not employing someone for completing a job, but choosing a
future leader who could lead business to greater heights.
A single wrong hire could prove to be fatal, more so for growing companies, as he/she could possibly destroy years of efforts of the founder(s). However, wrong hiring is very common in fast growing SMEs. This is because of the difficulties in hiring.
It is difficult to hire senior executives in growing SMEs because of the following reasons:
Lack of required competencies of recruiter in other functional areas:
The founding team, with sound product knowledge and in-depth understanding of the industry, are usually involved in the interviewing process of senior level hiring. With strong technical and business skills, it is easier for the team to evaluate a candidate’s competencies in these areas. However, hiring for areas where the founding team has had no working experience or conceptual knowledge is very challenging leading to a potential wrong hire.
One way to overcome this difficulty is to involve a professional hiring agency that will involve experts with the required functional skills to lead the discussion processes in the initial screening stage or talking to candidates referred by friends and colleagues. This could help obtain a genuine feedback on the technical competencies of the potential candidate.
Employing wrong recruitment process
Often, hiring happens with no prior preparation by companies. Interviewers are not sure of roles and responsibilities, skills, personality traits and expectations from the new hire. All this could lead to a wrong person on board.
Setting up standard industry relevant hiring practices for all roles will help solve this problem. Predefining technical and interpersonal skills required for a position, defining job description and desired candidate profile in a clear-cut manner, setting out outcomes from the role in accordance to business goals are important for right hiring.
Understanding the profile of the applicant such as prior experience, type of organizations that he/she had worked earlier, job roles, industry knowledge etc. before the interview is necessary. All this will lead to identifying the most suitable employee(s) for the interview process, who could in turn make a better hiring decision.
Not evaluating cultural fit
Judging a candidate’s cultural fitment is as important as technical competency but quite often ignored while assessing a senior hire. Asking several questions around the candidate’s work environment in the past companies, leadership and work styles, challenges faced and solutions adopted etc. will throw light on the cultural fitment of the potential new hire. Stating company’s current practices during the discussions will help new hires overcome any cultural barriers. Using psychometric tools that assess a candidate’s leadership and personality traits that match the requirements of the company will also minimize the possibility of hiring a wrong person.
Not assessing flexibility to adapt to smaller set-ups
Working in bigger companies is relatively easier because of set processes and large teams in place to support one’s tasks. On the other hand, SMEs operate with lesser financial as well as human resources. It is often difficult for employees who have worked only in large companies to adapt to working with meagre resources. So checking a candidate’s ability to adapt according to business requirements is highly essential.
Hiring too quickly
To fulfill the requirements of fast business growth, many companies feel the need to hire too quickly for a vacant position causing mistakes while hiring. It is good to understand that waiting for a right candidate until the right time is better than hiring someone too quickly under pressure, which could potentially lead to a wrong hiring decision.
To summarize, the difficulties in hiring a senior executive in growing companies and the solutions to overcome the same are mentioned below:
Implementing these hiring practices will help companies make right hiring decisions about the new senior level executives. Hiring the right type of senior executives on board who work on the right tasks at the right time is the key to maintain and enhance the growth momentum for SMEs!
Ms. Uma Bhanu Kondury
Senior Consultant, Prajwal Business Services Pvt. Ltd.
Feedback can be motivating, sometimes de-motivating and sometimes it just does not affect you (depending upon how you take it). Feedback can be received in various forms and from various sources. Broadly feedback can be of two types: Positive Feedback and Negative Feedback. It is encouraging to receive positive feedback or compliments. Though some compliments are motivating; some of them can make us complacent too. It is very important to judge true compliments and false compliments. False compliments are unhelpful and will result in misleading you. Guard against the same!! Negative feedback is tough to deal with. It is easy to get hurt by people with criticism and thus damaging your self-esteem.
So now let us see how you can translate Feedback to Feedforward and make it work for you. The model given below helps in categorizing the feedback you receive in to those which you want to sustain and those which needs to be acted on. You need to critically evaluate the feedback received. Honestly ask yourself if you really deserve the compliment? What went wrong for which you received the criticism? If an advice given to you was relevant? Which success or failure was in fact due to luck?
The Red Boxes are those for which you need to act on and prepare a plan of action. Working on the Red Boxes will help you in achieving a positive change in the areas you want to improve. The Blue Boxes are the ones with high acceptance from the people and can be sustained (only if you are happy with them in their current state).
Arrange the feedback you received in the above matrix. What advice do you want to follow? Which criticisms prompt you to take action? Which suggestions you can ignore? Which are the true compliments which can be accepted
While categorizing the negative feedback those which need action can be listed in CRITICISM box and those which can be ignored can be listed in SUGGESTION. Positive feedbacks are relatively easy but beware of those false compliments. False compliments should be critically evaluated and can be listed in ADVICE whereas rest can remain in COMPLIMENT. You should critically evaluate feedback since this step leads you to prepare an effective action plan. Your judgment of the feedback is very important because no matter what others speak, you are the best judge for yourself! The model helps in categorizing the feedback you receive and will help you in identifying the areas/behaviors for improvement. Identifying and acting upon areas of improvement will help you focus on the future which in turn will result in better acceptance from the people around you. Dealing with feedback and converting feedback to feedforward through appropriate changes in your action/ behavior is an art. And like any other art, this can also be mastered through practice, practice and practice alone.
Pay attention to your thoughts, because they become words.
Pay attention to your words, because they become actions.
Pay attention to your actions, because they become habits.
Pay attention to your habits, because they become your character.
Pay attention to your character, because it is your fate.
-From the Talmud
Senior Consultant, HR Department, Prajwal Business Services Pvt. Ltd.,
Talent identification is becoming difficult
Attracting the right talent is one of the major challenges of your SME owing to low image in the market and fear of job security, discouraging talented job seekers from joining. And your small business typically fills up vacancies through referrals from friends’ circle and employees without much deliberations on competency, skills, past experience and role fitment. Since identification and recruitment of right talent is one of the most important and basic functions of an HR, having an HR in place will play a critical role in the success of your small business.
Your small business is labour intensive, hence compliance with the local laws of the land is mandatory. However, managing it is becoming increasingly complex with the growth of your small business. An HR who is well versed in complying with the statutory requirements will ensure hassle free, smooth and undisrupted business operations.
Framing suitable policies and procedures
Framing effective policies and procedures in line with business dynamics is becoming the need of the hour for the success of your company, with the increase in the number of your employees. A good HR frames up to date policies, clearly communicates them to the employees and ensures smoother implementation while striking the right balance between your company’s requirements and employee benefits.
Managing people performance and talent retention
Systematic tracking of employee performance in a fair and unbiased manner, developing effective compensation strategies for talent retention and prevention of attrition are gaining importance in your organization because of mounting pressures on product/service quality and timeliness.
You, as an owner of an SME are often a one-man army managing Operations, Marketing, Finance and Business Development. However, you believe that spending too much time on people management, employee engagement and other such activities will prove to be costly for the company in the long-run.
Need for employee training and development
Your business is suffering as employees practice old working style and are unable to keep in pace with technological changes, use sophisticated tools and techniques and regularly upgrade their skill sets.
SMEs are often unable to hire a full-time HR manager or executive, despite facing many people challenges. In my subsequent posts, I will be dealing with ways and means to cope up with absence of an HR for your SME.
- Ms Uma Bhanu K
Senior Consultant, Prajwal Business Services Pvt. Ltd.,
1. Seeking a HR consultant’s support:
A management consultant helps companies with his strong knowledge of business fundamentals and vast experience across diverse industries. These professionals work with several clients and hence encounter different types of issues at workplace. With experience in dealing with different types, range and number of issues, an HR consultant is an expert not only in his domain, but also across diverse industries. Hiring an HR consultant is suitable when unbiased, integrated perspectives for decision making are needed and the same to be smoothly implemented.
2. Obtaining support through HR Advisory Services: Specific employee related concerns that need only specific support can be handled by utilizing HR Advisory services. This option will be useful when complex and operational issues involving work on piecemeal basis for a specific duration are to be resolved. A well versed HR consultant with experience in both HR strategy and implementation will facilitate this this saving your time and efforts and is generally more cost effective compared to an in-house resource or hiring a consultant.
3. Training an existing resource in admin/secretarial or other roles to function as a stand-by HR: Typically in SMEs, a long-standing Accounts or Finance executive or an all-rounder is often seen as an individual responsible for HR related functions including payroll management, statutory compliances and compensation strategy development. Since the employee is already well-versed in some of the most important areas within HR, it is a good idea to develop his/her capabilities in other strategic and operational HR activities by sponsoring/facilitating his/her training programs. The advantages to this approach are: avoiding direct cost of an in-house HR, providing scope for employee development, offering leadership opportunities, reducing monotony at workplace and preventing attrition in the company etc.
4. Outsourcing your entire HR function: Outsourcing HR services are useful to companies to take care of employee operational activities like intense and niche recruitment, employee engagement activities, complex statutory and regulatory requirements, employee database and records and grievances/queries etc. This option will be cost effective when a large HR team is to be put in place. Outsourcing services are suitable for businesses that can disconnect their mainstay business operations with that of their routine day to day employee operations.
5. Insourcing: In consulting industry, this refers to having a consultant working for the company (client organization) as a direct employee for a specific duration or on a specific assignment. While in outsourcing much of the work assigned is done at consultant’s office (especially for HR) in insourcing it is done at client’s premises. In this case, the consultant performs the same duties as that of an in-house resource and also establishes processes, sets up procedures and systematic guidelines to ensure smooth functioning of employee activities in the company even in his absence!!!
Ms Uma Bhanu Kondury, Senior Consultant, Prajwal Business Services Pvt. Ltd., PS: For information about our services in HR space, follow the links below: http://ceo-serve.com/practice-areas/organization-and-people/ http://hrpro.co.in/corporates/hr-services/
As everyone knows, setting up a business usually comes with associated challenges and it requires a united team to weather the initial turbulence and take it to a sustainable level. It requires bringing in clarity at the beginning of the journey so that every team member has a clear understanding of the expectations placed on him or her.
Ten Founding Principles, if addressed right at the beginning of setting-up the enterprise, will make it a successful association until the goal is reached.
1. Have a detailed discussion to check if everyone subscribes to the business idea and are equally convinced of its success and the road-map that is prepared for the business
2. Have an agreement on the roles of each person
3. Set a mutually acceptable objective monitoring mechanism. Communicate at regular intervals through an agreed method..
4. Clearly set the partnership share / share-holding pattern based on the expected roles / contributions
5. Have a formal agreement among partners in place. Seek professional help for drafting the agreement.
6. Set a method for awarding additional share / equity based on the contribution made to the business. This usually takes the form of sweat equity.
7. Some people may not be interested in taking active part in the business but may be interested in supporting the idea through investments. Keep interacting with them at regular intervals and post the progress of business.
8. Build a mechanism to address the differences that may arise, if any, during the course of execution of plan. This may take the form of voting if there are more no. of partners to seeking mentors support where required.
9. Leading partner / active partner / or the one who initiates the idea / who enjoys high equity stake would like to push his way through in all the cases, but remember that the initial buy-in is from this set of people who have subscribed to his idea / role and supported him and he has to take a rationale and objective path to present his cases.
10. Exit Options: One should always build a clause for exit if the going gets tough and the partners have to part ways amicably.
Not much attention is paid in the initial stages as the primary objective is to make the business a success and to prove to the world that they have arrived. However, as the reality sets in, even minor irritants are blown out of proportion and in that process, businesses take a back seat. With some clarity on the roles of various stakeholders, together with an effective communication mechanism and some professional support, start-ups can avoid this unpleasant and uncomfortable situation for everybody and make their business a success.
- - PVS PrakasamFounder and Director, Prajwal Business Services Private Limited
To seek support on deal structuring, investment management and capital advisory, please contact : firstname.lastname@example.org
Entrepreneurs spend all their energies in building the product and business and they hardly have time to pay attention to these requirements. In addition, since businesses are usually non-funded / self-funded in the initial stages, it would be difficult task to earmark funds for carrying out these activities and hence usually is deferred to a later date. In this post, I will be discussing why should entrepreneurs pay attention to statutory compliance.
Hence, dear entrepreneur - pay attention to the requirements of the statute as applicable to your business and comply so that the business could be forward / scaled up without any hassles. Put strict audit processes in place so that you are in well control of the situation. As you know, start-ups with all statutory compliance in place get better valuation from institutional investors as compared to others as the intents of founders on whose idea they invest get clearly reflected through this in some manner.
- PVS Prakasam, Founder and Director, Prajwal Business Services Private Limited
CEO Serve, is a boutique consulting division of Prajwal Business Services Private Limited, which aims to ‘enable growth’ by supporting CEOs/Entrepreneurs in managing and improving their business growth.
To know more about our statutory and other services for start-ups, follow the link below: