Many business leaders are expressing optimism heading into 2012 on the heels of recent economic news from the Bureau of Labor and Statistics. In an economic release on December 20, 2011, the BLS reported that Oregon achieved a 1.5% decrease in the unemployment rate from November 2010 to November 2011 as the rate dropped from 10.6% to 9.1%. The national unemployment rate also decreased from 9.8% in November of 2010 to 8.6% in November 2011. The downward unemployment trend and increase in job growth seems to be providing encouragement to the business community.
As businesses begin to hire, whether they are in start-up mode or in a growth phase, it is important to have a hiring process in place and that all hiring managers be trained. Diligent and consistent use of a process will lower the risk of costly turnover. Though there are several elements that enable effective hiring, here are three tips to consider:
Tip #1: Classify Employees Correctly
The IRS has continued to crack-down on employers for misclassifying workers as independent contractors. There are several risks of misclassification, which include: paying retroactive payroll and income taxes plus penalties, wage and overtime claims, workers’ compensation claims and unemployment insurance claims. Classification is determined on several factors, which include but are not limited to:
- The length or job / permanency
- The worker’s investment and supply of tools, equipment and materials used to perform the job
- The ability of the worker to determine his/her own schedule and hours
- The insurance/financial responsibility maintained by the worker to support his/her business (includes filing business tax returns)
Read more about the criteria on the IRS website.
Tip #2: Screen Applicants Thoroughly By Using Resumes, Job Applications, Background Checks and Reference Checks
Screening tools are a vital piece of the hiring process that should not be overlooked. Always have an applicant complete a job application in addition to submitting a resume.
Key areas of applications and resumes are:
- Frequent job changes
- Professional goals stated and how applicable are they to the position and company
- Gaps in employment dates or vague dates noted on their resume/application. Salary history and how it relates to the pay range you are offering
- Reasons for leaving jobs
- Incomplete applications
Reference and background checks not only help gain additional information concerning a candidate’s fit, but they can also help avoid negligent hiring practices. For reference checks, keep the inquiries job related, and talk with supervisors and professional connections.
Tip #3: Use Behavioral & Situational Based Questions during the Interview
Most people need training on how to effectively interview candidates. Two techniques that are highly recommended are behavioral based questions and situational based questions. Questions should not only be related to the essential job functions, but also company culture. Be sure to prepare for the interview by reviewing the resume and application in detail, by having specific questions based on the desired knowledge, skills, abilities and culture fit, and by doing more listening than talking.
Situational Questions (“What if…”)
– Asking the candidate to describe how they would handle a certain situation applicable to the role for which they are applying.
Behavioral Questions (“How did you…”)
– Asking the candidate to describe how he/she has handled specific situations in the past
By following these basic guidelines and ensuring hiring managers are trained on strategic and legally appropriate practices, employers significantly improve their chances of hiring the right candidate and protect the company from unnecessary risk. A thorough and objective hiring process will provide efficiencies to recruiting and retaining excellent candidates to insure a productive and successful workforce.