November 1, 2013
I am slow to hire and perhaps should be a little quicker to fire sometimes,” admitted Eric Schulz, co-owner of AAA Auto Parts.
“I know that many auto recyclers will say they don’t have time to devote several hours to an interview, let alone two or three with a potential candidate. The key thing I’ve learned is that if you take the time to hire the right people it will pay off in the long run.
We tend to hire people and throw them into the fire then we wonder why they leave? Perhaps they weren’t the right people to start with, even though they may have had great skills.
“It’s taken me some time to learn the best way to hire people is to look at their personality and problem-solving skills first, rather than how much experience they have with cars,” said Schulz. “I used to start off with their skills first, but after hiring people who had great skills but didn’t fit into the overall culture of our company I started to see that it was more important that they fit in with our team and the flow of the company culture. I also feel that if we take the time to train our employees properly, it will pay dividends later and we will retain some good employees.”
THE SECRET TO FINDING AND KEEPING GREAT EMPLOYEES
Many businesses look for employees by placing ads in local newspapers, using online job resources, or even turning to a hiring agency. They attempt to attract good employees by offering a good and fair salary and a great benefits package that includes health and dental insurance, paid time off, and retirement benefits. Schulz says he has used all these things, but he has found that the secret to both finding and keeping great people has to do with your own reputation and how well you treat your employees.
“Finding a great employee is just one part of the equation,” said Schulz. “He or she must also want to work for you as well. Your reputation is everything and you never know where your next employee is coming from. If you treated someone in the drive-through at McDonald’s poorly and then they find out it’s you, you have lost a potential great employee. Most people will say that their customer is number one, but I like to say that it’s your employees that are number one. When you treat your employees like they are number one, they will treat the customers that way, too. They will also want their friends to work at your company too and experience the culture that treats them with respect, integrity and takes a personal interest in them. Almost all of our hiring is now done by word of mouth and we’ve reached the point where potential employees are waiting to work for us.”
Schulz says they bring up open positions in their weekly meetings because employees might want a change in position. He finds it tends to work a little like Facebook, in that advertising it to their employees opens it up to all the people their employees know as well. They also offer incentives to employees if they refer someone for hiring.
“There are many great sources to begin to look for great people,” said Schulz. “One of the best that I’ve found is word of mouth. We ask our employees.
“I also actively recruit and go after people who I, myself, have received exceptional service from. The way they treat me is a good indication of how they will treat our customers. I carry business cards with me so I can give them out if I come across someone with potential for our industry. I also keep an active file of potential employees. I go through the applications every four months or so and call applicants to let them know that I still have their applications. I take the time to make contact and to find out if the applicant is still searching for a job, in a new position, or is still interested. This helps establish contact with potential employees and lets the applicant know that you are aware of their potential and that you are still interested. This makes it much easier once a position does open up.”
HOW DO I QUALIFY A GOOD CANDIDATE?
It’s a big job to start to sift through the various applicants and determine which one best fits the position. Schulz says he starts off by eliminating all incomplete or unsigned applications. Then he makes sure references are listed and he asks the applicant to fill out an application even if he or she has given a resume.
“I started asking for an application even if the applicant had a resume after attending an ARA seminar two years ago,” said Schulz. “I learned that the application is a form of contract and it satisfies the legal requirements for Human Resources. They may also list different references than what they have on their resume.”
As an employer, it’s important to make sure your application complies with all state and federal requirements and stays up on the latest regulations in your state. For instance, there is a current battle going on over banning questions about criminal history from applications so it is wise to be up-to-date on your state’s regulations.
WHAT TO ASK IN THE INTERVIEW PROCESS
The interview process is an important part on the journey to qualify a good candidate. Once you’ve established that this person has skills you feel would match the position, Schulz feels that taking your time to interview the applicant several times is key to finding the right employee.
“The goal of your first interview is to make sure that the applicant will fit and get along with your existing employees,” said Schulz. “Avoid asking yes or no questions; instead ask open ended questions.”
Begin by disclosing your drug and alcohol testing policy, Schulz recommends. If there is a problem with that, you don’t want to waste any more of your time or theirs. Then, move on to asking the applicant how much he or she knows about your company and the industry. Basically, you need to get to know your applicant so your goal is to get him or her talking about himself or herself.
“Some examples of the type questions I might ask, include,” says Schulz, “what do you like to do, tell me about your best friend, if I asked your friend or spouse to describe you what would they tell me? If you have a free weekend to hang out with anyone you want and do whatever you want, who would you hang out with and what would you do? Also, you can ask the applicant where he or she would like to be in three, five, ten years from now to determine if the goals he or she has match the goals you have for the position.”
Schulz recommends that after the first interview, assuming you’ve established this candidate could possibly become one of your employees, make sure to check all references. Call all of their professional and personal references and verify information from the interview and application. Then ask for the contact information of another person who knows the applicant and call that person. That person may be surprised to hear from you, but you will get more honest answers.
“Most people listed as references have been prepped to some degree knowing they might get called, but when you call the second layer of people who know the potential employees you’ll get a more honest assessment,” said Schulz. “If you get glowing comments from this second layer of referrals then you’re on to a pretty decent person.”
Once the applicant has passed the reference check it’s time for the second interview.
“For me, the second interview is when I get into the specifics of the job, including what it takes both physically and mentally,” said Schulz. “Get them talking about their previous work experience and skills and how it might apply to this job. It’s important to remember that even if the applicant doesn’t have all the skills you require for the position, you can train a person who is trainable. Talk about problem solving and critical thinking so you can find out if he or she can think on their feet as well as independently. Also ask them why they think they would be the best candidate for the job. All of these questions will give you an idea of how close a match they are to the position.”
During the third interview, you will need to discuss benefits in details and go into salary negotiation.
“If your cap is $18 per hour and you want this employee to stay, then you will need to take this into consideration,” said Schulz. “You can start anywhere in your salary range that you want such as higher for more qualifications but I find it’s a good idea to let the applicant know there is a cap. Always, always, always do a pre-employment drug screening and a background check. If I am hiring a sales person or anyone who will be handling money, I also do a credit check. For some positions, it is also a good idea to do a motor vehicle background check.
NOW THAT YOU’VE GOT THEM, HOW DO YOU KEEP THEM?
The first step in getting off on the right foot with a newly hired employee is giving them an orientation and telling them everything they need to know for a successful start in your company. Give them the whole story of the company history and an employee handbook. Make sure to go over your expectations regarding customer service, quality and respect as well as company policies. It is a good idea to give several weeks of on-the-job training, including safety training from the ARA University online.
“We rely heavily on ARA’s University safety training to ingrain good safety habits in our new employees,” said Schulz. “As part of our orientation, especially with sales, we have new employees work with each department at least half a day so they can learn how different departments do things and how it affects each of the other positions in the business. It helps the new employee to see the bigger picture and how his or her job affects other jobs.”
Recently, Schulz and his team have implemented a mentorship program that assigns a mentor to each new employee. That mentor serves as another source to answer questions and help the new employee to “learn the ropes.” So far, Schulz says it seems to be making a difference.
“We just implemented this mentoring program not too long ago but it’s really taking hold,” said Schulz. “When we hire a new employee, we assign him or her a mentor from a cross department. For example, if I hire an outside dismantler then I might give him or her a mentor from Quality Care or someone in shipping. That way, the new employee has someone he or she can go to with questions about how the process is done as well as someone to connect to and help the transition into the business. Initially, I have them get together once a day, then less frequently, as the new employee gets used to things.”
The next key step in keeping your great employees is to engage in constant conversation with them. Schulz says he used to dread annual reviews but now he no longer conducts them. Instead he has opened up monthly (or more frequent) dialogue that serve as mini-reviews. He visits the employee’s workplace and discusses one or two topics each visit. He says he always finishes the discussion with a personal question and tries to learn more about the employee’s family and hobbies.
“I always make notes on what each employee is telling me which is particularly useful when we are trying to implement something new,” said Schulz. “Then we can begin to see trends and find out if this new proposed change will really work or not.”
Empower employees to do the things they excel at and enjoy, instead of bogging them down with things they are not really excited about. Same goes for owners – hire someone to do what you’re not good at.
“We have to be really careful that we don’t take really good employees who are exceptional at one thing and give them more responsibilities because they were so great at the one thing,” said Schulz. “When we do this, we often end up with an employee who is not great at anything but mediocre at all his or her responsibilities. For example, if you have an employee in a body shop that is a really good estimator and attracts customers because he is so good at that role, don’t give him other responsibilities, such as insurance information, just because he is so good at estimating. Let him excel at what he is good at, because then you’ll have an employee who is great at something and that spark will not die out under additional responsibilities.
Set realistic expectations regarding compensation. According to Schulz, you’ve got to know what each job is really worth and pre-set salary ranges for each position.
“It is an uncomfortable conversation for everyone involved but eventually you have to have the money conversation,” said Schulz. “Pay scales can certainly help in this situation. It is not to say that your people shouldn’t want to make more but they have to realize that they have to bring more to the table in order to make more. The days of longevity raises are long gone. If an employee is at the top of the pay scale already, they need to consider how they can grow within the company with either more responsibility or a different position.”
A Few More Recommendations
Schulz has worked hard to develop this hiring program and the payoff has been a solid staff of long-standing and reliable employees. Here are a few more of his tips:
• When it comes to incentives and sales commissions, you want to avoid the incentive pay trap. For some positions, such as delivery drivers, incentives work great. Make sure there is an incentive for picking up returns, too, and this will ensure great customer service on their part.
• If you want to remove the “you stole my sale” issues and improve customer service fast, take your sales people off commission. The quality of sale and the bickering between sales people goes away overnight and they become more of a team. I am certainly not saying that you completely stop tracking sales and all the other stuff that goes along with a sales team. You still need to make sure each of them is carrying their own weight. Not only does it take pressure off of them, we no longer need complicated formulas and reports just to pay our people.
• Provide an annual earnings statement for each employee. Include employer paid benefits, employer taxes, 401K matching funds, pro-rated employee outings or parties, and anything else employee related. We show our people what they are really getting by working for us. Most employees are amazed at what it actually costs to have them working for you. It can be an education for both you and the employee.
It takes time and deliberate effort to change the course and culture of your organization but the hiring process that Schulz and the team at AAA Auto Parts has implemented has paid off with great employees and a company culture that regularly attracts potential employees.
Michelle Keadle-Taylor is a freelance writer based in Northern Virginia.