Managing Hidden Hiring Costs: A Practical Guide

Posted on July 8, 2024 by Bob Skidmore

If your business only hires a new employee once or twice a year, the list of costs associated with hiring, on-boarding, training and retaining good people might seem incidental. However, if you add a new associate once a month or week, or like one of my clients who is almost daily hiring in-home caregivers, then all these costly details add up quickly and you will need to have strong processes in place to identify and control them to enhance your bottom line.

1) Hidden hiring costs:

The additional expenses associated with new employees often begin well before their start date and should be recorded in a dedicated recruitment expense account, not as miscellaneous expenses. While hiring costs may appear obvious, there are less apparent administrative expenses intertwined with the process that necessitate careful monitoring. For instance, the proportion of time managers spend on recruitment should be allocated as hiring costs. Remember, you can’t manage what you don’t measure, so it’s crucial to track these expenses:

  1. Job specific advertising, on-line, in print or other
  2. Time reviewing and selecting resumes and applications
  3. Phone time spent screening those applicants
  4. Interviewing: In groups, first and second level individual interviews and perhaps a final interview by one of your executives.
  5. Aptitude, knowledge & skills testing including time and materials ($150-$500ea)
  6. Drug screening ($25-$250ea)
  7. Background checks ($30 – $80 ea. depending on how many jurisdictions you check)
  8. DMV check is a must for anyone driving on company business.
  9. Professional agency fees (25-30% of first year salary is common)

And these all take place before the new employee is officially hired. Many of these are unavoidable, but the goal is to minimize them when and where you can.

2) On-boarding; make a checklist and use it: 

This period is dedicated to acquainting the new employee with the company’s physical and cultural environment. Employers who neglect this stage may face the risk of new hires committing significant mistakes, unintentionally isolating themselves, or becoming quickly disillusioned and potentially resigning. Questions such as the location of departments, the supervisors available for interaction, the identity of their colleagues, the company’s telephone etiquette, parking arrangements, and the schedule for breaks and meals need to be addressed.

Additionally, it’s important to document the associated costs:

  1. General orientation meetings
  2. Development and printing employee handbooks
  3. W-4 and other HR forms
  4. Pension plans or 401k’s
  5. Benefits handbooks
  6. Employee uniforms
  7. Security badges
  8. Parking permits

3) Training Costs:

You may have heard of the company CFO who came to the president complaining about the high cost of training associates. “What if we train these people and they leave”? To which the president responded, “What if we don’t train them and they stay”?

Training associates can yield an extremely high return on investment; however, it requires time and a commitment of resources to elevate an employee from a “newbie” to a fully productive team member. Until they reach this point, they can inadvertently hinder productivity and potentially damage your reputation with customers and clients. The objective is to transition them swiftly from a cost center to a point where they are fully competent and informed. To achieve this, certain fundamental general (and job-specific) types of training may be necessary. Regardless of the subject matter or format, training incurs tangible costs. Examples include:

  1. Safety rules and regulations (Hazmat, etc.)
  2. Govt. Compliance issues
  3. IT systems orientation
  4. Sexual harassment training
  5. Indirect costs of equipment, facilities and supplies
  6.  Individual counseling, coaching, mentoring
  7. Cross training requiring added skills and knowledge

Cross-training is an excellent method of job enrichment, leading to greater employee empowerment and security, while also helping to mitigate the high costs associated with employee turnover. It can boost productivity, improve morale, and more. Additionally, it can cover gaps due to illnesses and vacations, showing employees that the company is invested in their career development. In essence, well-implemented cross-training programs are highly beneficial.

4) Retaining Costs:

“Cash money isn’t the only way workers are compensated, of course – health insurance, retirement-account contributions, education and transit subsidies and other benefits all can be part of the package. But wages and salaries are the biggest (about 70%, according to the Bureau of Labor Statistics) and most visible component of employee compensation”.  Drew Desilver, Pew Research Center.

Also quoted by the USBLS: 

Total Compensation costs for civilian workers increased 4.2 percent for the 12-month period ending in March 2024 and increased 4.8 percent in March 2023.  
Benefit costs increased 3.7 percent over the year and increased 4.5 percent for the 12-month period ending in March 2023.

Not every business can afford to offer a complete cafeteria of benefits.  However, those companies competing most effectively for talent are offering benefits like the ones listed below to attract today’s entitlement savvy candidates. Where do you stand with respect to the following:

  1. Major Medical Insurance
  2. Disability coverage
  3. Dental insurance
  4. Vision care
  5. Life insurance
  6. Tuition reimbursements
  7. Pension/Profit sharing plans
  8. 401k Plans
  9. Flexible spending accounts
  10. Employee discounts of company products or services
  11. Free transportation to and from work (see Google and Facebook)
  12.  Free company cafeteria open 24/7 (again, Google, etc.)
  13.  Child care services

According to Eric Koester of My High Tech Start-Up, “estimates range from 1.5x to 3x salary for the ‘fully baked’ cost of an employee – the cost including things like benefits, taxes, equipment, training, rent, etc.” Hiring a new employee isn’t a decision that should be taken lightly, as it doesn’t fall lightly on the company budget. But without workers, there isn’t much work done. And that’s the bottom line for businesses; even though the investment may make the company accountant cringe, the potential in return on a good new hire continues to make the investment worthwhile. 

Before you decide to add benefits, remember they are all added on top of the more mundane, but required government basics of:

  1. Social security tax of 6.2% on the first $160,200 in calendar gross earnings.
  2. Medicare tax of 1.45% on all calendar gross earnings (no maximum earnings)
  3. Federal unemployment tax (FUTA) of 6.0% on the first $7,000.00 in calendar gross earnings.
  4. Employers State Unemployment Tax (SUTA) varies by state, but amounts paid can be applied as credit to the FUTA tax payments.

In today’s economy, where automation is eliminating well-paying jobs at an unprecedented rate, it is crucial to make hiring decisions judiciously and to minimize turnover as much as possible. I trust this article has provided some insight and direction for your hiring procedures.

revised: July 2024

Robert Skidmore, President

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The 4 Phases Needed to Develop a Successful Business Plan

Posted on February 12, 2021 by Bob Skidmore

Develop a strategic plan that allows you to be intentional in your actions through introspection, idea generation, execution and ongoing evaluation, according to Channel Marketing Group’s David Gordon.

Back view of freelancer man sitting in front of wall with strategy and creating a plan.

AUTHOR: DAVID GORDON

JANUARY 5, 2021

As they say in the military, “The enemy has a say.” The key to winning is adjusting. In 2021, expect COVID-19 will continue to impact the first half of the year, while the second half could represent different opportunities. Further, a new presidential administration, with its new initiatives, could impact your market looking toward 2022 and 2023.

This is where business planning comes into play.

Planning is about understanding the landscape, knowing what you want to achieve and then determining how to achieve it. It requires gathering information to understand your environment; determining current deployment; resources; where you can solicit assistance and then determining what you need to do (or procure) to give your team the resources needed to achieve the goal. Then, it is all about execution – developing a plan to achieve your future goals.

The phases of developing a plan include:

1. Introspection, Research & Insights

2. Idea Generation

3. Aggregation & Execution

4. Ongoing Evaluation and Refinement

While it sounds comprehensive, and it can be, it can also be streamlined. It all depends upon your organization, style and, if you use an outside facilitator, their ability to ask the right questions, understand your business/industry and add ideas.

1. Introspection, Research & Insights

This first step is critical. It is about gathering information: quantitative information and qualitative insights.

This can comprise macroeconomic information, marketplace information, industry insights and data analysis. The goal is to have a sense of where the economy and market are going while understanding your strengths, weaknesses, opportunities, and threats (SWOT), which comes from information gathering.

Understand your relationship with your market, your company, your customers, and the potential of each. Data can deliver these insights. Internal business intelligence data, combined with external economic data, can be powerful tools.

Some additional areas to consider include:

Do you “plan” expecting today’s COVID-19 environment or a different one? For how long?

What is your expectation of the market? Future macro trends and the potential opportunities that they can create? For example, how will the new presidential administration’s likely focus on clean energy and the climate impact your markets?

How have your processes been impacted?

More importantly, how are customers and their customers being impacted? What are their new expectations? What is their outlook?

What is your staff’s input?

As part of this process, “customer” insights can be beneficial. This should be 360-degree input. From end-customers/contractors, distributors (if you are a manufacturer), salespeople (and reps/RSMs), perhaps even employees or suppliers. Ask their opinion about the market, their opportunities, how “you” can improve and more. Those who contribute want you to succeed.

Next, ask departments how they can improve. How can “you/they” be easier to do business with? What additional value can each bring to their customers? What processes need to be improved? How can utilization, and productivity, increase? What is their value proposition, and the company’s, today and what could it be?

If you are in sales, the issues are the same, but focus on their goals and account package. Where are customer needs? Where are they going? What is your value proposition, according to your sales organization? How can you generate more? What do you need to be successful (or, more importantly, what does your company need to do to be more successful with your customers/in your territory?)

Ask what is important for account retention as well as for taking share. Then prioritize.

It is about asking for information, seeking opportunities, developing ideas, changing models and anticipating the future, becoming knowledgeable. Going into 2021, many companies will be more conservative with investments and will seek to reallocate funding. Focus and enhancing models will be critical. Opportunities abound.

2. Idea Generation

Once you have gathered information and know the current and projected state, the next phase is identifying what strategies you want to continue. Conduct an idea generation exercise to determine what’s next.

This brainstorming exercise helps identify what new strategies will emerge. Consider what competitors are doing. Look at distributors/manufacturers in other industries or markets. Ask customers what would be of benefit to them.

3. Aggregation & Execution

Next it is about aggregating the ideas, developing a project plan and calendaring the activities to ensure time implementation.

For some initiatives, you may want advance time to present the strategy to your key suppliers or distributors to gather their input, or perhaps get their buy-in. For distributors, remember your 2021 earned co-op funds will probably decline, as they are based upon 2020 performance.

Gather the thoughts, determine the feasibility, gain budgetary insight and then prioritize. Inevitably, you cannot do everything. Every company is, at some point, resource-constrained.

4. Ongoing Evaluation and Refinement

An area that is challenging for most companies is ongoing evaluation of strategy with periodic reviews that allow the company to refine its strategy. It is like taking a road trip and finding out that there is construction on a segment of the highway. You can slow down or consider a detour/alternate route that enables you to continue. Adjustments are needed in plans. The key is achieving the end goal within the defined timeframe.

Reporting these metrics to various stakeholders also helps earn buy-in for future initiatives.

Next Steps

Strategic planning is a commitment to intentionally succeed. It is a leadership decision that reinforces to your staff that the company has a roadmap to achieve success and is committed to profitable growth. Involving your team helps develop a better “product” as well as earns their buy-in to the strategy, to implementation and to success.

Planning can be a process, or it can be a workshop. The key is, have a plan so you can be intentional in your actions.

David Gordon is president of Channel Marketing Group, a distribution strategy and marketing consulting firm helping distributors, manufacturers and representatives in the industrial and construction industries generate insights and ideas to drive growth. For more information on Channel Marketing Group, visit channelmkt.com. Reach Gordon at dgordon@channelmkt.com. 

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11 Things You Should Never Say When Firing an Employee

Posted on October 31, 2019 by Bob Skidmore
Jeff Haden

Contributing author

Jeff Haden is a writer, speaker, small business management expert, and Inc.’s most popular columnist. He’s the author of The Motivation Myth: How High Achievers Really Set Themselves Up to Win.

Let’s be frank: Firing people sucks.

I hated firing people. Even if an employee totally deserved it. Even if I should have fired them long before. It feels horrible, it’s difficult to tell the team, and in some cases, it will stick with you for a very long time.

Over twenty years later I still wonder if I did the right thing when I fired a particular employee; while his team felt he wasn’t pulling his weight, I wasn’t positive that was the problem. (And I’m still not.)

While letting someone go is hard on you, getting fired is way harder on your employee.

That’s why great business owners put their feelings aside and focus solely on treating their employees as humanely as possible.

Here are 11 things you should never say when firing an employee, along with what you should say instead.

1. “This is really hard for me.”

Yes, it is… but should your employee care? It may be hard for you, but it’s a lot harder for your employee.

And while you might think you’re softening the blow, consider your employee’s unstated but natural response: “Really? It’s hard for you? It can’t be that hard—you still have your job.”

If you feel bad when you fire someone, and you will, talk about your feelings later. With someone else.

2. “I’m not sure how to say this.”

Oh yes you are. You know what to say. You just don’t want to say it.

Don’t even imply that your employee should feel the discomfort you’re going through. Your job is to help your employee through an incredibly difficult moment. Not you. 

Cut to the chase as quickly as possible.

3. “We’ve decided to let you go.”

The word “we” works in nearly every setting—except here.

Use “I.”

“I have decided to let you go.”

At this moment, you are the business. So take responsibility for the conversation you’re having. 

4. “We’ve decided to go in a different direction.”

No, you decided to fire the person in front of you. You’re not an NFL team firing the head coach. And you’re not announcing their termination at a press conference.

If you’ve done your job correctly and created a performance improvement plan, your employee will already know why they’re being fired. So skip the clichés. State the reason as clearly and concisely as possible. Or just say,

“Joel, I have to let you go.”

Joel should already know why.Related

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5. “We’ll work out the details later.”

For your employee, getting fired is the end of their job and the start of another one: Picking up personal items, learning about COBRA insurance, returning your company’s property, and other hard but essential to-dos.

You need to know ahead of time how all that works. Or have the person who does know take care of those details as soon as your part of the conversation is done.

Put yourself in your employee’s shoes: Getting fired is bad enough. Sitting in limbo while someone figures out “next steps” is humiliating when you just want the experience to be over.

And don’t make your employee wait to talk to other people who are part of the firing process. Once you let someone go, your employee is on their time. So take care of the details during the conversation.

6. “Compared to Susan, your performance is subpar.”

Never compare the person you fire to another employee. Employees should be let go because they fail to meet objective standards, targets, and/or behavioral expectations.

Besides, drawing comparisons between employees makes it possible for what should be an objective decision—and a potential discussion about that decision—to veer into a conversation about the performance of other people. 

While another employee might in fact be more efficient than the person you need to let go, what really matters is whether your employee has met their performance standards.

Never muddy the waters by bringing another person into a discussion that should focus solely on your employee.

7. “I understand what you’re saying, but here’s where you’re wrong.”

Most people tend to not make a scene while getting fired, but occasionally someone will argue.

Don’t get sucked into a conversation where seemingly every mistake, every performance issue, every objective problem is open for heated debate.

What should you do instead? If your employee starts to argue, simply say,

“Joel, I’m happy to talk about this for as long as you need… but nothing we talk about will change my decision.” 

While that sentence might sound cold, it’s actually a more humane approach. Arguments—especially arguments your employee will inevitably lose—will make them feel even worse.

Be professional. Be empathetic. And don’t respond if your employee begins to vent.

Just listen. It’s the very least you can do—and the most you can do.

8. “You’ve done a great job here, but we have to reduce the team.”

If you’re downsizing, leave performance completely out of the discussion. Firing an employee is quite different than laying them off, so know what the difference is before you have the conversation.

But if you’re not downsizing and just hiding behind that excuse so the conversation is easier for you, then you’re not being honest—and you open your company up to potential issues if you eventually bring on someone new as a backfill.

Never play games to try to protect your employee’s feelings, or worse, to protect your own.

9. “I know you weren’t happy here, so this is actually a good thing.”

Whether or not your employee will someday be glad you let them go is not for you to judge. (A year later I realized getting fired was the best thing that could have happened to me, but at the time I thought the sky was falling.)

It’s impossible for your employee to find a silver lining in the fired cloud, at least at first. Plus, whether or not it’s a good thing is not for you to judge.

Let your employee find their own glimmers of possibility.Simple time tracking that syncs with payroll.Get Started 

10. “I need to escort you from the building immediately. Someone will gather your things.”

I worked for a company where the policy was to walk terminated employees out the building. I hated doing it. A fired employee is not a criminal. Nor do they deserve to take a walk of shame. Unless you have reason to believe your employee will cause an issue if they aren’t supervised while leaving, there’s no need to escort out every person that gets terminated.

Just set simple guardrails. Say something like,

“Joel, go ahead and gather your personal belongings. I’ll meet you back here in fifteen minutes.”

If Joel doesn’t come back in fifteen minutes, get him. He (most likely) will be ready to go.

11. “If I can help you out in anyway, just let me know.”

Granted, offering to help sounds nice. At least it sounded nice to me when I got fired.

But then I thought about it. How will you help me? Write a glowing letter of recommendation? You fired me; that’s not going to happen. Call your network and put in a good word for me? Ditto.

Of course, if you have to lay off a good employee because there isn’t enough work, you should do what you can to help them land another job. Contact your network, write a recommendation, and help connect them to other businesses. But otherwise…?

You should say,

“Call me if you have questions about your final paycheck, health benefits, or other details.” 

Leave it at that. Don’t offer to do things you don’t feel comfortable doing. You might feel better because of the gesture, but your employee definitely won’t.

Wrap things up by saying something like,

“I wish you all the best.” Shake hands and let them leave.

Then accept the fact that you’ll feel terrible, regardless of how much you think your employee deserved to be fired. There’s no way around it.

Feeling bad about playing a role in changing someone’s life for the worse (even for a short amount of time) is something that will never get easy.Tags:

Updated: August 7, 2019Jeff Haden Jeff Haden is a writer, speaker, small business management expert, and Inc.’s most popular columnist. He’s the author of The Motivation Myth: How High Achievers Really Set Themselves Up to Win. Read more

Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about Gusto’s HR services

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You’re probably answering these 5 common interview questions wrong

Posted on June 10, 2019 by Bob Skidmore

Some of the simplest interview questions are the trickiest.

By Judith Humphrey – 4 minute Read

No matter what sorts of jobs you applied for, you can expect certain interview questions to pop up again and again. But just because you’ve answered these questions before doesn’t mean you should skip the prep work. In fact, some of these super-common questions are the hardest ones to get right.

So get your pen out, and don’t even think about heading in for an interview until you’ve written out talking points for the following questions:

1. Can you tell me about yourself?

This question is often answered with a meandering narrative, instead of using the opportunity to present a clear, impactful story about yourself.

Such an open-ended question makes it easy to go on too long and fill in a lot of details about your education, previous jobs, like and dislikes, or interests. But no one wants to hear a dissertation on your life. It makes you sound unfocused and aimless.

Instead, think of one clear message you want to deliver about yourself, and then pitch that idea in your answer. For example, you might say “I’m a person who has performed well in a series of communications roles,” or “If there’s one thing that defines me it’s my passion for leading people.” And make sure the one idea you’re putting forward about yourself fits with what the interviewer is looking for in a candidate. Once you have the key descriptor, expand upon it. You’ll sound focused and career-savvy.

2. What interests you about this job?

This question is tricky because it’s easy to give an answer that has little to do with the job itself. For example, you may say you’ve applied for this job in retail because you’ve always wanted to be in fashion, or you are a designer and you want to be in advertising. Or perhaps you have a friend who told you about the job, so you’ve applied because your friend likes that company. Or you may be interested simply because you’re ready to move on from your current gig. These are all true answers, but they’re hardly inspiring.

Instead, use this answer to show you know what is expected, what the challenges of the job are, and why you believe your talents will allow you to achieve what is expected. Dig deep and explain why exactly you feel you can deliver in the role.

 3. What is your greatest weakness?

It’s tantalizing to come up with a deeply honest answer. After all, you’ve been asked for one, and we all have weaknesses. But if you’re not prepared with a better answer, you might reply, “My weakness is that I don’t respond well to tight deadlines,” or “I don’t like situations where the team is not working well together.” These may in fact be true, but such an answer is risky.

Don’t lie, but instead prepare to answer with a “weakness” that’s actually a strength. Say, “I am a perfectionist who is always striving for excellence, even when it means I push myself too hard on a project.” Or “I’m driven to make my team the best, most successful sales team. This means the people working for me need to have aspirational goals as well.”

These behaviors are ones that will be perceived as strengths, assuming they are what’s needed in the role you will be playing.

4. Why are you leaving your current job?

You’re probably answering these 5 common interview questions wrong[Photo: Kritchanut/iStock]

Here, again, there’s a wrong answer, and a right one.

The wrong answer is to share anything negative that might be propelling you out of your existing role. If you say you’re leaving your current job because you dislike your boss, or you don’t get along with your colleagues, you’ll be giving your interviewer a reason to dump you. And the same goes for answers that have even a tinge of negativity (“I find the commute is just too long,” or, “The job is too demanding, given my growing family.”) These may be true, but they won’t help.

Instead, paint a picture of yourself as an aspirational employee who has been fulfilled in your current role, but is ready to take the next step in building your career. Talk about your accomplishments, your game plan for moving to the next level in your career, and how the job you’re applying for will require the skills you have already developed.

It’s good, too, to express regret that you are leaving a great group of colleagues, or a boss who has inspired you, but say, “It’s time to make this next move.”

5. Where do you see yourself in 10 years?

This is another question that comes with a catch. If you say you’d like to be in the role of your interviewer–say, a VP or director–you will be in quicksand territory. Your interviewer may be offended that you are putting yourself in her shoes.

The answer is to simply express a 10-year goal, without attaching it to a specific individual. If you have a career goal in mind, you’ll be perceived as someone with a vision and drive. Just remember that in today’s marketplace, nothing is certain, so you’ll need to reflect that in your answer.

There’s enough stress in job interviews without making things more difficult by having to come up with answers to these common questions on the spot. So before you go into your next job interview, master these five answers. The better prepared you are, the more success you’ll have.

Thank you,
Judith Humphrey is founder of The Humphrey Group, a premier leadership communications firm headquartered in Toronto. She also recently established EQUOS Corp., a company focused on delivering emotional intelligence training to the fitness, medical, and business sectors
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Five Things Every Recruiter Needs to Know About First Impressions

Posted on December 14, 2018 by Bob Skidmore

 Gregory Lewis – December 2018

We all know you shouldn’t judge a book by its cover. And we all do it anyway.

For you, the impulse to make snap judgments may kick in the moment you lay your eyes on a new candidate. Within seconds, you’ve already made a series of lightning-fast judgments, both conscious and subconscious. She looks confident. He looks tired. She seems frazzled. He seems sharp. You immediately have a strong sense of how the interview will go.

The real question is: should you trust that first impression? Fortunately, there’s now a boatload of psychological research on first impressions — or “thin-slicing” as it’s known in psych circles. And it suggests that your first impressions are very likely to match your lasting impressions (as well as the impressions of others). But it also suggests that we temper those judgments, which are often expressions of our unconscious bias, to make decisions that are fairer and more productive.

There’s mountains of academic studies on the subject but who really wants to sift through all of it?

Me. I do. You don’t have to. I’ve already done it. You’re welcome. Keep reading. You’ve got questions, science has answers, so let’s get going.

1. First impressions can be freakishly similar to lasting impressions

Turns out that aphorism was wrong. By and large, first impressions are often accurate. End of blog post.

Just kidding. Let’s dive a little deeper into the science.

“Research has found that first impressions are surprisingly valid,” according to Nobel laureate and superstar psychologist Daniel Kahneman. “You can predict very quickly whether you like a person and if others will.”

One study found that after watching just the first 15 seconds of a job interview, an observer could accurately predict whether the candidate would get an offer. Another study confirmed that,yes, “a short excerpt of a job interview can be predictive of hireability.”Still another study demonstrated that “after viewing 12 seconds of silent interviewee behavior” interviewers made hiring decisions that were largely inline with decisions made after the entire interview.

What kind of first impressions convinced recruiters? Not so surprisingly, applicants who appeared attentive(rather than anxious), competent, confident, dominant, optimistic, and professional “were more likely to receive positive hiring recommendations.”

Another study — this time focusing on professors — found that students who watched 30 seconds of silent instruction and rated the teachers on 15 criteria came up with results shockingly similar to those of students who took a class with that teacher for an entire semester.

 So your first impression in most cases will line up with your lasting impression. But, as we’ll see, that’s not always good.  

2. First impressions can be shaped by bias

In the examples above, we see that first impressions are good predictors of how we’ll feel about someone in the future. But let’s be clear: whether we like someone is different from whether they’ll be good at their job. Yes, in certain roles like sales, likability is important. But the candidate who strikes you as ditzy might also be the best software developer on the planet.

 This is where bias can creep in. How someone looks can seriously alter your first impression, often unfairly. One dispiriting study found that moderately obese applicants — especially female applicants — were far less likely to be hired, even when taking qualifications into account.

 highly of taller candidates: every additional inch equates to about $800 extra in annual salary, such that someone standing 5’5” will earn $166,000 less than someone 6 feet tall over a 30-year career. A whole bunch of studies show that attractive people are more likely to be hired and offered higher starting salaries — even though they’re not any more capable than their less attractive peers.

 By recognizing your implicit biases,you may be able to scoop up some amazing undervalued candidates, Moneyball style.

3. Bad first impressions can trigger a negative feedback loop

As we’ve seen, you might have a bad first impression for an unfair reason. What’s worse, starting off on the wrong foot can cause you to tumble into a vicious cycle.

A study at Cornell University found that first impressions are often self-fulfilling prophecies: if you start with a positive impression, you’re likely to smile more and give off warmer nonverbal cues. The candidate will pick up on that and respond in kind. More dangerously,negative feelings also reinforce themselves. If you start with a bad impression, you’re more likely to act aloof, awkward, and uninterested, causing the candidate to do likewise.

So if you feel yourself forming a bad first impression, try your best not to show it. Give the candidate the benefit of the doubt, and try to act as if they’re actually making a good impression — your positive behavior can bring out the best in the candidate and may allow them to alter your initial impression.

4. Giving into first impressions can hurt your performance as a recruiter

Positive first impressions pose a danger, too — not to the candidate, but to you. When an applicant makes a good impression, you’re actually less likely to do your job well. Similar to the self-fulfilling prophecy mentioned in the study above, recruiters act differently when they like the candidate. According to one study, interviewers “followed up positive first impressions … by showing positive regard toward the applicant, ‘selling’ the company and giving job information, and gathering less information.”

Dazzled by the light, recruiters transform into sales reps, talking up the company more and asking questions less. Sure, as a recruiter, you’re both an investigator and a cheerleader —selling the company won’t hurt your performance, but getting less information will. Prioritizing sales over interrogation might be forgivable if first impressions perfectly predicted performance, but we know they don’t.

Don’t get dazzled. If you think the candidate is great, pick your jaw up off the floor, ask more questions, and evaluate them with a critical mind. Take a step back and make a more objective,less impassioned assessment.

5. The first impression you make matters a lot, too

You know the candidate is concerned about making a good impression — but first impressions are a two-way street,and the one you make might matter more. According to a recent study, 80% of candidates would take one job over another based on the personal connections formed during the interview process.

So what’s the last word on first impressions? Trust, but verify.

Your immediate impression is a good predictor for how you’ll feel about a person over time, but don’t let your(possibly biased) feelings cloud your professional judgment. Know your limitations, work to overcome them, and don’t forget to make a good first impression yourself.

Gregory Lewis –December 12, 2018

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Women 50+: Declare Your Independence and Start a Business

Posted on July 24, 2018 by Bob Skidmore

8 tips on how to become a successful entrepreneur in midlife

One of the best decisions I ever made was to declare my freedom from my full-time job as a columnist for a national newspaper and start my own business as a freelancer. That was my personal independence day, and I’ve never looked back. Since then, I’ve also become an author of numerous books, a frequent public speaker and an expert on jobs for people over 50.

So my question for women over 50 as the Fourth of July nears: Is it time for you to declare your independence and start a business?

For many women I have met and counseled, launching a business at midlife is often an inner pursuit to find meaning and to give back to society. That’s tremendously rewarding. What’s more, becoming an entrepreneur after 50 is not as risky as you may think (or needn’t be) and the psychic and financial payoffs can be well worth it. Plus, launching a business is one answer to both the gender pay gap and the lack of advancement many women feel in today’s workplace, as I wrote in this New York Times article.

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Kimberly Eddleston

After 50 can be a great time in life for women to launch. “Research shows that women’s confidence at work increases with age while at the same time, their family responsibilities — especially related to child bearing and rearing — decrease. This makes entrepreneurship over 50 a great idea and a possibility,” says Kimberly A. Eddleston, a professor of entrepreneurship and innovation at Northeastern University and a senior editor on the EIX Editorial Board of the Schulze School of Entrepreneurship at the University of St. Thomas in Minneapolis.

Another compelling reason to consider it: “With their greater work experience and confidence, such women are more likely to see opportunities for a new business — customers whose needs are not being filled and gaps in product categories,” Eddleston notes. “In turn, their work experience often gives them the networks to successfully launch a business at this career stage. They also often have the financial resources to support a new business.”

You don’t have to go it alone and needn’t be afraid to seek help, though.

“Many universities offer entrepreneurship assistance for alumni, several offer programs and workshops specifically geared towards women and there are many local organizations — often government-supported or nonprofit — whose goal is to help women start and manage their own businesses,” Eddleston says.

I suggest you tap into the site of the U.S. Small Business Administration (SBA), SBA.gov, as well as Score.org, a nonprofit that provides small business assistance. Both are top resources for local seminars and other types of help for newbies. The SBA’s Office of Women’s Business Ownership assists women entrepreneurs through programs coordinated by SBA district offices, including business training, advice on snagging federal contracts and tips on getting access to credit and capital. It oversees Women’s Business Centers (WBCs), a national network of over 100 educational centers.

“Do not assume that these organizations are only for high-growth businesses; many have programs for all types of businesses,” Eddleston says.

I agree with all of Eddleston’s suggestions and would like to offer eight more of my own:

  1. Be clear-eyed about your prospects. Don’t expect to make a substantial profit straightaway. Be content knowing that the reward, at least initially, will come from doing something you love, following a dream and being your own boss. I call this intangible income, and it’s tax-free.
  2. Take it slow. Your skill set and experience offer the basis to starting your venture, but it will take time to lay the groundwork for a successful launch. You’ll need to do your research to be assured there’s truly a demand for your prospective service or product in the marketplace. Consider, too, which new skills you might need in order to get your business up and running. To learn them, volunteer or moonlight, if possible. Also, ask other small business owners in your field how they got started and dealt with challenges.
  3. Don’t wreck your hobby. Be aware of the distinction between a hobby that’s a remedy to your frenzied working world and a pursuit that’s really something you can relish round-the-clock. I love horses, for example, but a business teaching horseback riding would be a recipe for disaster for me. Horses are my escape valve and that’s the way I like it.
  4. Consider hiring a career coach or a business consultant. https://skidbiz.com   Personally, I’ve found that an unbiased outsider can help keep me motivated and focused on the next steps to take to keep my business viable. This kind of advice and accountability can be invaluable when you’re planning and launching your business.
  5. Assemble a support team. Confiding in a spouse or partner, a mentor, a friend, a sibling or even your adult child can keep you balanced and help you steadily navigate the uncharted landscape of founding a business.
  6. Get a firm grip on your finances. Many first-time entrepreneurs overvalue their initial income and undervalue their startup costs. Do you have enough socked away to support a few years with lower income (or none at all) if you will plow net income back into the business to keep it growing?
  7. Be ready for obstacles. If you’ve laid the proper groundwork, you’ll get through the bumpy bits. Having your support team to lean on will help.
  8. Create the proper mindset. This is something Sanyin Siang, author of the excellent new book, The Launch Book, recently told me when I interviewed her for my Next Avenue blog. The best approach is to begin with a vision of where you want to go, tape a picture on your office wall of what it might look like or set it as your computer’s screensaver, and journal about your goals.

Get things stirring with small steps and before you know it, you’ll be able to jubilantly declare your independence.

By Kerry Hannon

Kerry Hannon has covered personal finance, retirement and careers for The New York Times, Forbes, Money, U.S. News & World Report and USA Today, among other publications. She is the author of a dozen books including Money Confidence: Really Smart Financial Moves for Newly Single Women,  Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy…and Pays the Bills, Getting the Job You Want After 50, Love Your Job: The New Rules for Career Happiness and What’s Next? Finding Your Passion and Your Dream Job in Your Forties, Fifties and Beyond. Her website is kerryhannon.com. Follow her on Twitter @kerryhannon.
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What’s Keeping You From Starting a Business in Retirement?

Posted on February 28, 2018 by Bob Skidmore

How-to-Overcome-Obstacles-for-Starting-a-Business_178372995

Credit: Getty Images

Part of the America’s Entrepreneurs Special Report

Retirement is a great time to start a business, when you no longer have the financial, family and time obligations you once did. But many people just can’t bring themselves to do it.

There are many things that may be stopping you from becoming an entrepreneur, but that doesn’t mean they should. Here are five commonly perceived obstacles and how to move past them so you can see your dream business come to life:

Obstacle 1: You Think a Business Must Be a Giant Endeavor

These days, starting a business doesn’t necessarily require you to buy a space, have a brick and mortar store, raise a ton of money or hire employees. When you remember that, suddenly you realize that even the person selling Tupperware is running a business of her own.

The  cost of starting up is especially lower than in the past if you plan to launch a website business. As David Deeds, the Schulze Professor of Entrepreneurship at the Schulze School of Entrepreneurship of the University of St. Thomas in Minneapolis told Next Avenue: “The cost of development for building a site and reaching audiences has come down dramatically. Go back 15 years and it was very expensive to build something and reach an audience.”

Starting a business may be a big cloud of gray to you right now, but when you tackle one thing at a time, you see that most tasks are manageable.

How to get past it: Remember that turning your hobby into a business may be as simple as starting to charge for your signature jam, getting your business name registered at the county office and creating a business bank account so things will be easier for you or your accountant at tax time.

You may not be the founder of the next Apple or Nike, but that doesn’t mean your business isn’t a business. When you remember this, the idea of a launch becomes less daunting.

Obstacle No. 2: You Lack Direction

So you have a great idea for a business. Now what? Without some sort of direction, you’ll be stuck in Park for the rest of your life. The best way to create direction is to write a business plan — but it doesn’t need to be formal just yet.

Instead, start actively working on the outlines of a business plan.

How to get past it: Once you know what you need, you can begin figuring out how to get it. So, answer the following questions to create a loose direction for your business:

  • What capital, if any, do you need to get started?
  • Where will you sell and market your service or products? Online? In a store? On a seller site like Etsy?
  • Do you need anyone to help your business get off the ground or is it more of a one-person gig?

Obstacle No. 3: Fear

The top fear, in a poll of 1,000 Americans, is personal failure. That includes financial loss, unemployment and being alone. For many people, fear is also a major roadblock to starting a business. Many entrepreneurs have to actively work toward getting over a variety of fears including fear of: failure; not being an expert; being considered crazy; not finding the necessary funding and more.

How to get past it: We’re often afraid of things we have yet to define. Starting a business may be a big cloud of gray to you right now, but when you tackle one thing at a time, you quickly see that most tasks are manageable and there’s little to be fearful of. To break through that cloud, ask yourself the following questions:

  • What am I truly afraid of? This is likely a number of things, so write them down in a list.
  • Why am I afraid of that? Be honest with yourself. It’s okay if the answer is, “I’ve never done this before.”
  • How can I make it less scary or daunting? Come up with solutions, as simple or juvenile as they may seem.

Once you know exactly what you’re afraid of, you may not be as fearful as you once were. When something has a “face,” it’s easier to overcome.

Obstacle No. 4: A Lack of Organization

A business is a complicated beast that requires you to hone a whole new set of skills to be successful. One of those skills is organization — being able to see every moving piece of your business, from finances to production.

How to get past it: Draw an organization chart, starting with a simple list of all the moving parts in your business. I have a small personal training business, so my list would include:

  • Managing myself and my clients
  • Tracking marketing efforts
  • Filing taxes quarterly (and on time)
  • Documenting income

With a written list, you can determine what needs to be handled when, and by whom. This simple organization exercise can go a long way in getting your business off the ground.

Obstacle No. 5: Not Knowing Enough About Running a Business

Many entrepreneurs run up against this problem quickly. They have an idea, but don’t know where to go next. Luckily, a few key resources will provide immense value to your business as you get started.

How to get past it: The following people and websites can help and can also direct you to other resources:

  • An accountant: This is the most important resource for managing finances, including taxes, income and payroll.
  • Entrepreneur.com: This site is bursting with expert tips and advice about starting a business. Search and you’ll likely find the answer to any entrepreneurial question.
  • SBA.gov: The Small Business Administration is your one- stop shop for finding grant opportunities, getting expert advice and downloading important business documents (for free).

Don’t let fear, your mindset or a lack of organization keep you from starting your business. Once you get past the hurdles, you’ll realize it was all worth it (and not so hard after all!).

By Jessica Thiefels

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Labor 2030: The Collision of Demographics, Automation and Inequality

Posted on February 11, 2018 by Bob Skidmore
  • February 07, 2018 Bain report

By Karen Harris, Austin Kimson, Andrew Schwedel 

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Executive summary

Demographics, automation and inequality have the potential to dramatically reshape our world in the 2020s and beyond. Our analysis shows that the collision of these forces could trigger economic disruption far greater than we have experienced over the past 60 years (see Figure 1). The aim of this report by Bain’s Macro Trends Group is to detail how the impact of aging populations, the adoption of new automation technologies and rising inequality will likely combine to give rise to new business risks and opportunities. These gathering forces already pose challenges for businesses and investors. In the next decade, they will combine to create an economic climate of increasing extremes but may also trigger a decade-plus investment boom.

In the US, a new wave of investment in automation could stimulate as much as $8 trillion in incremental investments and abruptly lift interest rates. By the end of the 2020s, automation may eliminate 20% to 25% of current jobs, hitting middle- to low-income workers the hardest. As investments peak and then decline—probably around the end of the 2020s to the start of the 2030s—anemic demand growth is likely to constrain economic expansion, and global interest rates may again test zero percent. Faced with market imbalances and growth-stifling levels of inequality, many societies may reset the government’s role in the marketplace.

RELATED INSIGHTS

Spatial EconomicsKaren Harris: Post-globalizationOrganizing for a Digital World

The analysis and business insights in this report can help leaders put these changes in context and consider the effects they will have on their companies, their industries and the global economy.

Chapter 1 explores the impact of aging populations and the end of plentiful labor. The baby boomer generation powered a long but temporary surge in labor force growth. Now this group is moving into retirement, and labor force growth is slowing. That, in turn, imperils growth.

Chapter 2 examines how automation may solve one problem by increasing productivity and powering growth but creates another by potentially eliminating millions of jobs and suppressing wages for many workers.

Chapter 3 looks at how rising inequality could threaten growth. Demographic shifts combined with the next phase of automation will increase income inequality from already high levels. Middle- and low-income families are likely to be hit hardest, putting downward pressure on consumer spending and growth.

Chapter 4 traces how developments are likely to unfold in the turbulent 2020s. Investment in new automation technologies should fuel a period of robust growth. When it tapers off—sometime around the end of the decade, based on our estimates—growth is likely to become severely demand constrained.

Chapter 5 considers the outlook if governments intervene more actively in the marketplace to address economic imbalances. Their options include tax, labor market and regulatory interventions. The manner and likelihood of such interventions will vary greatly from country to country.

Chapter 6 focuses on the practical business implications of these trends for leadership teams, including the need to adjust to a macro environment that veers between extremes.

We call the coming period of upheaval “the Great Transformation” and define it through 10 interlocking themes, including the changing ages and stages of life, the rise of platforms and post-globalization in geopolitics. Our research indicates that the depth and breadth of changes in the 2020s will set apart this transformation from many previous ones.

Read the complete study

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SWOT: Revisiting an old friend

Posted on July 28, 2015 by Bob Skidmore

Skidbiz SWOTIt’s and old familiar friend and most will concede the SWOT analysis is invaluable when making a big decision to purchase a new business or restart an existing one.  However, its great for making other strategic and tactical evaluations as well.  It’s a lot like taking corporate selfies.  Identifying strengths, weaknesses, opportunities and threats on various issues can be a perpetual practice as your company matures and the marketplace paradigms shift. It is one of the most basic and yet most valuable multitools available to the business professional and while everyone gives it the knowing nod it remains underutilized. So use it beyond just those big picture applications.

The versatility of the SWOT analysis is clearly revealed in a Google search of SWOT images. The hundreds of iterations crisscross from the basic and specific Starbucks versions to Novamind mind mapping (there will no attempt at covering that subject here). They are applied to lean management, sales force improvements, crisis management, competitive market analysis, revenue improvement and about any aspect of your business that can benefit from a closer look.

I’m a big fan of co-creating solutions with lots of other associates. The SWOT process is well suited as a template for this. Bring your people together and ask them to give you a rapid fire version of what they perceive as the standout strengths of the issue in question. Write the items down on a poster size sheet. Give each person a limited number of stickers or post-its to “vote” on their most important entries by pinning them next to their top picks and add up the scores.   Make a list, vote, repeat process for weaknesses, opportunities and threats. The result is a consensus of opinions that most can align with and a feeling they were part of the decision making process. Your ongoing conversations will now be driven by the results that everyone contributed to and buy-in is a beautiful thing.

The SWOT analysis can help marketing focus, sales growth planning, team building and calamity avoidance. It can certainly accelerate changes, and be an essential step in making those mid course corrections that can make a solid difference to your company. Its uses are only limited by your business imagination. Heck, you can do an abundance of things with it, just don’t file the concept in your desk drawer and forget it. The process stimulates conversation between associates and it costs so little to implement as an ongoing practice.  Good luck with your strategic planning.

Robert Skidmore, President

Skidmore Business Solutions

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Five Finer Points of Succession Planning

Posted on May 13, 2015 by Bob Skidmore
  1. From starting line-up to bench strength  Succession planning is the backbone of strategic human resources management. Its primary purpose is to provide information for the identification of candidates for replacement of managerial and other “key and critical” positions within the organization. It should serve as the basis for developing a human resources component to the strategic planning process. Thus, two immediate benefits of a well-thought out and executed succession plan are the building of bench strength through targeted allocation of development resources and creating buy-in from those employees so targeted. 
  2. Avoid the forgotten binder outcome   Succession planning should be an ongoing process, bringing top organization executives and Human Resources department leadership together to engage in a strategic dialogue. This is essential if the process is to be something more than a “fill out the forms” exercise. The more care that is taken in the succession plan’s development and use, the more efficiently the organization will be served over time. Conversely, without top management input, support and use of the succession plan, it will be nothing more than another binder occupying shelf space in the HR department. Accordingly, the plan should belong to the entire organization. It is as much about the process as the plan itself.
  3. Getting it from the horse’s mouth   In developing the plan, lots of information may be gathered from personnel records; but addressing the employees to directly provide information about their career objectives, and development needs promotes buy-in and better quality of information. You should ask employees to “self-identify” their strengths, weaknesses and next position targets, as well as to identify possible successors to the position they currently hold. Keep in mind, though, it is ultimately up to Human Resources to edit and approve any employee-provided data prior to discussion with top management.
  4. Assessing for future performance potential   An in-depth profile should be developed for each employee shown in the plan and should include a two or three sentence summary prepared by the employee’s organizational manager, describing the employee’s responsibilities, strengths and contributions. The employee should also be assessed for “performance” in their current position and “potential” for future career growth.  HR should provide rating managers with standard forms and definitions for accomplishing this, to promote a uniform dialogue among rating managers.
  5. Is there no next man/woman up?   It is important not to force employees into a successor position who do not objectively meet the requirements for success in the positions outlined in the plan. It is vital for the organization to know if there are no viable candidates for succession to a key position, to better understand the risks associated with attrition (planned or unplanned) and to be prepared with plans for external replacement if such better serves the organization’s strategic needs.

       Rod Hanks with Robert Skidmore

       Other helpful articles at Hot-BizKits

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