Ken hired his friend David to be the first salesperson his company ever had. Ken was growing and he knew he needed someone dedicated to the sales process if he was going to grow consistently. We started the process correctly. We looked at his financials and he had sustained the profits for months that he needed to cover a good sales position.
“Good” is the important adjective here. Ken knew that selling wasn’t easy and he didn’t have a lot of time or experience himself to train. He needed someone who had done this before and would be able to sell independently.
This all made sense. Ken had a job description that was all about business development. He was telling his very close friend David about the job. Ken was excited that his business could afford an experienced sales person and was pretty animated when describing the opportunity.
David tracked with him, nodding his head up and down; further validating that Ken was doing the right thing. David told Ken he was being smart. Ken was feeling even more confident because he knew David was in sales, so he must know about this stuff.
David told Ken as much. He told him he was doing the right thing and that maybe he, David, would consider coming on board and helping Ken out. He believed in Ken and his business and David assured Ken that he could really help him grow. He needed a large salary to make the move, though.
Ken felt like the compensation we had discussed was very attractive, but David explained how he couldn’t come for a commission package. He had to take care of his family and had bills to pay, but he would make it up quickly for Ken, once he started selling the big jobs.
Before Ken could run an ad, he had his salesman. Ken thought this was the luckiest break. He hadn’t even considered David, but since this all came together in one conversation, it must be a God thing, right? After all, David said he was a great sales person. His current job wasn’t appreciating him the way that they should, so it would work out perfect for him to leave and go and work for Ken. They were friends and it would be a great fit.
Until it wasn’t anymore.
Until David didn’t sell anything for months and months.
Until Ken’s business started to suffer because expenses were much higher and sales were not coming in.
Until after a year without selling anything, Ken had to let David go.
Keeping An Employee Out of Guilt
Ken had waited for almost 6 months longer than the point at which he knew he had a problem. But it was his friend. David needed the job. He had several kids and one on the way.
Plus, every time Ken tried to talk to David about not selling anything, David had a way of turning it around and making Ken feel like it was his fault. During the last 6 months on the job, information began to surface that David had never really cold-called on accounts before. He also disclosed that his last job wasn’t working out because that company also didn’t have good leads for David to sell to.
In actuality, David never had the experience or success that he had led Ken to believe.
After a year had gone by without any sales from David, there was no way to spin the situation in a good way. Ken was at a crossroads. He was spending a $100,000 a year on a salesperson who hadn’t sold anything.
A Poor Hire Is a Lose-Lose Proposition
He figured at this point, David would surely understand.
Unfortunately, David really believed he didn’t sell anything at his past job or at Ken’s company, because of the company, not his own shortfall. He was more than upset about being let go, and Ken lost a friend as well as an under-performing employee.
All too often, as small business owners we make poor hiring decisions. This seems like a very specific situation, but it is indicative of many. Here are the obvious problems:
- Ken made the hiring decision before he had a resume or a real interview.
- Ken hired David because he trusted him as a friend when he said he could help him grow his company.
- Ken made the compensation decision based on the candidate’s desire, not the company’s needs.
- Ken did not have any accountability in the job because he didn’t want to make his friend mad.
- Ken had never hired a salesman before and didn’t interview anyone else, so he didn’t know if it was normal to take that long to sell anything.
- Ken felt bad for his friend, so he held on to him for many months past it becoming a financial hardship for his company.
This is a sad story. It is actually a lose-lose situation. This happens often when we do not have an objective process to make a hiring decision.
Create a Strong Hiring Process and Stick To It
Consider the following steps when making a hiring decision for your small business:
- Create a job description and compensation package that matches the market rate for the job and also what you can afford to pay in your company. You may have to use other benefits to be competitive when you are still small, like flexible hours, company discounts, etc.
- Take the time to advertise for the open position. It is common to wait until we are desperate for help, however, this puts us in a vulnerable position to hire the first warm body. It is important to take the time to let people in your network know you are hiring and to advertise on job boards if appropriate.
- If someone you know, or someone you know refers a candidate, make sure that they know they will go through the same process as every other candidate. Tell them upfront that they will be considered based upon their experience and knowledge of the job.
- Follow the process of comparing each candidate’s resume to the job and job description. This gives you an objective way to consider even people you know.
- Interview and hire the best candidate. If the person you know has all of the skills you need for the position and they are someone you trust, then hire them. But if they don’t have the skills, don’t hire them out of obligation. It won’t last and the rift in the relationship will be worse on the back end than just being upfront to begin with.
Many people hire friends and family to work alongside. It can be extremely rewarding if the skills match and the need is there.
But we have all heard stories of small business owners hiring a family member or a friend to fill a desperately needed open position or to help the family member out in a time of need. Usually these versions of working with family and friends do not have a happy ending.
Family, friend, or stranger, every candidate should pass through a strong hiring process. Remember, your team is one of the key factors to building a foundation for your business that you can grow on.