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Human Capital Management: How to Hire the Right People
December 13, 2019

Human Capital Management: How to Hire the Right People

If you want your business to succeed, hiring the right people is crucial. Here’s why: hiring the wrong people can cost you time, money, and other resources. With the right employees, you can reduce hiring costs and increase productivity.

Unfortunately, however, hiring the right people is no easy feat. It can be overwhelming to read countless resumes and find the time to interview candidates. In addition, it’s easy to ignore red flags and rush the process in hopes of filling roles as quickly as possible.

As a hiring manager, there are certain strategies you need to use to recruit and retain top talent. Keep reading to learn about what they are and how you can improve your business’s talent acquisition. 

People Run Your Business, Period

Whether your business is based in food services, IT, healthcare, or any other industry, people are the lifeblood of your organization. Even if you have the best product, most beautiful office, and the latest technologies, if you don’t have the right people, you won’t succeed.

The right people are the ones who are dedicated to your organization. They’re willing to go above and beyond their job duties. They’re passionate about your mission. They’re out-of-the-box thinkers who bring innovation to the table.

With the right people behind your organization, you’re more likely to meet (or even exceed) your business goals. You can’t rely on a top-of-the-line product or cutting-edge machine to grow your business. It’s the people that’ll take your organization to new heights. 

The experience, knowledge, drive, and work-ethic of your employees are invaluable. Therefore, it’s important to take your human capital management (HCM) seriously.

So, what is human capital management? Good question! Essentially, it’s how you recruit, manage, and optimize the human resources of your organization. 

Without human capital management, it’ll be difficult to maximize the success of your organization. It’s important because it makes your people a priority and allows you to acquire and retain the right ones.

Tips To Ensure You Manage Your Human Capital

In a perfect world, the right candidates would knock on your organization’s door. You wouldn’t have to do much to find them. The reality, however, is that finding the right people requires proper human capital management. 

Talent management takes time, planning, and dedication. Unless you make it a priority, it can be difficult to hire the right people. This is particularly true when the job market is hot and job seekers have options.

If you’d like to make the right hiring decisions time after time, here are some tips to try out. 

Check References and Background Before Hiring

To start, it’s important to conduct a background check on all candidates. This holds true even if you were impressed by a candidate’s resume or they wow’d you during the interview. A background check can give you an idea of how a candidate behaved in the past. If you forgo a background check, you may hire a candidate who:

  • Damages your reputation through bad behavior or negligence.
  • Drives negligently and hurt pedestrians or property.
  • Participates in workplace bullying or violence.
  • Engages in criminal activities like sexual assault on premises.

A background can also help you weed out candidates who have lied to you. For example, a candidate may state that they’ve earned an MBA from Harvard and have 10 years of marketing experience. When their background check comes back, you may find out that this isn’t the case. 

In addition to a background check, be sure to check references. By doing so, you can gain insight about how a candidate performed at their previous jobs.

We suggest speaking to their former managers and colleagues so that you can get an accurate snapshot of their work ethic. Also, it helps you understand their strengths and weaknesses. Remember: past performance almost always indicates future results. 

Ask The Right Questions During Interviews

Not all interview questions are created equal. Since you have limited time during an interview, it’s important to ask the right ones. Here are a few of the interview questions we recommend:

  • What is one skill that makes you perfect for this position? With this question, you can find out if a candidate knows what it takes to succeed in the role that they’re interviewing for. If they mention an irrelevant skill, they probably don’t understand what the job entails.
  • What’s your biggest professional achievement to date? The answer to this question will tell you about a candidates’ strengths. It can also help you uncover what motivates them to excel.
  • If you had $100,000 to build your own business, what would you do? The goal of this question is to gauge a candidate’s business intelligence, market knowledge, and ambitions. It can inform you whether they’re self-directed and creative.
  • Have you ever made a professional mistake? If so, how did you handle it? There’s no such thing as the perfect employee. Everyone you hire will make a mistake at some point, so it can give you an idea of how this candidate will solve future problems.
  • Is there something you’d happily do every single day for the rest of your professional life? With this question, you can learn what keeps a candidate happy and engaged. You can use it to assess whether the position is a good fit for them.

Interview with woman

Treat Your Employees Well

Once you hire an employee, there’s no guarantee they’ll stay for a long time. It’s your responsibility to give them a reason to stay. Here are some ideas to help you create a positive work environment and retain top talent.

  • Implement casual dress days: If you require business casual or formal attire, a casual dress day is a great idea. This can be weekly or monthly and allow employees to dress down a bit.
  • Offer flexibility: Employees have lives outside of work. Therefore, they appreciate flexibility and don’t want to be forced to work 8 to 5. Allow them to set their own hours as long as they successfully complete their designated tasks.
  • Work from home: Depending on your business’s industry, you may offer work from home opportunities. Your employees can work from home once a week, once a month, or all the time.
  • Celebrate birthdays and holidays: You can hold special lunches or happy hours to celebrate employees’ birthdays or important holidays. This can add some fun to standard work days.
  • Give praise: Employees love to feel appreciated. Praise them when they deserve it! For example, you can mention them in a company newsletter, or write them a personal note thanking them for their hard work.
  • Don’t skimp on benefits: Benefits like a 401(k), health insurance, tuition reimbursement, and paid time off are essential.

Learn How To Resolve Disputes

Workplace disputes are bound to happen. While you can’t predict when they’ll arise, you can create a plan to resolve them. Take these steps to resolve disputes:

  • Embrace disputes: When disputes pop up, don’t ignore them. Doing so can make these things worse, so it’s important to handle them right away. 
  • Speak to those involved: Give every employee involved in the dispute the chance to speak their mind. You may want to speak to them privately first before bringing everyone together. Once everyone is together, each employee should explain how they feel about the situation.
  • Listen: It may seem obvious, but it’s imperative to listen to your employees. Rephrase and repeat back what they’re saying. This way, you can ensure that you understand them.
  • Look for agreement: Even if each employee has a different point of view, try to find points of agreement. Looking for agreement can ease some tension and emphasize a team culture. 
  • Offer guidance: Although it isn’t your job to take sides, it’s your job to offer guidance. Let your employees know how they should proceed and design an action plan that reduces future disputes. 

How To Avoid Micromanagement

A micromanager likes to know what every employee is doing at all times. When an employee is micromanaged, they experience a loss of control or trust. In addition, they often feel like they can’t confidently share their ideas. 

Unfortunately, micromanagement often leads to employee burnout and turnover. The good news is you can avoid micromanagement by following these tips:

  • Hire the right people: When you have the right people on your team, you’re less likely to micromanage them. You’ll be able to trust their work ethic and ability to do their jobs well.
  • Make your expectations clear: Rather than micromanaging your employees, let them know what you expect from them. Provide resources and tools when possible.
  • Provide feedback: Giving feedback and micromanaging aren’t the same thing. When you give feedback, you simply tell an employee how they did. When you micromanage, you have something to say about every aspect of their project. 
  • Ask employees for input: Find out how your employees want to be managed. Do they like the idea of weekly check-ins? Or, would they rather have monthly team meetings?
  • Use human capital management software: Human capital management systems can give you transparency into what’s going on. This may be just what you need to stop micromanaging. 

Human Capital Is Crucial

There’s no denying that investing in human capital is crucial. An effective human capital strategy is the key to increased employee satisfaction. It’s what will allow you to retain your employees and increase your ROI. 

By educating yourself on the tips outlined in this article, you can ensure you hire the right people and grow your organization.  

At Fora Financial, we strive to help small business owners succeed. We offer tips to help your business improve its human capital management. Sign up for our newsletter today!

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Frequently Asked Questions

What is human capital management?

Human capital management is how you recruit, manage, and optimize the human resources of your organization. Investing in it can lead to happier employees, reduced turnover, greater productivity, and a plethora of other benefits. 

Why are background checks important?

A background check is vital because it can flag previous criminal history that may hurt your workplace. It can also ensure safety and verify the claims made by your candidates.

How can I avoid micromanagement?

To avoid micromanagement, hire the right people. You should also make your expectations clear, provide feedback, ask for employee input, and invest in HR software.

What are some strategies to resolve workplace disputes?

First and foremost, address employee disputes right away. Speak to all employees involved and carefully listen to what they have to say. Then, look for points of agreement and offer valuable guidance.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].