Recruiting: You Must Fully Understand Your Situation

If you decide you should set a goal to save money, it will help tremendously if you know how much money you’d like to have saved and also how much money you currently have. 
 
If you want to lose weight, it would behoove you to have an idea of what your ideal weight would be and also how much you currently weigh. 
 
If you are in your car driving somewhere, it would make sense to know where the hell you are headed and where you currently are.
 
The same goes with your team capacity. You need to know where you’re at, but also what that capacity should look like to get both you and your business in a position to win. 
 
It sounds really easy. You had twelve people but lost two, so you need to add two more to get back to twelve, right? Not necessarily. Here are some questions to consider:
 

• When was the last time you had team turnover?

• What has changed with the labor market in your area?

• How confident are you that if you hire two you will be all set?

• What is the success rate when you hire someone new? (If you hired ten, how many do you think would make it a year?)

• Do you anticipate any more turnover? 

• Was the number of team members you had before (twelve in this scenario) the sweet spot for your business, or was that just what you were used to?

• What happens if you make too many offers and find yourself overstaffed?

• How do you build a bench of potential future hires?

• What do you need to get out of a team member to break even in the short term and make money long term?

 
This month we’ll look at the first three questions:
 
When was the last time you had team turnover?
 
If it has been a while, you need to realize that you shouldn’t assume anything. What you felt was important, or not important, for potential candidates may have changed. We have a new generation that we are now recruiting and employing. Millennials are old news. If you haven’t figured this out yet, you are falling behind fast because not only are millennials making up the majority of the workforce now but GenZ has arrived, ladies and gentlemen. Consider doing some research on generational differences, or better yet, go buy your niece or nephew a cup of coffee and get to know them. That cup of coffee being a pour-over with freshly ground single-origin, hand-roasted beans from Caldas, Colombia, of course. 
 
What has changed with the labor market in your area?
 
Unless you’ve been living under a rock, you know that a lot has changed. If it’s been a while since you had to hire, you may have a false sense of how easy that process is going to be for you. It’s also possible that it could be better than it was before. You need to have a grasp on what type of labor market you’re experiencing in your area. The first, and best, approach to acquiring this information is to take action with recruiting. You won’t know how cold the water is until you jump in.
 
 
How confident are you that if you hire two you’ll be all set?
 
Back in 2018, I was recruiting harder than ever as I was preparing to open a second insurance agency. I didn’t want to leave it to chance. I wanted to make sure when those doors opened we were staffed appropriately to put us in a position to win. I was shifting my office manager from my first location to run the second. We were starting with zero customers, so I didn’t need a customer service rep at that time. I focused solely on hiring a sales team. I knew that I’d need three new hires to accomplish the goals I had laid out in my business plan. 
 
Again, not wanting to leave it to chance, my default was to be aggressive with interviewing and hiring. I had nine offers extended. You may be thinking I must have hired anyone that was able to fog a mirror. This wasn’t the case. If you read Complacency Kills, you may remember the story where I found out how many times I had logged in to my applicant tracking system year-to-date through October. The number was over 1,400 times. I logged in to my account over 1,400 times in ten months while working to staff up for the launch of my second location.
 
And how’d it go with those nine that I offered?
 
Three were there on day one. A few couldn’t pass the state exam to sell insurance, a couple took other jobs, and one ghosted. 
 
And how’d it go with the three that made it through?
 
I fired one within the first month. The other two were amazing hires and are wildly successful to this day in the industry. 
 
I know it will differ from industry to industry, but I always say if you really need one, you should consider extending three offers. 
 
It’s kind of like retiring with a certain amount of money. Most financial gurus will tell you if you live off of 4 percent of your portfolio, you should never run out of money. I’m sure there are plenty of situations where you could live off of more. There are probably situations where pulling 4 percent may be problematic. It’s just a rule of thumb. 
 
Three-to-one is the ratio that I use for hiring, the rule of thumb that I use in the insurance industry. 
 
What’s a safe ratio for your business and your industry? Next month we’ll dive deeper into this question and discuss the next three questions listed above.