Hiring is costly; hiring mistakes are costlier. Should entrepreneurs run trial periods with new employees and if so, how?
The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
Create Training Modules
I always make time to build a training module for the task I want a potential employee to complete before hiring. That way, if he doesn't work out, I already have materials in place to train the replacement. If you want a trial period, it can last for a few training modules as the employee proves his capabilities before gaining access to everything.
- Kelly Azevedo, She"s Got Systems
It all starts with the interview process, and ours is pretty thorough. Nevertheless, everyone starts off as an intern or part-time employee, and then we give them tasks with varying degrees of difficulty that test management skills, creativity and leadership. We can tell after 90 days if they fit our culture or not. If they do, we offer them full-time positions.
- Derek Capo, Next Step China
Date New Hires Before You Marry Them
Bring new people in on a contingent basis for myriad reasons, the most important being your cost-to-benefit ratio. Give a potential hire a specific deliverable and problem to work on, and have him do so in your office or around your team. Make hiring a team effort, and make sure that no one gets hired without the cultural approval of everyone, or the leaders you've anointed within the company.
- Derek Shanahan, Playerize
Institute Incentive Pay
In order to send clear signals about performance, give new employees base pay, but also incentive pay around key work competencies (e.g., being on time, quality of work). It will force a discussion around expectations on a regular basis, and those discussions will determine if they are right for your organization.
- Suzanne Smith, Social Impact Architects
There's no dipping your toe in the pool with hires. It sends a bad message. It is like being half-married. So make sure your up-front screening process looks for a brand fit and includes role-playing in the interview process; make sure you feel great about the hire. Then dive "all in" with the person, and assume he will be there for a long time. If he isn't, analyze where it went wrong.
- Raoul Davis, Ascendant Group
Offer High Commission Plans or Equity
We found lower base/higher variable commission plans cost less up front and weed out people who are not going to work as hard. When you are cash-strapped, consider offering people equity instead of a salary. If they can prove they can manage the job well, it will be worth it to pay them. If they prove not to be well-suited for the role, they will be gone before their shares vest.
- Ben Rubenstein, Yodle
Set Up a Hackathon
As a former VC, I observed that issues between team members posed the greatest risk for company failure. If we are hiring developers, the initial process is a two-week period of typical tasks, which is also a test to see if they are a "culture fit." The final part of this trial is a hackathon, a multi-day coding marathon, often with little sleep. It provides insights you would not get otherwise.
- Sharam Fouladgar-Mercer, AirPR
Assign Internal Projects
We frequently use trial periods for our positions. One efficient way to do so is by assigning an internal project. Assigning a project, rather than contracting for a set period, gives you more flexibility in terms of start and end dates if the candidate turn out to be a poor fit. It also eliminates the risk associated with the person being classified as an employee during the trial period.
- Chuck Cohn, Varsity Tutors
Institute a Probationary Period
I have made many hiring mistakes in the past. Always have a 90-day probationary period in which employees do not get vacation time or benefits. Review each new hire every 30 days, and you'll know if they're good fits when the probationary period is over.
- Ziver Birg, ZIVELO
Set Clear Benchmarks for Success
Trial periods are great because they allow both you and the employee to assess whether it's a good fit. Be sure to set clear expectations and goals for the trial period, and regularly meet to discuss progress; it's important to commit to being candid about what's working and what's not.
- Tracy Foster, ONA
Work for the Day
You don't need a full internship period to see if a potential hire is a good fit. A day provides enough time to make sure that person has the skills, work ethic, and personality to make it at your company. Sending potential hires through a Physical Challenge or Guantlet of Doom is optional.
- Jared Christopherson, Yellowhammer
Hire Short-Term First
I hire someone for a limited period of time, and I tell him if he accomplishes everything requested and the relationship works out, I may hire him for a long-term position. Instead of saying, "You're hired, but you're on probation," which puts a negative feeling into the process, it's much more positive.
- Benji Rabhan, MorrisCore
Learn a Lesson from Zappos
Zappos famously puts new recruits through training, and then offers the person $3,000 to walk away and quit. This means the people who stay are really committed to working for Zappos and diving into their roles at the company. I know most startup entrepreneurs don't have the cash to do this, but giving people an "out" or another incentive could have a similar outcome for your company.
- Natalie MacNeil, She Takes on the World
Hire Candidates as Interns First
We've found that first bringing a candidate on as an intern helps to see how they would work with our team full-time. It also gives us a chance to truly assess their skills -- especially when it comes to writing. Then, if they impress us and we're able to hire them at the end of the internship, we do.
- Heather Huhman, Come Recommended
Slow Down to Speed Up
We tend to avoid trial periods; often, you don't know it was a bad hire until a lot of training time has been invested. Focus on the right hires. It is easy to want to be fast-paced, but with hiring, it pays to take it slowly. For most positions, we run candidates through a gauntlet of interviews, test for skills/logic and, as a final step, we are 100 percent focused on cultural fit.
- Anderson Schoenrock, ScanDigital