In my former life as a field manager and executive I would find myself working with plant locations that needed help. Maybe they were missing their sales and growth goals. Maybe they were missing their profit and quality objectives. Some were missing everything.

No two situations were exactly the same. But they all had two things in common… poor employee relationships and poor hiring and staffing decisions. When these combined, the locations were always characterized by high employee turnover. I learned very quickly that if we solved the hiring problems and improved employee relations, we nearly always cut employee turnover in half.

Cutting employee turnover has an immediate impact on operating costs. Expensive employee replacement costs are drastically reduced. Costly mistakes made by new employees nearly disappear. Lowering employee turnover allows managers to spend more time working with customers and coaching employees instead of recruiting and interviewing. Quality improves which reduces service costs and makes for very happy customers. What I didn’t know at the time, because of our accounting methods, was the impact that lower employee turnover was having on healthcare benefit costs and other operating problems related to health issues – like presenteeism and absenteeism.

Leaders have the responsibility to develop peak performing, “winning” teams. Whether we are running a small business or a department with a few employees – or a large operation with hundreds – the responsibility of developing people and improving performance is the same. Great leaders make good hiring and staffing decisions. They consistently select the right people for the right job.

Who we hire has more to do with the ultimate outcome of performance than anything else we do as leaders. More than anything else, our hiring practices and personal hiring skills impact our team’s success…or failure.

A poor hiring process increases employee turnover, which is death to any initiative to improve productivity. Bad hires don’t last – they leave or are asked to leave. Sometimes they leave when they realize they don’t like the job, the company, or the people. In these cases, the new hire “fires” the company. They’re asked to leave when they can’t learn, won’t learn, commit some violation, or demonstrate some character flaw. Then the company fires them. Under weak management non-performers linger on to become “deadwood”. In any case, they were miscast, and set up for failure from the beginning. Whose fault was that??

In most cases the company. The company may not have developed a hiring process – or the people using the process didn’t do their job. In the final analysis, a recent hire is out of work and going through the trauma and stress of job change, because of your mistake! Read the rest of this entry »