Yesterday I spent my day training Charlie, our second part time warehouse employee. Like John, he picked everything up very quickly and by the end of the day was able to do 90% of the work without asking a question. And like with John, this is partly because he’s a very intelligent guy and partly because we did a good job of designing systems that set him up for success.

I think we’re now pretty confident that any hard working, smart person can be up and running at full speed in our warehouse in less than a week. That’s great for us to know. It gives us the flexibility to know that if we need to staff up for a busy few months (like the spring time or the holidays) we don’t need a month lead time to train someone. It’s also kind of a requirement for this type of position that will likely be filled by part-time students that need flexible schedules.

Now that we’re confident in the systems, the real problem is finding the right people. How do you go about finding the right employees?

How Most Businesses Hire

First, let’s take a look at how I think most organizations hire.

They have a HR department that’s isolated from the rest of the company. A manager who has an opening creates a job description and notifies HR of the open position. HR posts the job internally, either physically or on a company intranet, or both. People who check those postings regularly see the job open and apply if they think it’s something they’re interested in. The company might also offer a bonus for anyone who refers a new employee, so some people check the postings in hopes of getting some extra cash.

If anyone on the internal side applies, they are doing so for primarily their own benefit – either for the job itself or for the bonus. In most cases though, the HR department is also working hard to post the job in the newspaper, on Monster.com, on Craigslist, and maybe going to some job fairs.

HR collects resumes, the manager reviews them, invites a few in for interviews, and then hires someone based upon a few interviews, previous experience (as listed on the resume), and maybe the recommendations of some references picked by the applicant.

Not exactly my recipe for picking a good hire. It leaves a lot open to interpretation. What are you really trying to find out when you interview someone:

• Does the person work hard? You really have no idea.
• Does the person have the technical skills to do the job? Hopefully their job experience and education give you an idea, but without actually seeing them work you’ll never know.
• Does the person have the morals and ethics to fit into your company culture? References probably won’t tell the truth, plus your company is different than other companies anyway.

At best you barely answer those questions, but in most cases you’re probably still left guessing. And if that’s the case, why not try to hire differently?

How I Think Businesses Should Hire

I know this is a really, really simple idea, but I believe that following these two rules highly minimize the risks listed above:

1. Hire from within your network. This means that someone within your organization knows the person well enough to say that they will be a good fit.
2. Hire skill positions on a trial basis first. If someone is going to be a designer or programmer or web marketer, hire them first as a contractor to do a small project. Be clear that it’s a test and that if they do well they will get the permanent position.

Now let’s revisit those things we’re trying to find out when you interview someone.

• Does the person work hard? You’ve seen exactly how hard they work on a crucial project under stress.
• Does the person have the technical skills to do the job? If you’ve given them a good trial project and they have the proper education & experience, you should have a pretty good idea.
• Does the person have the morals and ethics to fit into your company culture? This is where you really rely on your current employee. If you make referrals important from the start and preach the idea that new hires are there to help everybody and make the team better, current employees should have a sense of pride when they refer someone. No one wants to refer someone that pulls the team down. They put their reputation on the line. There’s no reason to offer bonuses. In fact, bonuses change the focus from helping your team to helping your wallet.

Instead of a manager and HR rep working to find a hire, you enlist the entire team. Have a meeting and ask everyone on the team if they know anyone good for the job. If not, have them work their networks – close friends, family, send a message out to their networks on Facebook or LinkedIn. I’d think in most cases, particularly in our current economy, you’ll find someone this way. In theory, the more employees you have, the larger the network, so I have every reason to think that this process can scale. With some refinement it should work whether your organization is five or five thousand.

As always, there is a downside. When you work with people you know, there’s always an additional risk for the lines to be blurred between work and personal. Now, I honestly don’t think this is an issue if you follow the process and hire the best person for the job. People generally meet friends through school, work, and other friends. No sense in pretending that friendships and relationships don’t exist within every workforce.

Also, if you have a culture of being upfront and honest with everyone on your team, and everyone on your team treats everyone else with respect, you should never have an issue where there’s a nasty termination (short of theft…which is less likely if you’re hiring this way). This means that if someone leaves for a better opportunity, you have to be respectful of their decision. You have to make an extra effort to treat people well in all situations or this won’t work…which is how I expect myself and my partners to be anyway so for us this is a non issue.

Charlie has known both George and Greg all his life. They all grew up in the same neighborhood. When we were hiring for this position, we decided to tap within our network as opposed to throwing an ad on Craigslist. We skipped over the trial project because of the simplicity of the job, but if he ever becomes a full time employee and takes on harder tasks we’ll approach the transition by first giving him some small projects as a test.

I’m not sure who the next hire will be for us. Maybe a warehouse manager. Maybe a web marketer. Maybe a programmer. Maybe something else. Whomever it is, I think this approach will minimize the risk and give us the best chance for success.