7 Hiring and Team Management Mistakes You're Likely Making
When running a small business, effective team management is not just a nicety; it's an absolute necessity. However, many small business owners find themselves making inadvertent mistakes that can lead to poor team morale, high turnover rates, and ultimately, a less productive business.
From neglecting employee recognition to inaccurate job descriptions, numerous pitfalls can be easily avoided. In this article, we'll explore seven of the most common team management mistakes, and provide insights on how to rectify them for a happier, more productive team.
Defining Employee Turnover
Employee turnover refers to the percentage rate at which your business loses and hires new employees. A high turnover rate can have numerous implications ranging from the cost of hiring to lowered company morale.
Understanding Employee Retention
Employee retention is the strategy employed by small businesses to encourage their employees to stay with the company for as long as possible. This can include salary and benefits packages, as well as a positive and engaging work environment.
1. Hiring Too Late
One of the most common mistakes, particularly in cost-sensitive small businesses, is hiring when it's already past urgent and into the realm of critical. When lack of manpower becomes a pivotal issue, businesses are more prone to make rushed decisions, often leading to employers settling for less suitable candidates or not hiring the additional help needed.
Why it's a Problem
Late hiring makes it difficult for current staff to meet their goals, which can lead to a drop in morale and team productivity. Additionally, the urgency forces you to lower your hiring standards, potentially bringing on board candidates that don’t fit the long-term needs of the company.
How to Fix It
Monitor workloads and project backlogs to identify patterns that suggest the need for more manpower. Develop a hiring plan that's ready to execute as soon as you see these patterns emerge. Having a pipeline of potential candidates can help you hire more efficiently when the time is right.
2. Rushing the Hiring Process
On the flip side, waiting for perfect candidates could mean you miss out on top-notch prospects. With precious time-to-market slipping away, it's tempting to hire the first acceptable resume that comes across your desk.
Why it's a Problem
A rushed hiring process often results in poor candidate selection and a higher turnover rate. Employees that are not the right fit for the role or company culture typically do not stick around.
How to Fix It
Define the role clearly before jumping into the recruitment phase. This might mean upsizing or downsizing the role based on current company needs and resources. Then, stick to a structured interview process that includes multiple steps and stakeholders to ensure that you’re making a reasonable and collective decision.
3: Not Paying Current Employees Enough
Competitive salaries are one way to attract the best talent, but they're also key in retaining your current, experienced employees. If you're leaning too far towards the frugal, you might soon find your top performers heading for the door which can be costly.
Why it's a Problem
Underpaid employees often feel undervalued and are more likely to leave for better-paying opportunities. This can lead to higher turnover rates and the loss of knowledge and skills that your business needs to succeed. One statistic showed that it cost 18% more to hire externally than internally and are 21% more likely to leave during their first year.
How to Fix It
Carry out regular market reviews to ensure you're up to date with what other employers are offering for similar jobs. Also, consider the caliber of your existing employees and the investment you've made in their training and skill development when assessing compensation.
4: Not Giving Employees Raises
Performance-based raises are a critical part of employee management. When financial growth for the company isn’t matched with individual financial growth for workers, it can cause discontent and make retention a difficult goal.
Why it's a Problem
Raises are a tangible way to acknowledge an employee's hard work and dedication, and not giving them can make employees feel undervalued. This can lead to disengagement, lack of motivation, and eventually high turnover rates. Raises are also important especially with the rising cost of living.
How to Fix It
Be transparent about the criteria for raises, whether it's reaching specific goals or demonstrating exceptional performance. Regularly review employee progress and provide timely feedback so that they know where they stand. Provide a raise annually to meet market demand and retain your employees.
5: Not Providing Opportunities for Growth
Professional Development and Career Pathways
Many employees today are looking for careers with opportunities forgrow within their roles or at the company. Providing opportunities for professional development and clear career pathways demonstrates a commitment to your team's success.
Strategies for Development
Offer training programs, tuition reimbursement, mentorships, and the chance to work on new projects. Provide opportunities to attend conferences, attend relevant meetings or workshops that would help them build skills. These can all be vehicles for career development within your organization.
6: Not Recognizing Employees’ Hard Work
The Importance of Recognition
A simple "thank you" can go a long way in making your employees feel valued. Recognition encourages continued hard work and boosts employee morale. Recognition not only shows appreciation for the employee’s efforts but it also sets a standard and provides a model of what good performance looks like and shows what the company values.
Creative Ways to Show Appreciation
Implement an employee of the month program, offer small rewards for meeting weekly goals, certificate or award, or celebrate work anniversaries. Recognition from a manger or especially a CEO are the two most important and memorable ways to recognize an employee. Monetary awards such as a trip, experience, extra PTO or gifts like a laptop, phone, etc. or pay increase are also favored. Find what works for your team to show appreciation for their efforts.
7: Micromanaging Your Team
Micromanagement refers to a management style characterized by excessive supervision and control of employees' work and processes. Key aspects of micromanagement include excessive focus on control. Micromanagers closely monitor their employees' activities, often to an unnecessary degree. This can involve constant check-ins, micromanaging tasks, and providing overly detailed instructions. Micromanagers are hesitant to delegate tasks and decision-making to their team members. They prefer to maintain tight control over everything, hindering employee autonomy and growth. Micromanagers often also fixate on minor details and processes, potentially overlooking the bigger picture and strategic goals.
The Pitfalls of Micromanagement
Micromanaging erodes trust and can lead to increased stress among employees. It also stifles innovation and can be a major drain on productivity.
Adopting a More Hands-Off Approach
Hire the right people and trust them to do their jobs. Clearly communicate expectations and provide the resources they need, then step back and allow them to perform. Make yourself approachable for help and advice when it is needed by your employees.
Have specific team or hiring questions?
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