Record high unemployment not only affects those who have lost their jobs, but it presents some new challenges for entrepreneurs and small businesses looking for reliable human resources. This past year I learned a few lessons on this subject. Hopefully, this insight can prevent you from experiencing similar situations.
The Internet offers a vast pool of talent when you are looking for permanent or contract help. From LinkedIn to Twitter, you can have access to thousands of people within minutes. You post your needs, the assignment description, and in no time, you can connect with someone selling you his or her qualifications. If he or she is not sharing all the facts for you to know, this person is not the one.
As an entrepreneur, we don’t always have the luxury of time or an HR department to conduct deep background checks, so we make quick decisions. How does this translate into ugly twists with sour results?
Here are my stories and what I will do next time.
1.) Make time to test contract talent and employees. More people than ever are strapped for cash and swim in debt; some are desperate for a job. Many will oversell you. I experienced this scenario, and don’t be fooled by three degrees either. I honestly believe there are many smart folks who have earned multitudes of degrees, and there are equally as many who are not prepared to contribute to an entrepreneurial enterprise and have so many degrees because they are putting off getting anything done. Give them assignments in a controlled placed with a defined time frame.
2.) Ask them if they are a full-fledged business service provider or if they are just picking up projects until they find a full-time gig. This situation has cost me money and time. I clearly posted a contract assignment on LinkedIn and received many résumés from qualified applicants. I narrowed it down to a couple of people. At that point, I started investing serious time in educating the candidates with details on the project, signed NDAs, and exchanged lots of documents. After a week, I got a call from one of the candidates who informed me: "I have been offered a job and sorry but can’t help you on your project." You mean the one we spent 40 hours on?
3.) Don't prepay until you are 190 percent convinced they are a superstar and reliable. I engaged a social media person to help me with building traffic. We signed a contract detailing the project, and I paid him upfront for a portion of the project. A month ago, he told me he landed a full-time job and is swamped. He can’t do the work, and he also will not return the money I advanced him. Now he does not even return my phone calls or e-mails.
4.) Clearly provide paperwork to talent stating their contract status and that you are not a past or present employer. I was not dinged on this one, but I did have to waste an hour and send a registered letter to a state unemployment office. I hired a contract PR person, had her sign a 1099, and provided her a purchase order, all clearly communicating she was employed on a contract basis. Apparently, she was collecting unemployment and as she was updating her case, she gave my company name to the state of New York as a part-time job provider, and they attempted to suck me for confirmation and likely an unemployment contribution. This would have notched up the tax rate I pay for for me and my other employees.
Finding the right people is already a tough task when you are a small business. Be extra aware and cautious in these recession-recovery times, because unemployment is a real factor in the human pool of talent.