Episode 114 Podcast Transcript

Speaker 1 (00:00):

The better you get at recruitment, you minimise the chances of incurring the cost of a bad hire. G’day everyone. Rob Kropp and Dan Stones here from Pravar Group, and welcome back to another episode of The Trade Den. Good to have you back, Dan. How are you?

Speaker 2 (00:19):

Very well, thank you, Rob. Good to be back. Getting into a bit of recruitment stuff today. Your old stomping ground, a bit of HR stuff.

Speaker 1 (00:26):

Yeah, love it. And it’s just a topic we can’t talk about enough when it comes to business, huh?

Speaker 2 (00:32):

It is, absolutely. And the reality is most trade business owners are bad at hiring, and it’s not meant to be an insult, but it is the reality, speaking from a lot of experience. But it’s not your fault because you were never taught to hire. No one showed you how to write a job at. No one said, “Here’s how you run an interview or onboard or train someone properly.” You learn the tools of your trade through years of training, experience. You become an apprentice. You go through all of that to get to a point where you know what you’re doing. But if you think about it, hiring staff and going through that whole recruitment process, you’re just expected to figure it out. And in fact, nearly everyone is. And usually when you do hire, it comes out of, like you said, at the top, out of pressure.

(01:14):

It’s not a planned thing, and it’s something that almost always goes wrong in those instances. And a bad hire doesn’t just cost the wage of the person for while they’re being ineffective. There’s so much more on the line at that point. And that’s why getting hiring right as a skill, it’s one of the most highest leveraged things you can do as a business owner, because if you can get the right team around you, hopefully we’ve convinced you through all these episodes so far that you’re going to be able to move forward. So what we want to do today is really break down where most business owners go wrong in the recruitment process, and then how to do things better the next time you come up against a recruitment challenge.

Speaker 1 (01:50):

This is such a sticking point for so many business owners because when a business owner is trying to get their business out of the ground, they hire their mates, they hire people close to them, they hire their friends. And so they don’t have to follow a rigid, structured, proven recruitment process. And they can kind of get away with it. But there gets a point in time when you want to get beyond two, three, four people in your ground crew. You’ve got to recruit people out there in the outside world, outside of your circles of friends and your network who are somewhat cold applicants. And this is when the problems and the cracks in a lot of business owners start to appear, isn’t it?

Speaker 2 (02:33):

It is. And I think this is what costs them so much in the long run. It compounds, not just in time, but the whole momentum of the business is so much revolves around how good your team is, how good your engine is in terms of how much you can put through it, the revs it can do. That’s your team. And if you’ve got the wrong team, you’re in trouble. And hiring, if you hire the wrong person in, they can blow that engine up really, really badly. So let’s go through three of the most common hiring mistakes we see. There’s so many more we could list as long as you are, but here’s the top three. The first one I want to dive into though with you is hiring on desperation, not preparation. It’s amazing how little preparation people put into it when really it’s not that hard to do once you understand what we mean by preparation for hiring.

Speaker 1 (03:18):

If you need someone today, it’s too late. If you need someone to be able to fill a hole in your team today, it’s way too late. And this is where so many tradies go wrong, is that they underestimate the time it takes to actually find someone to get them onboarded, trained, and hitting the ground running and productive. And so this is what we mean by if you’re hiring on desperation, it’s when you need someone today, you almost grab the first person that you could find just to fill a hole rather than finding the right person.

Speaker 2 (03:53):

Yeah. And we get it, right? The times when people leave unexpectedly, you lose someone, whatever it might be. And that does happen, but this preparation’s not just about, well, how could I have prepared for someone who walked out the door and I just lost them last week that I didn’t even know it was going to happen. So how could I prepare? But you said there, the process is not just about having a handshake, someone coming and picking up tools and starting work. There’s a process behind it. Hire, onboard, train. How do you do that? When do you do that? And have you got a process that sustains that whole thing is really important. So whilst you’ve got to avoid hiring out of desperation, the preparation phase is really, really important. When you get better at this skill, you start to get a process and a system that you can pull out and plug in when you need to, to give you the best chance of the right person joining the team.

Speaker 1 (04:40):

Correct. Well, we’ll talk about this later in the episode, but recruitment takes time. And when you follow the step-by-step process correctly to recruit, you minimise the chance of having a bad hire. That’s what happens. And that’s what we mean by preparation and process is that you increase your chances of setting them up for success. You increase your chances of finding the right person because the reality is recruitment is a bit of a gamble in the end of the day because you’re trying to find the best person, the applicants are trying to put their best foot forward. And it’s not really until you get someone in the business for an amount of time that you really, really show what that person’s capable of. But if you do it as a knee-jerk reaction because you need someone or you do it because you really need someone today, you often skip steps and what could be a red flag when you follow a process, you just kind of glaze over it because you’re doing it out of desperation today to be able to fill a hole or kick fire a job that you’ve probably known about for weeks and weeks anyway.

Speaker 2 (05:47):

You mentioned their time and it takes time. I think this is a big misconception people have. And in your experience, what would you say is the average timeframe when you look at a new hire or preparing for a new hire and you’re not hiring out of the fact that someone’s just walked off site that week, but you’ve got time to prepare. What sort of timeframe would you put against this whole process?

Speaker 1 (06:06):

Easily eight to 12 weeks. And that’s because you’ve got to get your Seek Ad live. You’ve got to allow a couple of weeks for that ad to run. And sometimes you can run an ad and get just shit that you’re just not even worth it. And sometimes when you’re in a hot labour market, Seek doesn’t even work. You’ve got to use more non-conventional methods around Facebook groups and community groups and head hunting and poaching and all those types of things. But let’s just talk traditional methods around recruitment, you’ve either got to run a Seek ad or run a Facebook or an Instagram ad, then you’ve got to be able to allow time people to apply. Then you’ve got a short list, interview, give them a chance. You’ve got to be able to make an offer. They’ve got to be able to give notice. Sometimes that could be two to four weeks.

(06:57):

It’s easily six to eight weeks easily before you get someone starting, and then you’ve got to be able to get them trained, onboard and up, running to be fully productive from there. So easy eight to 12 weeks to be able to really get the best bang from the recruitment process.

Speaker 2 (07:15):

Yeah, I would agree 100% on that one, even more. All right, next. This one, it almost comes from the preparation piece, but what we’re talking about next is going to be the idea of focusing or obsessing over one thing. And in this instance, let’s use it and say, well, hiring for technical skill and ignoring everything else that’s on the table. That too niche almost in terms of what you’re looking for.

Speaker 1 (07:39):

The reality is just because someone’s very good technically doesn’t mean that they’re a great cultural fit for your business. And to be honest, attitudes, behaviours, cultural fit, I believe is more important than technical capability because you can almost train technical capability over a period of time, but it’s very hard to train cultural fit, isn’t it?

Speaker 2 (08:06):

It is. And you get that thing where, and we hear clients say this all the time, “Yeah, got that guy and he’s not too bad, but the guys can’t talk to him on the team or there’s a team problem before you know it. ” And then the question comes in coaching, did you go through the process and did you sort of ask questions and follow what it was? And we’re going to go through a whole nother episode on process. So we’re not going to talk about that today, but just the idea of, did you actually go and look at some of this other stuff other than could he do the work that you had for that specific project? Not really. Well, there’s your problem because you did focus too much on that one thing. You need to look at the person and more often than not, it’s how they carry themselves and what they do.

(08:47):

So there’s a lot you can do in that space to eliminate that being something that trips you up in the long run because no matter how good they are at their job, if the rest of the team thinks they suck, they don’t want to work with them, they won’t go on site with them, you’re losing anyway. You’re not going to have that. That one person’s not going to be able to do everything and replace everyone. So it’s an important thing to get right.

Speaker 1 (09:06):

It is. And you can glean a lot from someone in the recruitment process around their behaviours, around what do they do outside of work. You can see what their interests are. You can see what’s their lifestyle like. You can go and look at their social media profiles to check them out, but it’s the little things in the application process was like, is their resume up to date? Were they on time for the interviews? How did they present themselves in the interview process? Are they neat and tidy and things like that? How was their communication style? So these are all the little things what we mean around cultural fit and behavioural fit versus just technical capability. These things are so important that you look for, and when you are desperate, it’s like you just gloss over that because it’s like, can this bloke do this job?

(09:54):

Yes, they can. Boom, let’s get them started. And you miss the red flags of all the behavioural things, and then a month down the line, you’re trying to performance manage them out or get rid of them in their probation period. And then it’s too late and that’s where it costs you twice. So that’s why we say that you’ve got to look for behavioural and cultural fit, not just technical capability.

Speaker 2 (10:18):

The next one, equally as important as all three of these, each of these is just so important. And the next one is skipping what we call skipping onboarding. People have a really bad habit, especially in trades of just going, “Here’s the tools, here’s the stuff, there’s the site, get on there. You’ll talk to Bob. He’ll walk you through the first week. I’ll come out and I’ll see you during the week at some point, but just get your ass to site, get started, you know what to do. ” And they leave it at that. And it’s like, why are you surprised when this goes pear shaped? Why are you surprised that they did something that didn’t gel with the way you wanted it done or the way we make decisions or the culture we’ve got around here or that’s not how we talk to clients in this business.

(10:58):

Those conversations always tend to happen on the back of not following this process of onboarding. Really important.

Speaker 1 (11:05):

It is. And we do a whole block of training in this, especially in their lifestyle programme. And we did it recently. And I know that we did a little client hot seat in this time. And Mitch Copp from Copper Electrical, he really showed all the lifestyle clients his onboarding process. And it was amazing. It’s like a full presentation. And obviously it’s taken in time in coaching to develop this, but it was like, this is who we are. This is how we do things around here. This is who our clients are. This is the type of work. This is how we show up. This is how our trucks are maintained. This is our uniforms. This is all the safety stuff. It’s like he invests a lot of time and energy and money in the early parts around week one, month one, quarter one around the onboarding of a new employee.

(11:54):

But what he’s doing is making a big investment upfront to set that, even the tradesmen, setting up the tradesmen and the apprentices up for success rather than going, as you said, here’s the keys, off you go start being billable, catch you later kind of thing.That’s just a recipe for disaster, isn’t it?

Speaker 2 (12:11):

It is. And there’s no better measure. I remember Mitch doing that and so many other clients that learn onboarding and do it properly. The measure of success, if you know you’re doing onboarding well, is after the first day that someone has in your organisation, within two days, they will send you a message going, “I can’t believe how good this is. That’s the best onboarding I’ve ever had.” We get that so often with clients that follow that process really well and they do onboarding well. It’s so appreciated and so beneficial to the person coming in. And sometimes it feels like you’re jumping through hoops. It’s like, this is so basic. Everyone should know this. Yeah. But where are they going to learn from? They’ve got to learn it from somewhere. They’re not mind readers. They’ve got to learn it from you or you’ve got to have someone that passes that through so that they can be onboarded in a way that they get to that point where it’s like, “I’m clear on what needs to happen. Let me get at it.”

Speaker 1 (12:59):

All performance behavioural issues down the line could be nipped in the butt from the onboarding process.

Speaker 2 (13:05):

Yep. Really can. And there’s so many things to teach in that area. It’s probably, as we do this now, I’m thinking it’s probably an episode on onboarding we could talk to in the podcast, but let’s keep moving. Let’s look at what a bad hire does actually cost, right? So those are the three areas that you can really hone in and make some giant steps. But what does it actually cost you when you do this? Because you might still be sitting there still thinking, “Well, I still need someone in the ground. I still need to have them there.” But if you get this wrong, you’ve got to really start to examine what’s the risk you’re taking on board by getting that wrong hire. And the first one is almost everything, the time cost. It’s huge.

Speaker 1 (13:43):

It takes time, like time for you to recruit, time for you to hire, time for you to onboard, time for you to train, time for you to manage that person, time for performance managing that person if they don’t work out. It’s hours and hours and hours of your time. And so you’re making a genuine investment of your time and their time as well for them to apply. Time is a big piece that it costs you and your time is precious. So you’ve got to make sure that you increase your chances of setting this process up for success by making sure that you’ve got the right process to follow in the end of the day.

Speaker 2 (14:22):

Yeah. The second one, the second big cost is the client cost, especially if you’re bringing someone in that’s client facing. You get this wrong, this is now where the cost is way more than just the person’s wage. This is now talking clients and accounts and future revenue for the business.

Speaker 1 (14:38):

It is. And you’ve got to think that if you, let’s say you’re hiring a leading hand and this leading hand, you’re dropping into leading a crew of guys and then you’re dropping them into work with one of your key builders and that key builder passes you half a dozen jobs worth 50 grand each. It’s like 300 grand of revenue with a couple of guys working underneath him. If that doesn’t work out and that one leading hand has a safety incident or a performance issue or the wrong way of communicating to that builder, that can piss that builder off and bang. Any excuse to go and get another contractor, they’ll take. And it doesn’t matter if you’ve had a good relationship with them. If that builder has a bad experience with your leading hand and your ground crew, it can undermine that relationship you’ve had for a lot of years and there’s a whole revenue source from that builder gone.

(15:30):

So it can cost a lot in reputation. It can cost a lot in loss of a key customer. The cost can be huge, not only from the employee not working out, but a whole revenue line gone in an instant because of issues down the line.

Speaker 2 (15:46):

Yeah. And it goes further than just that client. Think about, do they talk to other people in their industry? What are they going to say if it ever comes up, “Hey, have you ever heard of this business?” “Yeah, there’s shit. Don’t use them. I wouldn’t touch them. “That’s all it takes and now you’re out of the market You won’t win those jobs. So it is so important to consider that. And why we’re going on about this is because it’s worth the investment upfront to get this right in the hiring and recruitment process. The last one we want to talk about is team costs. We touched on this, but maybe talk about it, Rob, in terms of standards that people bring into the business and what it takes if one bad hire comes in and the impact on standards to the rest of the team.

Speaker 1 (16:25):

Yeah. They say in HR world that one bad Apple and the Apple cart upsets the whole Apple card. And it’s dangerous. You can bring someone into a pretty strong culture and that one person can whiten it from within. It can undermine the whole culture. It can deteriorate standards. And if that then person sticks within the business for a 3 or 6 or 12 month period and they’re a big personality, they can start turning the culture very, very quickly over time if you don’t catch it quick enough. So not only does it cost you because you’ve hired a bad person, it costs you time to have to rehire, you pissed off a key customer and you might lose another bloke in your team when you pump this other guy as well. So this is what we mean where it costs you twice. The recruitment mistakes don’t just happen on the recruitment side of things.

(17:18):

There’s the ongoing cost and the damage that you incur by having the wrong person, by recruiting and getting the wrong person on your team. So yeah, it can be really costly and undermined a lot of the strength of the culture that you’ve got and worked hard on building over a period of time.

Speaker 2 (17:35):

As we said, there’s probably so many things we can do and teach in future episodes that we’ve talked about to help close the loop. I want to focus on two today in terms of where we’re going. And the first one we want to get across, it’s more to the planning side, getting in front of this thing. Talk us through what we say in Pravar, the revenue to resourcing plan, what it is at a high level, how it works and how it can help the person listening.

Speaker 1 (17:59):

Yeah, this is a huge one. And this is really important where what you’re doing is it’s your ability to take a step back and design your ground career and match your revenue to resourcing for the trajectory of where the business is going forward. And what I mean by that is, is if your business is on an upward trajectory, it’s your ability to be able to forward, predict the revenue run rate due to the pipeline of work you’ve got in front of you. And then if you know that you’ve got a jump in your revenue run rate in three months time, then you don’t wait to get there. You’ve got to start hiring now. So a great example of this is Chris, who runs a decking business in the Shire in Sydney, he’s been in coaching a short amount of time, but we first really rejigged his team to really get the dynamics of two crews right.

(18:55):

That’s freed him up because he’s built his ground crew correctly and he’s starting to get admin source. And what he’s now doing is driving sales really hard. But what he’s recognising, he’s like, ” I need a third crew. I can see I need a third crew very, very quickly. “So instead of him waiting to get the third crew of carpenters when he needs them, he’s starting to pull the trigger on the recruitment process now. So he’s increasing his chances of getting the very best third decking crew when the work lands rather than hiring at a desperation as the work does land. So this is what we mean by planning through revenue to resourcing. It increases your success of hiring the very best people because you’re forward planning from a revenue and resourcing perspective.

Speaker 2 (19:45):

Yeah. Love it. It’s such a powerful investment of time just to put that plan together and have a look at what’s coming up. The next one, episodes will come from this, but I’m really keen to hear recruitment process. Everyone’s going to be thinking,” Well, what’s the process I should follow? “High level from you, what is that process in your mind when you say,” Right, well, at a bare minimum, and check this off as we say this as Rob goes through this, check this off in your own mind. Have you got these in place? Do you do this? “And we’re going to cover and fill these steps in as we go on the podcast, but just have a listen to the process and just see where you stand at the moment. It’d be really beneficial for you to hear that.

Speaker 1 (20:22):

The first step before you start recruitment, it’s got to be role and responsibility. So you’ve got to first think, what is the role and what is the responsibility? So even at the tradesman level, what’s the role of the tradesmen? What’s going to be their responsibility? What’s their behaviours? What’s their ticket? What’s their experience? What’s their attributes? What’s their skillset? Who are we really looking for in the dynamics of the team? Because if you get that right, that enables you then to go down the recruitment process because then you can write your CCAD or your Facebook or Instagram ad, which talks to that role and responsibility. We’re looking for this tradesman who is a residential construction plumber with this much experience and this ticket and that equipment ticket and they can drive this and operate this and blah, blah, blah, blah, blah. You can write the ad which reflects the roles and responsibility.

(21:24):

Then when you’re in the recruitment process, you’ve got to follow the right process around shortlisting interview, shortlist again, face-to-face. The big one, reference checks. You got to get reference checks done because that weeds out people. And even if you need to connect with people in your own circles to be able to go, “Hey, do you know this guy and what’s he like? ” Six degrees of separation, someone will know them along the way. So roles, responsibilities first, the recruitment process next, the reference checking after that, and then the training and onboarding following that. So that’s what we mean by a really robust process to follow. You’ve got to make sure you have all those checkboxes in place, because what you’re doing is increasing your chances of finding red flags and choosing the very best person that you can at the time with the people who’ve applied at the time.

Speaker 2 (22:15):

Nice. And as we said, we will cover these off through various episodes in terms of how to go about getting deeper into those processes. But if you know you’ve got gaps there, obviously I think without setting a challenge, it’s pretty obvious. Go and have a look at your own process. Where are those gaps? Do a bit of planning and just see what turns up for you in this space, because you’d be amazed at what you find when you really start to, like I said before, invest your time in a recruitment process and try to avoid having that double cost hit you.

Speaker 1 (22:45):

Yeah, it’s real. The real cost of a bad hire can be devastating, can’t it?

Speaker 2 (22:51):

Yeah. Even the real cost of hiring once is enough. If you really added it up for everyone, you’d probably eyes would water in terms of what that investment is. But to get it wrong and have to do it twice and all the knock on damage that happens that you spoke about, it really is a risk to the business.

Speaker 1 (23:09):

It is. And I know that I’ve done the amount of recruitment I’ve done. I’ve come from a HR world where I was doing bulk recruitment in the mining industry when we were at the height of the mining industry in Central Queensland in 2008, 2009 time period. But it’s so much recruitment. But I know in Pravar that I’ve recruited and I’ve got things wrong and you spend all that time and energy and focus going through the process, they don’t work out. Then all of a sudden I’m having to let clients know I’m back in the coach’s seat or whatever it is. It could be exhausting and that’s because sometimes you miss a red flag or you don’t want to see the red flag or whatever it is. The cost is real. I’ve been through it. I’m sure you listening, you’ve been through it, but the better you get at recruitment, you minimise the chances of incurring the cost of a bad hire.

(24:03):

What a great episode. If you’re in that situation where you’re tired of hire and hope cycle and you’re ready to build a team that you can actually rely on, then jump across to strategysession.com.au and book in a discovery call in a time that suits you. We’ll work out what your hiring process should look like and how to find and keep the right people as your business does grow because the right team doesn’t happen by accident. It happens when you build a process worthy of the people that you want to attract. What a great episode. Hopefully you’ve taken a lot from it. Looking forward to coming back to you soon with another episode here on The Trade Den. Until then, take care.

Speaker 2 (24:44):

See you soon.