Hiring and Managing People in your Business

People management is a really broad category, so even if you’re a solo entrepreneur today pay attention for the next few weeks. You’re going to learn things that you can use even if all you’re doing is hiring a freelancer on Fiverr or Upwork now and then.

Even if you don’t have big teams today in your business, you’ll find something that can help you as you start to engage freelancers. At some point, I’m sure you expect to grow your business to a point where you do have employees and this will help you get ready for that.

Let’s first talk about the way to think about categories or types of employees in your business. There are a few core types that you should understand. It’s important to understand this because you’re going to have different needs for each employee type.

You’ll need different systems for different types of employees because they require different things.

Long Term Employees

The first type of employee is the traditional full-time or part-time long-term employee. This is somebody that works for your business with the intent of having them around long term. You pay their taxes for them. They often have benefits associated with their compensation like insurance, 401(k)s, stock options, and more.

Many people use the term employee to be synonymous with a long-term employee. You might also hear the term FTE (Full Time Employee). These are the people that work for your business. You expect a long-term relationship with them.

Contractors

The second type of employee is a contractor. The contractor is typically hired through an agency and will be brought in for a period of a couple of weeks to a year or more, depending on what local laws you have.

A contractor is different from a long-term employee in that a contractor usually is just paid an hourly rate. It’s oftentimes higher than you would pay a long-term employee but a contractor is not going to receive any of those additional benefits.

They don’t get insurance, stock, vacation, or any of the other benefits that you would give a long-term employee.

Freelancers

The third type of people resource you want to think about for your business is the freelancer. This is somebody that you find typically through an application like Fiverr or Upwork. This is usually somebody that comes in and works on a very specific task or project for you. You usually pay them a fixed amount through the application that you found them in.

Even though they all might be working alongside each other the way you think about your freelancers needs to be different than the way you think about your contractors or your long-term employees.

Vendors

The fourth classification of people resources is a vendor. A vendor is somebody that you go out and engage to do specific work in your business. The relationship that you have with the vendor and the vendor’s employees that are doing the work is oftentimes very different than the relationship you would have with either a long-term employee, contractor, or freelancer.

Usually, vendor resources are managed by the vendor and you’ve got some kind of link between your business and that vendor. There is an identified contact on the vendor side that helps manage the work and make sure the vendor’s resources are on track.

To summarize, the four main types of employees to consider are –

• Long-term employee
• Contractor
• Freelancer
• Vendor

Lifecycles

Before I get into the actual people management side of this, I want to talk a little bit about lifecycles. Lifecycles exist in your business today. You might have many different lifecycles depending on what you do, what your industry is, how your organization is set up, the products that you sell, and other factors. All of these variables contribute to the number and types of lifecycles that exist in your business.

A lifecycle has a start and a finish or a beginning and an end. If you look at any lifecycle, it will start somewhere and end somewhere. A lifecycle represents a journey of sorts and could involve more than one system in your business.

Lifecycles are important to understand because a lifecycle is another way to think about the work that you do. It’s another way to help ensure that you’re doing the right things at the right times. Looking at a lifecycle will allow you to see problems in a different light and find problems that you wouldn’t otherwise find.

One example of a lifecycle that exists in every business is a product lifecycle. If you do any learning in product management, one of the first things you’ll learn is the concept of a product lifecycle.

A product lifecycle has a starting point where somebody has an idea for a new product and then that idea grows into a functional demo or prototype. From there it continues to grow until it’s an actual product that you can sell. That product has some period where it is sold by your business. At some point for many possible reasons, you decide to not sell that product anymore. You might release a new version or you decide that it’s not working well and you don’t want to sell it anymore.

At the point the product is no longer something your business sells, you need to manage that lifecycle from start to finish. This means managing the product to “end of life” closing out distribution and support of the product among other things.

People Resources Lifecycle

People management also has a lifecycle in your business. At some point, you identify that you need a person which is really where the lifecycle begins.

You need to find the resource that’s going to fit your needs. You have to bring that person on board. You have to manage that person. At some point, that person is going to leave your business. It might be 20 years down the road but for any employee that you bring into your business, you should assume they won’t work for you at some point in the future.

So when you think about lifecycles and people, that’s what the lifecycle looks like. Having an understanding of lifecycles is going to help you think through start to finish what your business needs to manage people.

I break managing people resources into four distinct phases each with its own systems.

• Hire
• Rewire
• Inspire
• Retire

These four words cover many different scenarios and processes that you need to think about as a business owner. Let’s take them one at a time.

The Four Phases

Hire starts when you identify that you have a need in your business and ends when you have someone start. There are steps in between that cover identifying the type of resource you want to hire and what the resource will do. You’ve also got to screen potential candidates, make a decision, and make an offer.

The next phase is rewire. So now that you have this person on board, you’ve got to think about all of the things you need to teach your new resource. They don’t know your company culture. They don’t know how you work day to day. They don’t know how other people that you have in your business work. They might be learning things about your industry or the specifics about how you differentiate within your industry.

There is a lot of information that a new employee is going to need to know and you need to be able to educate them on all of it. So all of the systems related to getting a new person started and getting them productive fall into the category of rewire.

The next phase is inspire. Inspire has two halves to it. First off, you need to inspire the people that are working for you. You need to make sure that they’re motivated, that they come in each day and do the work that they’re responsible for. You need to make sure they’re satisfied in the job that they have.

The second half relates to large organizations. If you’ve got managers that you’re managing or managers within your business, you must do additional work to keep those managers inspired and give them the tools so that they can inspire the people that they’re responsible for managing. The way you do that is different than how you manage an individual contributor and keep them motivated and inspired to do work.

So those are the two halves. There’s inspiring the individual and then there’s training and teaching the managers and leaders in your organization how to inspire others.

The last category is retire. This is a broad category that includes any reason that somebody might quit working for your business, not just actual retirement. It will also include voluntary departures when people take other jobs. It includes projects (contracts) ending where contractors depart your organization. It also includes situations where you need to remove a poor performing resource that is unable to make corrections.

You need to have systems in place to help you manage those departures no matter what the actual reason.

This is the introduction to people management and how I think about it, and in the next four weeks I’m going to cover each one of these topics individually. So next week we’ll talk about hiring and all of the different components to hiring and all of the different systems you need to be thinking about for your business.

The week after that I’ll do rewire and so on over the next four weeks until we’ve covered each of these four topics individually.

I do want to throw out if you’ve got any questions or concerns in your business today when it comes to hiring or managing people, go ahead and shoot me an email now and I will work in the answers to your questions into the content that’s coming over the next four weeks.

If you’re looking for extra guidance on how to apply this or other tools in your business, you can book a 15 minute call with me for $95 here.

If you have a bigger need, please email me and we can discuss how I can best help you Optimize for Outcomes.

Brian