Hey, everyone. It’s Brian back again. I’m covering people systems today. More specifically, I’m covering the first phase of the people resource lifecycle in your business which is hiring.
I’m not just talking about full-time hires to your business. I talked a little bit about this last week. I want to touch on it again to make sure we have a common understanding to work from.
Four Types of Resources
There are four types of resources that you might higher into your business.
The first one would be what you would consider a long-term employee. I often refer to them as FTEs although they could be working part-time in your business. FTE is an acronym for full-time employee.
These are people that you bring in and you’re paying them either a salary or an hourly rate. You give them benefits like health insurance, and you have a long-term perspective on them working in your business and doing things for you for your team.
The second type is a contractor. This is somebody that is typically brought in for anywhere between a week to a year usually although there are exceptions to that.
A contractor is typically paid an hourly rate but they don’t get additional benefits. You’re not paying for their health insurance or anything extra. They often come through agencies so you’re working with a 3rd party to bring them into your business. That 3rd party is potentially doing management tasks related to the contractor’s pay and other activities.
The contractor is often working side-by-side with your long-term employees doing tasks similar to them but their pay is different and the long-term expectations are different.
The third type of resource is a freelancer. This is somebody that typically you get through an application like Fiverr, freelancer.com, Upwork or similar.
A freelancer is often brought in for a particular task and you bring them in just to do one thing in your business. They’re going to do that one thing and then they’re going to move on to other opportunities.
The fourth type is a vendor. Vendors are usually brought in to do niche work within your business. It might be installing a new application like a CRM application (Customer Relationship Management). It might be a project to revamp your accounting. You can hire a vendor that specializes in setting up accounting in businesses.
The individual resources working for the vendor are usually managed by the vendor and you work with a manager on the vendor side to make sure that the right work is getting done.
It’s important to understand these different types because they give you different options in how you bring resources into your business. They need to be treated differently as well.
In some states in the US, there are very specific laws about how you treat a contractor versus how you treat a long-term employee and you have to make sure that there’s some real distinction between those two. These laws dictate what you can and what you can’t do with those employees. You’ll need to ensure you understand the nuances that apply in your area.
Your business will need different systems in place to handle these different employee types as well.
Getting into Hiring
You first want to identify that it’s time to hire someone in your business. That starts with understanding the work you want a potential resource to do. You also want to identify how much time per week you need this resource. Is this repetitive work that happens week in and week out? Or is it a one-time task where you need somebody to come in and do this one thing?
Identifying answers to these questions will help you determine which type of resource it is you want to bring into your business.
If you say to yourself, “I’ve got this one-off activity. I need to have this one document edited. I don’t normally write documents but this one is important” then you’re going to most likely consider a freelancer because you don’t have repeating work for this person to do.
You don’t have ongoing work for them. You just need somebody for a week to come and do this thing, so you’ll most likely look for a freelancer to do that.
Also, understanding the type of work and how it relates to your business is very important. The thing to key in on there is answering the question, is the work that this person is going to do core to your business? Does it define what your business is or is it some ancillary work that just needs to be done because it’s part of the overhead of running a business?
If you are building software and you’ve got some proprietary algorithms that make your software work and you want to hire a software developer, this is very core to your business.
That is the differentiator. They are going to be doing work that differentiates your business from every other business out there. I lean very heavily towards committing long-term resources.
If you want to hire somebody to be a receptionist and answer phone calls and manage general inquiries into your business, that’s not core to what you do. So while you could decide for other reasons to use a long-term resource, you could also very easily leverage a contractor or a vendor to do that type of work for you.
Another thing you want to do is understand the nature of the work. What are the skills that are required to do the work that you want done? How many hours a week will it take someone to do this work?
Answering these questions helps you understand who to hire, but also as you get further along in this process of hiring, you’ve got to have those questions answered so that when you start having conversations with potential resources, you can tell them hey this is a part-time job 20 hours a week or this is a full-time job.
You must understand that the time that it takes as well as the nature of the skills that are required to do that work.
This is where documentation of existing systems can come in handy. It is very useful for helping you understand who to hire.
You can use documentation to understand the duration and nature of work happening. If you’ve already got process or system documentation, leverage it here to help speed along the process.
Existing documentation isn’t a must-have, so if you don’t have it, don’t worry.
If you don’t have documentation, or even if you do and want to get an updated or more scientific view of the work happening with your team, one tool to consider is the time study.
You can do a time study on an individual level or across a broader team. You can do it across your whole business as well, although depending on the size of your business, this might not make sense for hiring one person.
A time study is going to help you understand the real amount of time that people are spending today on different activities. You can use that to then make some very educated guesses and assumptions around what you would need a new hire to do. I wrote an article here on how to do a time study.
Filling the Role
At this point, you should have a profile of what type of resource you need, how long you need them, and what skills they should have. Now you’re going to get into the process of actually bringing this person into your business.
You can move on to actually trying to find the person that will fill the role for you.
The first step is to identify where the people are that fit this profile. You need to identify where do people like that exist.
If it’s a freelancer, you’re going to be going to the freelance sites. Pick whichever ones you use. You could use only one all the time. You might use multiple. That’s totally up to you and your preference.
There’s not one that I have a very strong opinion of that’s better than others use what’s worked for you in the past. If you’re not sure though start with Fiverr or Upwork and go from there.
You could use other resources like LinkedIn to find people. They could be part of some association or you might be looking at other job resource sites like indeed.com.
If you’re going through an agency for a contractor or a vendor, you must then identify who the agencies are that provide this type of resource or who are the vendors that do the kind of work you need to be done.
Once you’ve identified where those people are at, you have to do some sort of outreach or some sort of marketing to start to draw attention to the job that you have and get these candidates in front of you and your team.
This outreach is going to be different based on the resource type. If you’re looking for a freelancer, you’re going to your freelance website of choice and searching for the resources based on the work you need to be done (e.g. searching for a copywriter).
You’ll get presented with (potentially) many results and will then need to start screening and doing some research. Take a look at the gigs that they offer and look at the reviews that they’ve had from other people. They might have portfolios that you can look at so you can see samples of the work. It’s just a matter of going through and starting to do the research to figure out who are the people that are options.
If you’re working with an agency or you’re looking at hiring a long-term employee in your business, there’s a different process that you need to go through.
In most of these situations, you should have a written job description that you can post to places like LinkedIn, Indeed.com, Glassdoor.com, etc.
People will respond to that job description and you’ll have to start screening applicants to figure out who you like. Part of that screening should include interviews where you’re actually talking to these people and potentially meeting them face-to-face depending on what the job is.
You’ll want to define your own screening processes that apply to your industry and business.
If you’re looking to hire a vendor, it’s a different process for them as well. In hiring a vendor, you’re going to be actually talking to companies and trying to get a picture of what the company can provide in terms of resources.
You want to identify not only the resources and skillsets they have available at their company that you’d get access to, but you also want to understand how they typically engage with their Customers. This can look very different from one vendor to the next.
If you’re working with a vendor, they might have you sign documents or you might want them to sign documents such as an NDA (Non-Disclosure Agreement). You’ll most likely sign a master services agreement (MSA) and/or a statement of work (SOW). There are all kinds of contracts that get involved when dealing with vendors that you don’t have with the others so your process will naturally need to look slightly different for vendors.
Getting to “Hired”
For each resource type, the finish line for this phase of the people resource lifecycle looks a little bit different. After your research and selection process, there are some formalities to finish up to move on to the next phase.
For a freelancer, it’s usually about agreeing to the specifics of the gig in the application you found them on and then mutually accepting the gig.
For a contractor, you might have some light paperwork to sign with the agency. These usually cover things like bill rates and rules around converting a contractor to a long-term employee.
For a long-term employee, you’re usually sending out an offer letter with details on terms of employment. The employee typically signs the documents and returns the originals for safekeeping.
With a vendor, there’s usually some contract back and forth and one or more contracts get signed that cover the terms of your working arrangement between your company and theirs.
Once you get through the formalities, you’re now ready to bring the resource on board for day one! This will move them forward through the people resource lifecycle to the rewire stage, which will be our topic for next week.
We’ll talk through how you need to think about educating your new resource with the most important information they need to know to get them productive as soon as possible so that you and your team get better outcomes.
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.