3 Tips for Hiring the Right People—and 2 Traps To Avoid

One of the most costly mistakes for small business owners is making a bad hiring decision. Losing the money spent on recruiting, the time to interview the candidates, and the time and cost spent on employee training are a few of the major profit-squeezers that result from hiring mistakes.

Some entrepreneurs attempt to reduce risk by hiring family or friends-which in most cases proves to be the worst hiring mistake of all. It is difficult for most people to accept the relationship transition from family member to employee. Most often, those friendships will end in resentment and disappointment. When a veteran small business owner tells you, "Never hire family!" you can bet he's learned the hard way.

With a little skill and guidance, small business owners can learn much about potential candidates by understanding resumes. When reading resumes, there are three great things to look for-and two traps to watch out for.

When reading a resume, the three things to look for are:

1. Industry experience

You'll make shortcuts in new employee training if your new hire has previous experience in your industry. You will see a faster return on investment with your new employee when he or she already understands what your customers want. Prior industry experience also means he or she may have a business following that will result in added revenue for your business.

2. Transferable skills

Very often transferable skills are as critical as industry experience. Skills such as customer service, problem solving, sales and/or crisis management are valuable in almost every industry. Before interviewing candidates, make sure you understand the five most important transferable skills needed for the position you are hiring. Keep those skills in mind when reviewing resumes. Candidates whose resumes showcase those skills should be considered whether they have industry experience or not. An industry can be learned, but great customer service or superb selling skills can only be acquired with time and experience.

3. Accomplishments

When reading through resumes, look for applicants who write about their accomplishments. These are candidates who understand the bottom-line initiatives of an organization. A resume that mentions saving time, cutting costs, and solving customer disputes represents someone who can handle your problems as well.

On the flip side, when reading resumes watch out for these two traps:

1. Unstable work history

Pay attention to the dates on a resume. While the life expectancy of a job isn't what it was a generation ago, a string of short-term positions should be a concern. Candidates with too many jobs in too short of a time usually have excuses for all of them-sometimes even great excuses. But good excuses aren't the same thing as good reasons. If you see a consistent pattern of instability, beware! This may be a candidate who (1) doesn't get along with authority; (2) loses interest in his job after time; or (3) is just plain inept. Beware also of unexplained gaps in employment, which may indicate even more serious problems.

2. Unfocused career path

While it's quite normal for one's career path to shift, candidates whose resumes show opposing career directions may indicate uncertainty about their career path. Look out for candidates who have held contrasting positions like "sales" and "accounting," or "account manager" and "librarian." This may be a candidate who doesn't know what he wants in his career. After working for you as customer service rep, he may decide he really wants to be a dog groomer!

With practice you'll gain expertise at reading between the lines of a resume. Remember the three great things to look for and the two traps to avoid, and you'll save yourself valuable time, money and effort in hiring new employees.