Does Your Company Have the Bench Strength You Need?
At a recent Remodelers Advantage conference, I asked the room full of remodeling company owners about hiring. 75% of those in the room indicated that they would be hiring new people within the next 6 months. This was exciting news because it indicates an optimistic outlook toward the future! Growth! Yes!
The question then is, who to hire? Before you move forward, take a look at your current organizational structure and think about the future. Plan to hire employees that will help you build your bench with an eye to the future.
Bench Strength : The competence and number of employees ready to fill vacant leadership and other positions.
Do you have employees in the wings to take on more leadership if the business needs it? This need could develop because the company has grown and needs additional skilled managers . . . or because an existing key manager leaves the business, taking his or her talent and skills with them. Unless you prepare in advance, either one of these scenarios could see you scrambling for new employees – a condition that inevitably costs valuable time and money.
Most important, if you hire out of desperation, you might end up paying more than fair value for your new staff person, or hiring the wrong person—triggering another exit and even more distraction. The best way to avoid this unhappy scenario is to build bench strength with smart, thoughtful hiring, and a plan to grow replacements from within.
So to start, ask yourself these questions:
- What is the financial cost involved in hiring a replacement for a key position? Some studies say up to 15X the annual salary of the position.
- What is the loss-of-productivity cost? This can be huge as it affects the entire company as a number of staff members are forced to shift focus to hiring.
- What effects do these costs have on your business and on your remaining key players? Everyone works harder to cover, getting disgruntled and unhappy.
- How will you find this new teammate and how much time will it take? Depending on the process used, expect to invest 100 hours or more between recruiting, reviewing information, interviewing and onboarding.
I think it’s clear that developing a plan to increase bench strength in advance is well worth the effort.
First, assess your current organizational lineup to see if you have employees that have the potential to move to advanced positions in the future. This is especially important for the roles that are the most difficult to fill like Production Manager or a top salesperson. Start with the positions that have a deep impact on the business and would be the most difficult to do without. Especially for these key positions, you should have an understudy in the wings. Not sure who on your team has the potential? Ask. Talk about their goals. During these discussions, you’ll quickly identify those who are ambitious and want to excel. Also, look for the “energy generators.” These people who bring vigor to the table. They will fuel you and each other.
Second, review job descriptions. Clearly defined positions are most crucial when the cost of replacing someone is especially high, such as leaders and key management personnel. Some of the skills and traits required to lead may only develop fully over time; and during a crisis you don’t have time to wait.
Third, hire smart. Picking your team is 90 percent of the battle. Know what skills and experiences different positions require and use it to find the best people. Also, think ahead and make sure that everyone you hire has the potential for advancement.
Fourth, train, train, train. Help your team members get ahead. Give them the opportunity to take on more responsibility and learn new aspects of positions within the company.
For example, do your lead carpenters have an opportunity to learn scheduling? Is the Production Coordinator learning the basics of estimating? Are you teaching the entire team how to decipher financial and understand how to generate profits?
This type of ongoing training will help inpiduals be ready to move up when you need them. Another benefit is this: As the rest of the staff sees a team member move up, they’ll get excited about the opportunities that exists for them as well and this means retaining your talent far longer than in the past.
Building bench strength is a positive move for the company as well as for each individual on the team.
What about you?
Are you planning on hiring in the near future? Have you been taking bench strength into consideration as you build your team? I look forward to hearing from you!