How do you get the right employees on board? How do you keep them around for the long haul?
Part of long-term business success is assembling a winning team. In his discussion of how to hire the right people and keep them, Patrick Bet-David argues that you shouldn’t rely on your gut feelings and that you must provide attractive offers with follow-through.
Keep reading for more on Bet-David’s hiring and retention strategies.
Hiring and Retaining the Right People
To succeed in business, you must work with a team—not alone. You have to know how to hire the right people and lead them well so they’ll want to stick around.
(Shortform note: Bet-David doesn’t list the specific advantages of teamwork over solo work. These include greater creativity and skill, as multiple employees bring a wider swath of ideas and competencies than any individual can.)
Hire the Right People
Do due diligence on potential hires by asking mutual colleagues about them, recommends Bet-David. Don’t trust your gut but rather rely on hard facts that indicate whether they’re a good fit. Additionally, question your initial impression of the person by asking yourself what appeals to you about them, what skills they lack, if there are red flags on their resume, and if the background check revealed anything negative.
(Shortform note: Bet-David recommends questioning your gut instincts about a potential hire: in other words, working to remove your personal bias from the hiring process. According to Jennifer Eberhardt in Biased, reliance on bias increases when you’re under time pressure and you lack specific criteria by which to judge candidates. Therefore, in addition to asking mutual colleagues about a potential hire, slow down the hiring process and establish set criteria to increase your chances of making the right hire.)
Furthermore, ensure applicants have a compelling reason to join your company, advises Bet-David. Think about what you can offer them: benefits, a unique work experience, exceptional leadership, or the opportunity to improve.
(Shortform note: Bet-David recommends listing the benefits you can offer employees. But it’s also worth asking what benefits employees want and obtaining them if you can. Private health insurance, flexible schedules, and generous and flexible annual leave are highly desirable to most employees.)
Retain the Right People
Next, retain employees through an attractive compensation plan, counsels Bet-David. Compensation plans are attractive when they motivate employees to help the company reach its goals and reward them for doing so. For example, salespeople may earn a commission on every sale they make. Determine what you want your employees to accomplish, and pay them more for doing it successfully.
(Shortform note: We can see compensation plans as a way of putting employees’ skin in the game, a concept Nassim Nicholas Taleb describes in his book by the same name. Having skin in the game means you stand to lose something if a situation turns out poorly, and this threat of loss makes you work hard to prevent that poor outcome. Similarly, when employees risk losing compensation if they perform badly, they’re motivated to work hard—like a salesperson who earns less when they fail to close sales.)
Bet-David thinks giving employees the opportunity to earn equity is the best form of compensation because they’ll feel they have a stake in the success of the company and will work harder to make it succeed—a win-win.
(Shortform note: In Zero to One, Peter Thiel provides additional context for why equity is a good form of compensation. He argues that when employees—Thiel focuses in particular on CEOs—work for equity, they shift their thinking from short-term to long-term, which leads to healthy, sustained growth for the company.)