I’ve been quoted in the 9/14/14 The Guardian.com’s U.S. edition & the 9/12 edition of Spark Business IQSM, a small business publication of Capital One. The Spark article is here as a PDF. The Guardian article is here as a PDF. Both articles are also reproduced below.
HOW TO BALANCE HIRING FOR CULTURE WITH HIRING FOR SKILL
by: Sarita Harbour
Sep 12, 2014
You’ve hired a new employee who’s a great fit with your existing staff. You can already picture team meetings and post-work get-togethers with this new staff member. But what if you discover the new employee can’t perform the critical skills required for the role?
“Organizations need to hire for performance and culture,” says Mike Kennedy, director of marketing at Talent Analytics, Corp , a workforce analytics provider. “If you have a great company culture but employees that don’t perform, you’re going to close your doors,” he says.
At the same time, if no one on your team gets along, that’s also a problem that can impact productivity.
“Focusing on skills and ignoring culture could give you someone who crushes both their goals and their relationships with teammates,” says Heather Neisen, human resources manager for TechnologyAdvice , an online service business matching software vendors to business technology customers.
If you’re unsure how to balance hiring for specific skills with hiring for business culture, here are four tips.
Clarify Your Business Culture
Before assessing whether a job candidate is a good fit for your culture, make sure you and your team know exactly what that culture is.
“One of the keys to successfully hiring … is the organization has to define its culture,” says Charles Krugel , a Chicago-based human resources attorney and counselor. But defining a business culture may be easier said than done.
“However, I also caution companies that they also need to be aware of their own biases, especially if these biases relate to any of the legally protected classes, such as race, national origin or religion,” says Krugel. “If company culture is biased in such ways, the employer can be held legally liable for these biases.”
To clarify your business culture, start with the basics. Jay Rao and Joseph Weintraub described six building blocks of a business culture in the Spring 2013 edition of MIT Sloan Management Review . Certain values, behaviors, climate, resources, processes, and successes were found in businesses with an innovative culture. Whatever your business culture is, make sure your current and prospective staff understand it.
“This definition of culture (or what can also be called a mission statement or other popular vernacular) should be made public so that all potential employees are aware of what it is so that they can assess whether or not they’re capable of fitting in,” says Krugel.
Put a Balanced Hiring Process in Place
The next step is to identify candidates who fit both the culture and the technical or skill requirements of a role. But how do you balance all the necessary criteria when going through the interview and hiring process?
“We do focus a lot on the culture fit of a potential hire, but that doesn’t mean we ignore skill,” says Neisen of Technology Advice. Her company established a 13-step process and a scoring system to help eliminate snap hiring decisions and identify key factors in the cultural fit and skill level of each candidate.
Neisen says a focus on goals and professional growth is part of the Technology Advice culture, so the hiring team knows that a person requires a certain level of ability to also have a great cultural fit with the company.
For us, the scoring is a weighted combination of goals, attitude and work ethic – you must have all three,” she says.
Test Drive Potential Hires
To really balance out the culture versus skills question, why not test drive candidates to evaluate both? This is what Technology Advice does with potential hires.
“Bringing them to the office for a few hours and giving them a specific task reveals how they work with our team and if they have the skills necessary to do the job,” says Neisen.
Additionally, it gives candidates a taste of what it’s like to work there. “It also gives them an idea if they’ll truly like the job and the team,” she says.
Be Flexible
Hiring a new employee isn’t an exact science. Depending on the role the person plays in your business, you may lean more towards a highly skilled individual for one position, and choose a candidate who is a better cultural fit for a different position. Kennedy says to also look at the culture within your business.
“Sales teams have a different culture than engineering teams, so one size does not fit all in terms of what traits to look for,” he says. ” Instead, identify what top and bottom performers look like, then hire against it.”
At the same time, Neisen says while it’s important for your top performers to work well with each other, beware of hiring just one “type.” Instead, she says to consider what’s driving each applicant to your company.
“It’s always the primary goal to find people who are motivated to work hard for your team, deliver results, and grow as a professional while truly enjoying the entire ride,” says Neisen. “Sometimes if they have the passion and personality to fit your team and your goals, you can overlook slight skill deficiencies in lieu of training them up as they go.”
Capital One does not provide, endorse, nor guarantee any third-party product, service, information or recommendation listed above. The third parties listed are not affiliated with Capital One and are solely responsible for their products and services. All trademarks are the property of their respective owners.
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Want a loan for your business? The loan officer is checking your Facebook and Twitter comments
As small businesses continue to have trouble attracting attention from big banks, many have turned to online alternative lenders who charge higher fees – and subject companies to a social-media smell test
Fallen Arrows in Atlanta is a custom printer that has printed environmentally sustainable t-shirts for artists including Gorillaz. It’s a center of the Atlanta arts scene and is so influential that it designates the city’s tastemakers. But it can’t print money. So when the firm needed financing, founder Tito Sands went to his local bank.
How’d that go? Not so swimmingly.
“When we recently approached a traditional lender for a business loan, it was not a productive experience,” says Sands.
As one does, Sands started googling for a savior. Up came a startup called Kabbage.
“Even though the process is online, the fact that I’m in Atlanta – as is Kabbage – jumped out at me”, Sands says.
Welcome to the world of alternate lenders for small business. With casual names like AmeriMerchant, Kabbage and Dealstuck, they don’t have the mahogany-walled establishment cast of JP Morgan Chase or Bank of America.
But they step in where a traditional bank might not lend to a small business. They exist online, where a nice suit and an open face won’t impress them. As a result, their techniques are sometimes unorthodox.
An example: to qualify for a loan from Kabbage and the others, small businesses don’t just have to prove decent revenues and good credit. They also have to pass a social-media reputational smell test: what do Facebook and Twitter commenters say about them?
It’s a new wrinkle in the previously stiff world of banking. Kabbage is linked to the Facebook and Twitter sites of Sands’ Fallen Arrows and other small businesses to which it has loaned money. A firm such as Kabbage can easily see what customers are saying about a business through their social-media sites.
But rest easy, Luddite small business-owners: the social-media diagnostics are, for now, mostly cursory.
“Social media is an easy and credible source of information for screening companies,” said Charles A Krugel, a Chicago-based labor and employment attorney. “The information is available to anyone, and the person being checked is being evaluated on their behavior. My impression is most screening companies that check social media just want to make sure that they’re not giving the OK on someone who may be a terrorist or sexual predator.”
According to the FTC’s division of privacy and identity protection, companies that use social media in their lending decisions don’t have to verify that information since they don’t provide it to third parties like a reporting agency does.
“Most small business lenders aren’t using social data to make a credit decision. They may use it to confirm the business’ identity and validate the length of time they have been in business,” said kabbage.com COO and co-founder Kathryn Petralia. “Kabbage uses it to provide incremental access to capital, not as part of an originations model.”
Sands came through the process an enthusiast. “The loan process was quick and easy and we’ve gone back to Kabbage multiple times,” he says.
The convenience comes at a cost. While these micro-lenders offer a quicker lending alternative, it is also more expensive, with reliably higher fees. The loan amounts are also much smaller, so they can be paid back in a few months.
For Kabbage, the fees are 1% to 13.5% of the selected loan amount the first two months and 1% for each of the remaining four months.
Every month, for six months, a borrower pays back one sixth of the total loan amount plus the monthly fee. There are no early payment fees.
According to the company, early payoff will shorten the length of the loans and save on future fees.
The company also says technology is what enables it to make small, quick loans.
“The banks’ inability to provide lines of credit under $100,000 has enabled the influx of new business lenders in the market,” says Petralia. “It’s not that the banks don’t want to make those loans, it’s simply that they lack the technology and automation to facilitate them profitably.”
The question is how long these online micro-lenders can avoid being bigfooted by giant banks. Traditional banks have taken notice of the popularity of online lending, even if they haven’t quite mastered the tune.
A recent failed effort, for instance, had Ohio-based Key Bank hooking up with SoMoLend, which employed a social funding platform.
Last year at this time, Ohio’s Division of Securities began investigating SoMoLend (short for Social Mobile Local Lending) for alleged fraudulent practices. The division filed a document last June known as a “notice of intent” to issue a cease and desist order.
That document accused SoMoLend and Candace Klein, the company’s CEO at the time, of a variety of misdeeds. Those included selling unregistered securities, committing securities fraud by overstating SoMoLend’s early success and making fraudulent financial projections by exaggerating revenue projections during public presentations and statements. The firm shut down in February of this year.
Attempts to reach Key Bank were unsuccessful. SoMoLend founder Klein is now chief strategy officer at dealstruck.com in California.
“One of the things I think the Key-SoMoLend story indicates is that some banks that have a strong presence in small-business lending would like very much to capture the small-business working capital market of strictly online lenders but have to balance that with safety and soundness requirements,” said Christine Pratt, a senior analyst with Boston-based Aite Group.
“I would say that they probably hoped to find an IT solution with SoMo that would provide better insight into the borrowers operations”.
The marriage between an established bank – highly regulated – and an online lender highlighted how underscrutinized the business of online lending can be.
“The assumption has been that businesses are simply more sophisticated than consumers, and therefore require less supervision,” Petralia says.
But bigger banks are coming around to small-business lending, albeit while seeking safety in numbers.
In a report, Pratt points to New York City-based BoeFly.com as a lender of the future. It’s more like a dating service: since 2010, the site has matched small-business customers to lenders willing to finance working capital and other types of commercial loans.
Boefly’s available lenders include 100 US banks with assets of more than $10bn and more than 600 with assets of more than $3bn, as well as a handful of large credit unions. In 2013, the company BoeFly had more than 3,600 lenders on its exchange.
Its initial customers were small businesses with limited access to bank funding due to geography and collateral. The process is uncomplicated: BoeFly alerts a lender that a borrower that fits its profile is looking for a loan. The lender must receive permission from the borrower before it can access the lender’s information.
Connections are made in real time, like Facebook friending. Borrowers fill out just one application online to have their credit request considered by many lenders. Once approved, the goal is to fund these loans quickly.
Small lenders who use the platform well – which means, fast – can level the competitive playing field with larger banks. As many small-business owners who have struggled to find a loan can tell you, the lending business could use a little competition.
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