With Nevada's unemployment rate at 13.2 percent in August, odds are you aren't looking to hire many new people. This is the worst labor market that we have seen in our state in our lifetimes.
It's also one of the greatest opportunities in recent history for local business. Never before has competition for high-caliber talent been so thin.
Very few Nevada businesses have skated through this recession without watching their revenues drop. Businessmen that we all are, it's forced us to cut costs, get more efficient, and find creative new ways to add value.
There is a cold reality that many business owners need to come to terms with, and the opportunistic ones probably already have: This economic downturn offers tremendous cover to get rid of unproductive, lower-quality workers. This is a once-in-a-generation chance to clean out the detritus and replace it with higher-value human capital.
Now is the time to boil your workforce down to the elite, high-value talent. Get rid of the ones whose productivity doesn't justify their costs. This will free up cash flow that you can then reallocate to new workers that are less expensive, but are more likely to add economic value to the bottom line.
Certainly there are costs of all sorts associated with workplace turnover. These are short-term costs, and the short-term budget is more than likely pretty tight right now. Your firm simply may not have the tactical capacity to make these decisions. But doing so is the correct long-term strategy. Think of these costs today as investments that will bear dividends later on. When the local economy recovers your firm will be positioned with a higher-quality, lower-cost workforce which will magnify your profits and unlock new paths for growth.
For over two decades, we've operated a fund of hedge funds. We've spent our entire careers searching for, analyzing, and interviewing hedge fund managers. Our purpose, in a nutshell, is to "hire" great trading talent. These individuals are among the most successful in the entire world in any field.
As an investment firm, we deal with assets, revenues, and costs that are denominated in large dollars. But in terms of personnel, we're small. We don't have a staffing department. As a local business, you may not either. Recruiting fresh, high-quality employees might be the most difficult task you have aside from firing existing ones. Nobody said running a successful business was going to be easy.
Here's what to look for:
Balanced optimism. This is it, the big one, the "alpha trait" that's common to an overwhelming majority of highly successful individuals. These are folks that are generally optimistic about life and tend to frame nearly everything in a positive manner. But they aren't simply pie-in-the-sky idealists. They are also deeply rooted to reality. They understand the limits of practicality and use that knowledge to guide their optimism. Often their success manifests itself financially, but not always. Great educators and social servants of all shapes and sizes share this trait.
As a successful business owner or manager, you might notice this quality in yourself, or if asked, those close to you might mention this quality.
Unfortunately, it's very difficult to screen for. Don't fall victim to "Sexy Resume Syndrome" and be fooled by Ivy League degrees and an employment history full of prestigious firms. You might pay a lot of money for that candidate and get something very different from what you really need. All those fancy achievements have little correlation with balanced optimism.
Instead, focus on and discuss their failures, specifically their responses to it. Look for individuals who saw benefits and lessons buried inside their mistakes. In our industry, for example, there's nothing more interesting and valuable than watching how a trader responds to a losing year.
A deep need to continually prove oneself. This is a trait that's functionally equivalent to being a hard worker, but to put a finer point on it, the need to continually prove oneself is the reason that drives individuals to work so hard in the first place. These individuals take nothing for granted and do not suffer that ugly pox you may have noticed with so many young job applicants or recent graduates: an overwhelming sense of entitlement.
The good news is that this is really easy to identify. It's a quality that shows up very early, even in young children, and it's something that never really leaves an individual as they age. Kids who feel a need to continually prove themselves in school and at the soccer field turn into adults that work hard on the job to prove themselves. Think of your best workers; part of what makes them your best is that they push themselves every day to prove their worth to you.
Screening for this is a snap. Just make the candidate jump through some hoops to get an interview. In today's market there are individuals sending their resumes out everywhere, desperate for a job. Any job. Don't just call them in for an interview if their resume looks good, make them do a little work for you first. Have them write an essay or solve some problems. Make them prove themselves to you. The candidates you want will respond quickly and appropriately because it's the way they're accustomed to behaving.
Fit for your culture and vision. Obviously you want a candidate who has the qualities you seek, but you and your firm have to give the candidate what they're looking for. Don't take their word for it. Every applicant you interview will claim that they want the job and like the field. Make sure that you are a good fit for them. This is a subtle process and unique to your firm. But it's an important one.
Whether you're simply hiring a new administrative assistant or need to replace a department manager, consider these three qualities and developing a thorough screening process to find them. You'll enjoy the rewards in the years to come.
Jeffrey Jones, a registered investment advisor representative at Jones & Company, and a managing director at Draco Capital Management, both in Reno, publishes a free investment newsletter at TheDraconian.com. Contact him through jonesfunds.com.
