Record high unemployment not only impacts those who have lost their jobs, but it presents some new challenges for entrepreneurs and small businesses looking for reliable human resources. This past year I learned a few lessons on this subject. Hopefully this insight can prevent you from experiencing similar situations.
The Internet offers a vast pool of talent when you are looking for perm or contract help. From Linkedin to Twitter, you can have access to thousands of people within minutes. You post your needs, the assignment description and in no time you can connect with a perfect resource, or someone selling you their qualifications, but they are not sharing all the facts for you to know, they are not the one.
As an entrepreneur, we don’t always have the luxury of time, no HR department to conduct deep background checks and so we make quick decisions. So how does this translate into the ugly twists with sour results?
Here are my stories and what I will do next time.
- Make time to test contract talent and employees. There are more people than ever really strapped for a cash, swimming in debt and some are extremely desperate for a job. Many will over sell you. I experienced this scenario. And don’t be fooled by three degrees either. I honestly believe there are many smart folks out there who have earned multitudes of degrees and there are equally as many who are not prepared to contribute to an entrepreneurial enterprise and have so many degrees because they are putting off getting anything done. Give them assignments in a controlled placed and with a defined time frame.
- Ask them if they are a full fledged business service provider or are they just picking up projects until they find a full time gig. This situation has cost me money and time. I posted a clearly contract assignment on Linkedin. Received many qualified resumes. I narrowed it down to a couple of people. At that point, started investing serious time in educating the candidates with details on the project, signed NDAs and exchanged lots of documents. After a week of this, I get a call from one of the candidates, “I have been offered a job and sorry but can’t help you on your project”. You mean the one we spent 40 hours on?
- Don’t prepay until you are 190% convinced they are a superstar and reliable. I engaged a social media person to help me with traffic building. We signed a contract detailing the project, I paid him upfront for a portion of the project. A month ago, he tells me he got a full time job and is to swamped. He can’t do the work and he also will not return the money I advanced him. And now he does not even return my phone calls or emails.
- Clearly provide paperwork to talent stating their contract status and that you are not an employer, now or ever in the past. I was not dinged on this one, but I did have to waste an hour and send a registered letter to a state unemployment office. I hired a contract PR person, had her sign a 1099 and provided her a purchase order, all clearly communicating she was contract. Apparently, she was collecting unemployment and as she was updating her case, she gave my company name to the state of NY as a part-time job provider and they attempted to suck me for confirmation and likely an unemployment contribution. Which would have notched up the tax rate I pay for for me and my other employees.
Finding the right people is already a tough task when you are a small business. Be extra aware and cautious in these recession recovery times, because unemployment is a real factor in human pool of talent.
I just wanted to comment on this because these are important points for the small biz owner looking for help. On the flip side, I am also an unemployed worker (was laid off, am looking for work FT but venturing out in entrepreneurial and contract opportunities as I search).
I think that as with anything, a few rotten apples will spoil the bunch. Yes, job seekers may be very eager to find a job the majority of us don’t want to find ourselves in a position we are not qualified for and would be miserable in, and would not lie or do absolutely anything to land any old job. I myself am a creative talent looking for the right fit. I also would never fail to follow through on a contract job once accepted. That’s my reputation at stake! And each contract employer has the potential to be a reference, even during a FT job search. If I found a FT job I would inform that company of my availability based on the end of my current contract job.
About the unemployment: I’ve been through this with NY state. They make you stop claiming weekly benefits if you’re working on a contract job, and when you start claiming weekly again after the contract job has ended, they send you a letter making you state the reason you were not claiming for the past couple of weeks, and if it’s because you were working — even freelance/contract — they make you list the name of the employer. If you don’t fill out this paper and mail it back within one week, NY state will terminate your unemployment benefits! So it’s not ever the contract workers fault. This is state protocol in order to stay on your unemployment claim once a contract job has ended. They may try to get a new claim out of the contract job but this never works and the claimant is always put back on his or her original claim. Personally, we want to stay on our original claims, as we were making a full salary at the time of our layoff and are receiving the maximum benefit amount on that claim. A new claim on a part-time contract job would result in a lower weekly benefit amount (and that’s what NY state is hoping for in making us report this information)!
Thanks for posting. We took a long time identifying someone for a sales position. We did the due diligence. We thought we finally found someone and upped the compensation because we thought we nailed it. Well, the person…who was excited and engaged at first, didn’t show up one day. He just took off without so much as a thank you! What really irks me is that we asked him daily how things were going, how could we help support him…etc. Anyway – goods news is we hired him as a 1099 with a 3-month trial. He left after 6 weeks without billing for the last two.
And so we move on….