job market, unemployment, hire, HR

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.

  1. 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.
  2. 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?
  3. 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.
  4. 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.

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