One of the most hyped IPO of the year was the social media darling, Facebook. In May it was offered to the public at $38 a share. Mark Zuckerberg became a gazillionnaire in a matter of moments. If you were lucky enough to get a few shares, you felt like you won the lottery, dreaming of the stock value rising with the number of Facebook users.
Today I read a story about Facebook stock and how disappointed investors are with its performance. As of today, it was listed at $21.01 per share, a cool $17 loss per share in just a few months. Yikes! If you had bought 1,000 shares, you’d be out $17,000 already. How quickly it lost its value. No doubt Facebook will turn out to be a good investment, and it will probably increase in value as the company makes changes and enhancements, but what looks good at the beginning doesn’t always look as good later on.
If you’re hiring employees, you’re making an investment much like buying stock. You’re betting the person you hire will live up to its initial offering and grow in value to the company over time. There is no guarantee, but if you’ve done your homework, you can pick a winner.
1. Check everything. In haste to get a position filled, it’s easy to skip a few reference checks or put the start date before the background check is complete. Not everything on a resume is true. Applicants stretch out employment dates and inflate titles on occasion. If you want to be sure you’re getting the real thing, complete your due diligence before making an offer.
2. Don’t fall to pre-hire pressure. Negotiations can get tough. No matter how good an applicant is, starting a new employee out with a salary that’s way out of line can come back to haunt you. Before long, her co-workers will know she’s making more than others, which can be rough on her and the manager. Besides, you may be paying for more than you’re going to get in return. Better to negotiate an accelerated review date instead of a big salary.
3. Be honest about the position. Do you have periods where everyone has to work 10 hours days or over the weekends, no exceptions? Is the company going through a financial crisis? Is there a merger or acquisition about to happen? Are the Feds going to indict the CFO for insider trading in a few weeks? Some information is confidential, but it’s better to be honest about the downside of a job than paint a rosy but false picture.
4. Is the applicant a good “fit” for the job? If you’re a bunch of laid-back pranksters, a buttoned-down introvert may not feel comfortable. He may try to tough it out, work alone and avoid everyone or just give up and leave. Employers make the biggest investment in a new employee in the first three months. Recruiting, hiring, orientation and training cost money, time and often returns low initial productivity.
People aren’t copy machines or laptops or shares of stock, but they are business investments. Make sure you pick a winner that will return dividends for years to come.
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