It is common enough for businesses to hire management as they go, without any strategic thinking as to how to hire a manager: This can have disastrous consequences for a company. According to Gallup, 82% of businesses make the wrong hire when it comes to management.
Here we set out some key steps that any business should consider following when hiring a manager.
1. At a certain point of growth, business founders need to think about how to hire a manager whom they can delegate tasks to.
2. The benefits of hiring a manager include: aiding business growth, managing liability, and allowing the founders to step back from day-to-day operations.
3. When considering how to hire a manager, businesses need to think about governance, the candidate profile, a recruitment strategy, internal promotions, interviewing techniques and the most important leadership qualities.
4. Hiring a recruitment partner can be useful way for businesses to hire managers more efficiently.
What Is a Manager?
The answer to this question may seem too obvious to be worth answering: However, the variety of different ways in which the term ‘manager’ is used means that it is worth defining exactly what we are talking about.
According to one prominent early management theorist, Henri Fayol, a manager:
- coordinates and
Most commonly, perhaps, we talk of people managers (i.e., those with employees as direct reports), but there are also project managers, business development managers, account managers and finance managers, all of whom often do not have people management responsibilities.
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Of those with people management responsibilities, it is common to speak of:
- Senior managers. These individuals (which include the executives of the organization or the ‘C suite’), are responsible for the day-to-day running of the company. Senior management should be distinguished from the Board of Directors of the Company (‘the Board’). The board has a governance, rather than a management role (though it is common for some senior managers, such as the CEO, to also be a member of the Board);
- Middle managers. These individuals sit in the middle of the management hierarchy. They may have the title ‘branch manager’, ‘regional manager’ or (when managing a national location) ‘country manager‘;
- Lower managers. The lower managers (who may be called ‘frontline managers’ or ‘team leaders’ depending on their role) oversee the work of regular employees.
The management of an organization should also be contrasted with the officers of a corporation: While some managers are usually officers (for example, the Chief Executive Officer and Chief Financial Officer), ‘officer‘ is a specific role under corporations/company law, bringing duties under those laws.
Why Hire a Manager?Perhaps the answer seems obvious, but why should the owners/directors of a company consider hiring a manager? We set out some of the benefits of hiring a manager below:
- Business Growth
- At a certain point, a startup business will have grown to a point where the original founders are unable to do all the work of the business itself. At this point, the founders usually hire employees and themselves become the managers. But eventually this is no longer sustainable and it is necessary to have one or more managers that sit between the founders and lower-level employees.
- Compliance and legal liability management
- The founders of a company are likely to be the owners (though there may be other investors), directors, and sole officers of the company.
- Being a director and officer of a company carries a range of legal and compliance risks (for example, officers have strict duties of care to an organization and are often required to sign off on key reports). Hiring of senior management can be an effective way of passing on the risk and responsibility to someone else.
- Stepping back
- The founders of a company may not wish to run the company directly forever. By hiring senior managers, the founders can pass on responsibility to other individuals. giving them space to focus on other business ventures.
How to Hire a Manager: Key Tips
When considering hiring a manager, we recommend the following to maximize the chances of making the right hire:
- 1. Think about the broader management and governance framework
- At the most senior level, businesses must consider how managers will fit within the governance and management arrangements of the company: For example, will the CEO ex officio, be a member of the Board? There are pros and cons to this: CEO board membership helps ensure a fully-informed board. On the other hand, it presents a conflict of interest, and can make performance review of the CEO more complicated.
- 2. Form the candidate profile and job description
- The candidate profile is a specification of an open position in an organization, according to the desired characteristics of the employee, as well as the methods intended for hiring that individual.
- Robust candidate profiles are necessary to ensure that the business targets its manager recruitment correctly.
- 3. Come up with a recruitment strategy
- The recruitment strategy sets out a detailed plan for hiring the manager.
- This will include candidate profiles, but also integrate manager recruitment with the broader recruitment goals of the organization.
- 4. Think about an internal promotion
- If the business already has existing employees, before going out for an external hire it is worth considering whether an internal promotion could work.
- Advantages of an internal promotion include:
- Cost savings. With no recruitment costs, all else being equal, it can be a lot cheaper to hire from within;
- Risk reduction. As mentioned earlier, a major risk for startups arises from hiring the wrong person. Promoting an employee you already know to manager reduces the risk of an external hire who is not the right fit;
- Staff retention. Promotion opportunities are important for motivating and retaining existing employees who might otherwise look elsewhere for their next opportunity.
- 5. Interviewing technique
- In a management context, due to the importance of soft skills, it is especially important to consider asking behavioral questions. This can be contrasted with competency questions, which relate to the specific requirements of the job description.
- Behavioral questions could include questions like:
- Can you tell us about a time you handled a challenging situation, and what you did to overcome those challenges?
- Can you explain a situation where you made a mistake, and what you did to try and rectify that mistake?
- Give an example of a time when you persuaded someone, and explain how you did it.
- 6. Consider a remote position
- It is worth the business considering whether, given their industry and the nature of the business itself, the business can hire a manager remotely.
- If recruiting remotely, it is worth considering:
- Remote interviewing issues. This means thinking about the correct tech platform for the interview, and having a plan for dealing with connectivity issues.
- Remote setup requirements. The business needs to consider what tech must be in place for the manager to carry out their role effectively from a remote location (e.g., remote desktops and tracking software).
- 7. Focus on candidates with the right leadership qualities
- Highly sought after leadership qualities for managers include:
- Strategic perspective. Managers need to be able to ‘step outside’ the day-to-day operations of the business to reflect on and advise on future direction and strategy;
- Trust. Good leaders don’t micro-manage: They develop their team to operate with a high degree of autonomy. Similarly, it is important that other leaders in the business can trust the new manager;
- Effective communication skills. Good leaders can communicate their expectations equally well to different levels of the organization;
- Leadership by example. Good leadership lies not in what the manager says, but in what they do.
How to Hire a Manager with a Recruitment Partner
Given the serious possible consequences of a poor hire, it is worth every business considering whether they should engage a recruitment partner to source an employee for a new manager role. This is especially true when a business is considering hiring internationally. Benefits of using a recruitment partner include:
- Recruiting and hiring are specialized skills. Even where business founders know how to effectively hire managers, this often won’t be an efficient use of their time.
- Using a recruitment partner means engaging the services of someone who specializes in the recruitment and hiring of managers. They already know the right venues and processes to source the talent you need.
- Recruiting scope
- Recruitment is not just about sticking up some job ads on jobsites and hoping for the best. Especially at the management level, recruitment partners can tap into a range of informal networks to get in touch with potential hires.
- International coverage
- Many (though not all) recruitment partners have international coverage and can take care of global hiring.
- This means the potential to find a manager in multiple international locations. If the manager’s role is remote, the scope of hire is increased even further.
For more suggestions about why you should engage a recruitment partner see Seven Reasons Why You Should Outsource Recruitment.
While recruitment and staffing firms differ in their approach, a common process for hiring managers would proceed as follows:
- 1. Sign an engagement agreement
- The client company and the recruitment firm sign an agreement setting out the scope of the required services
- 2. Recruitment channels and outreach
- The recruitment firm uses job sites, traditional job advertising, LinkedIn, and informal networks, to come up with a shortlist of managers for potential hire.
- 3. Compliance and assurance
- When a business hires a manager without knowing how to hire a manager, it creates compliance risks.
- Managers, as employees, are of course entitled to all the standard protections and benefits as a regular employee.
- But there are additional compliance and legal issues that need to be considered when hiring senior managers. For example, will they be subject to ‘non-compete’ clauses which prevent them from working for competitors?
- 4. Recruitment firm carries out initial screening
- The recruitment firm may itself carry out initial interviews, or testing (e.g., psychometric testing), to determine whether the candidates are worth a more formal interview.
- 5. Formal interview with client company
- The client company formally interviews the candidates for the manager position based on shortlist and information provided by the recruitment firm.
- 6. Manager hired
- The client hires the manager and onboards them with a compliant employment contract.
- In some cases, the recruitment firm will double as a Professional Employer Organization (PEO) and offer an Employer of Record solution. In this situation, the PEO formally hires and onboards the manager. The manager then goes on the payroll of the PEO who takes care of all tax withholding, payments, and benefits administration. At the same time, the manager continues to work at the day-to-day direction of the client company.
When thinking about hiring a manager, businesses need to consider a range of matters including:
- the broader governance framework;
- the candidate profile;
- a recruitment strategy;
- the possibility of internal promotion;
- interviewing technique;
- the possibility of remote work; and,
- key leadership qualities.
Where businesses are not quite sure how to hire a manager, a recruitment partner can be useful. Horizons specializes in the recruitment and hiring of employees and managers all over the world.
Contact us to find out more about our recruitment solutions.