Making Better Hiring Decisions

Failure to Make Good Hiring Decisions~ 

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Half of all hiring decisions don’t work out; I hear money going down the drain of many restaurant establishments as I write this. The reason for this is pretty easy to deduce; either the restaurant owner makes the wrong decision or the candidate decides they are in the wrong job. When budgets are tight and failure is costly, the fine dining restaurant establishment cannot afford to hire the wrong person. So, how do you avoid being in the 50% of hiring decisions that don’t work out? Read on to gain access to the latest thinking and trends to “making better hiring decisions” for the fine dining restaurant establishment.

Hiring Process~ 

Why do some restaurant hiring managers make the wrong hiring decision? The number one mistake hiring managers make is trying to use a one size fits all hiring process—using the same assessments and process for each job. This type of thinking and process will almost always end in unhappy  and employees within the new hires first 18 months. Before you can even be-gin to look for job candidates, you must define the job—what behaviors, knowledge, experience and personal attributes are needed to do the job? If you miss one of these four items you will probably misdiagnosed, and miss the opportunity at identifying people who will succeed or fail as a restaurant employee. The next step in defining job success is to determine what you are willing to sacrifice and how that sacrifice will affect your quality of hire. For example, am I willing to train or do I need people who already have the skills, experience, and knowledge to do the job? There will more than likely be some sacrifice needed or it could take you months to fill the position. Identifying those sacrifices the best you can up front will save you lots of time and money.

Selection System Integration~ 

The second mis-take many restaurant hiring managers make is failure to use and implement a proper selection system. A selection system consists of pre-On-boarding once a candidate is hired includes orientation, training if applicable, development planning and mentoring. Implementing and adhering to a well designed selection system can make a major difference in a successful hire and your relationship with new employees. It also lends itself to assist you in identifying and resolving problems in your hir-ing process. Remember to al-ways define success in the job properly & utilize the information found in the pre-employment assessments. I do want to point out that if you are using an RPO (Recruitment Process Outsourcing) company, you should maintain ongoing conversations about the assessments they are using and how those assessments are working in your hiring process. The best practice is to always provide the RPO recruiters and even your own hiring managers with the feedback you receive from new hires during the on-boarding process.

Crucial Questions~ 

Once you begin using the selection system and seeing results, there are some crucial questions to ask to ensure sustainability of your selection system process. Are my assessments predicting success in the final interview and are they predicting win/win hiring decisions and predicting job performance & engagement? Does my final interview lead to acceptance at an acceptable rate? How do I compare to my competitors or a benchmark? And probably the most important question of all; how am I able to make predictions to increase talent in the future; given my business direction? Wow—that’s a lot of questions and seems a little overwhelm-ing—so you may ask how to quantify this information. Well, the days of gathering information for a hire and after the hire is made just putting it in a file and forgetting about it is over; that information is very valuable and should be used to assess your hiring process and create a template for each job. Once you have hired someone for a position, you have started a job template to be used the next time the position or a similar position needs to be filled. This process of creating the template for the first time is not an overnight process and should take a minimum of 6 months to 1 year to complete. The graph on page 3 can be used as a road map to accomplish and gather information to create your job templates.

A quick overview of the graph: 1) Candidate source is where you found the candidates or how they found you; 2) Assessment data is not only what assessments were used but how the candidates performed; 3) Once the final interviews are performed you should ask how satisfied your managers are with the quality of candidates; 4) You should track how often your job offers yield job acceptance; 5) During orientation, ask your new employee what they thought of the hiring process; 6) Follow-up interviews 6 months after the hire should be performed for the employee and managers to determine how the hire is going and 7) One year after the hire you should review how the employee has performed and how they have engaged with your company as a whole. If, at this one year mark, you have happy employees & managers and enhanced productivity you can proudly say you have a “successful hire.”

Being open-minded to change, combined with a little effort; can lead to avoidance of falling into the 50% of hires that don’t work category. But, more importantly, using the tools of defining your job, a selection system, and building job templates can save you money & time and leave you with happy restaurant employees which means enhanced restaurant operation productivity. And happier employees are less likely to decide they’ve chosen the wrong job. Remember, these steps work together, leaving one or more of them out will more than likely result in continued unsuccessful hires or create vulnerabilities in your hiring process. This is only a broad overview of these tools, so feel free to contact us for further information on how to begin implementing a successful hiring process for your restaurant.

As always, we are here to help you any way we can. Please don’t hesitate to call or email if you need us.

The Deerfield Team
800.233.6428
info@deerfieldadvisors.com

DISCLAIMER

This article is intended only as a general discussion of these issues & we cannot guarantee the accuracy thereof. It does not purport to provide legal, accounting, or other professional advice. If such advice is needed, please consult with your attorney, accountant, or other qualified adviser. The Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Accordingly, the information provided herein is provided with the understanding that Deerfield Advisors is not engaged in rendering legal advice. Deerfield Advisors strongly advises that clients and/or the reader of this publication contact an attorney to obtain advice with respect to any particular issue or problem discussed here. Also, please know that discussions of insurance policy language is descriptive only. We strongly advise that one’s individual policy & one’s advisor be consulted regarding this subject matter before any action is taken in any way. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. The Deerfield Advisor White Paper Series is a registered trademark of Deerfield Asset Management Inc. DBA, Deerfield Advisors and is produced by Deerfield Advisors for the benefit of its clients, and any other use is strictly prohibited. All rights reserved. Copyright © 2015

Insurance Intelligence – Umbrella Liability Coverage

On the Need for Umbrella Liability Coverage. It’s All About Financial Independence~

umbrella1Have you ever heard the phrase “you don’t have to be a millionaire to be sued like one?” Well, it’s true. It happens every day in the court systems all across Texas. There are many nightmare scenarios that demonstrate the need for liability insurance protection; so many, in fact, that the most careful, most conservative person I know…yours truly, has an umbrella policy, and I umbrella2highly recommend it for our clients as well.

 A Nightmare Scenario~

Let’s say, for example, you’re driving down the freeway safely, carefully, and within the posted speed limit, when suddenly an irresponsible driver pulls in front of you trying to get into the other lane to exit, then for some reason slams on his brakes, so you have to swerve over to the next lane to avoid hitting him, and end up rear ending a family of four at 50 mph that’s stopped in traffic. You’ve done untold damage, and it’s really not even your fault, but, because it was a rear-end collision, you will probably be held liable. Not fair, but that’s usually how it goes…The cost of the accident after everything is said and done; medical expenses, lost wages, property damage, etc is off the charts. The next thing you know, you’re served with papers informing you that you’re being sued. The trial happens, a sympathetic jury rules; the verdict comes down for the plaintiff; you were found to be “negligent”. So, with pain & suffering and all the rest added to the award, the grand total comes to an obscene $1.5 million; and to add insult to injury it’s all due within 60 days. What do you do? Well, at this point you have three options: Number one: You write a check for $1.5 million. Number two: If you don’t have the money, you liquidate all the assets you have except your home and a small amount of savings, and perhaps your IRA or 401k. If you’re still short, they come after you for the balance & you file bankruptcy. Losing that kind of money and assets is devastating, but it’s not all bad, at least after 10 years the bankruptcy will be off your credit record, the judgment cleared, and you can start fresh again, right? Wrong! The judgment can be renewed every ten years, which means that the person and his lawyer can hound you for the rest of your life, or until you pay up, whichever comes first. Much better to avoid that nightmare & employ the third option: Call your insurance agent, file the claim and be done with it. Of course option number three only applies if you have an umbrella insurance policy.

Cost Benefit Analysis~

 Which of the above scenarios sounds best to you? The third, of course, just do the cost benefit analysis. Why a cost benefit analysis? Well, it’s very simple. Just like any important purchase or investment decision, you weigh the cost vs. the benefit. There needs to be a reasoned & logical rationale for any insurance buy. For example, if I told you that you could have a $2 million umbrella policy for $4,250 per year, you might say ‘no way, I’ll just be extra careful.” But if I tell you that you can obtain $2 million of coverage for $425, now you have something to think about. I think the latter scenario is a no brainier, which is why I secured umbrella coverage for myself, it meets the common “financial” sense test. If you can transfer that kind of liability to another entity (an insurance company), for that kind of price, you do it. Sign up as quickly as you can before they change their mind. I did it, & I sleep well at night. It’s called peace of mind…financial peace of mind!

How it Works~

How does umbrella coverage work? Umbrella coverage simply “extends” the underlying or primary liability limits you have in place for your auto or home insurance. The need for umbrella coverage is created because carriers limit the amount of primary liability you may purchase. So, let’s say your auto carrier will only allow up to $500,000 of liability, but you determine that you need more insurance protection than that, so you have to seek coverage in the umbrella market to reach your desired limit or amount. Most often, you can secure an umbrella policy through your auto carrier, but not always.

Umbrella coverage is really that simple. It’s just a vehicle to increase your protection from legal liability.

What you’re accomplishing with liability insurance is the transfer of financial risk from yourself to another entity, the insurance company, an important risk management technique.

Final Thoughts~

You can do everything right your whole working life, good investment returns, high rate of savings, careful conservative lifestyle, just to have it all dissolve like a desert mirage, right in front of your eyes, and all for one catastrophic mistake. One mistake in thirty years, but it was the mother of all mistakes, and it not only brought you all the way back to where you started when you were 25 but left you indebted for a long while after that to boot.

It doesn’t matter who you are or what you do, anyone can be sued for the tort of negligence. The society we live in & the system of civil law we live under says you owe a “duty of care” not to inflict bodily injury or property damage on another person.

Many things in life are trade-offs… risk versus reward, cost versus benefit. It’s up to you to weigh the risks and make a wise choice. For me, the consequences of not securing coverage were unacceptable, but only you can decide what’s best for you! At the end of the day, it’s really all about Financial Independence, getting there, and staying there, everyone’s ultimate goal.

The Deerfield Team
800.233.6428
j@deerfieldadvisors.com

DISCLAIMER

This article is intended only as a general discussion of these issues & we cannot guarantee the accuracy thereof. It does not purport to provide legal, accounting, or other professional advice. If such advice is needed, please consult with your attorney, accountant, or other qualified adviser. The Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Accordingly, the information provided herein is provided with the understanding that Deerfield Advisors is not engaged in rendering legal advice. Deerfield Advisors strongly advises that clients and/or the reader of this publication contact an attorney to obtain advice with respect to any particular issue or problem discussed here. Also, please know that discussions of insurance policy language is descriptive only. We strongly advise that one’s individual policy & ones advisor be consulted regarding this subject matter before any action is taken in any way. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. The Deerfield Advisor White Paper Series is a registered trademark of Deerfield Asset Management Inc. DBA, Deerfield Advisors and is produced by Deerfield Advisors for the benefit of its clients, and any other use is strictly prohibited. All rights reserved. Copyright © 2014.

A Brief History & Overview – First in a Series on FMLA

Prior to FMLA~ 

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Prior to the Family Medical Leave Act of 1993, an employer could deny family & medical leave for any rea-son and even fire an employee for taking the leave. This became more of an issue starting in the 1970’s, as more woman be-gan to work outside the home. By 1990, the work force was 47% female and 53% male. Woman routinely lost their jobs when they took four or more weeks off to have a child, which limited career prospects for woman. The result of this was some mothers returning to work too soon, endangering their health, just to protect their jobs.

The Family Medical Leave Act (FMLA) was signed into law by President Bill Clinton on February 5, 1993, just 16 days after he took office, and the law took effect on August 5, 1993. This was a major part of President Clinton’s agenda during his first term, because of the concern about how the provisions for family & medical leave were being handled by US companies. FMLA provides a means for employees to balance their work and family respon-sibilities by taking unpaid leave for cer-tain family and medical reasons. The Act’s primary intent is to promote stability and economic security for families as well as the nation’s interest in preserving the integrity of families.

On January 28, 2008, President Gorge W. Bush signed into law the National Defense Authorization Act (NDAA), which amended the original FMLA to include up to 26 weeks of leave for a spouse, child, parent or other family mem-ber to care for an injured “covered service member” of the armed forces, and up to 12 weeks of qualifying exigency leave when the employee’s spouse, child or parent who is a covered military member on active duty or call-to-duty for one or more qualifying exigencies. Qualifying exigencies include: short-notice deployment, military events and related activities, certain childcare activities, financial and legal arrangements, counseling, rest & recuperation and post deploy-ment activates. Employers and employees can also agree on any other activities that constitute qualifying exigency.

On October 28, 2009, President Barack Obama signed into law the amendments to the NDAA that also im-pacted the FMLA by expanding the military family leave provisions of 2008; these provisions stipulated that “covered active duty” for a regular component of the armed forces means duty during deployment of the member with the Armed Forces to a foreign country. It defined the members of the reserve components of the Armed Forces (US National Guard or Reserves) as duty during deploy-ment to a foreign country under a call or order to active duty in a contin-gency operation defined in section 101 (a)(13)(B) of titled 10, Unites States Code. This amendment also expanded the military caregiver leave to include a veteran in the definition of “covered servicemember,” a veteran “who is undergoing medical treatment, recuperation, or therapy for a serious in-jury or illness,” if the veteran was member of the Armed Forces “at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy.” The term “serious illness” was also expanded to include any prior injury or illness that “existed before the beginning of the member’s active duty and was aggravated by service in the line of duty in the Armed Forces.”

As of February 15, 2012, the US Department of Labor announced that it will publish a Notice of Proposed Rulemaking to expand military family leave provisions and leave eligibility for airline flight crew employees.

FMLA Eligibility 

As you can see, FMLA and NDAA amendments are very extensive and can be very confusing. That is why you need a solid personal leave of absence policy and make sure you are consulting with an FMLA specialist to cre-ate and implement the program.

All public entities are eligible employers under FMLA. Private entities must meet the following requirements to be eligible FMLA employers: 1) Employ 50 or more employees in 20 or more weeks in a 12 month period; 2) The 50 employees must work within a 75 mile radius of each other. When counting your employees, you need to include all employees — full-time, part-time, temp, seasonal, active and inactive. Inactive employees could be employees who are not currently working due to seasonal work, vacation or some type of leave.

3) Work at a location where at least 59 employees are employed by the Company within 75 miles, as of the date the leave is requested. Companies are still required to post all FMLA guidelines if you have 50 or more employees even if they are not in the 75 mile radius of each other.

In any case in which a husband and wife are entitled to leave and are employed by the same employer, the combined number of workweeks of leave to which both may be entitled may be limited to 12 workweeks for bond-ing leave (caring for newborn or adoption), and family care leave (care for a parent with serious health condition) Or 26 workweeks for military caregiver leave, during any 12 month period. Couples that are not married that work for the same company and are requesting bonding leave, are entitled to 12 workweeks each. Remember all eligible employees are protected from the date the leave request, not just from the start date of leave.

Reasons for FMLA leave can be confusing and asterisks accompany most all of them. We will review the list of reasons, but keep in mind before denying any FMLA leave, consult with a FMLA specialist or attorney to ensure the reason is not one of those asterisks. FMLA leave may be used for one of the following reasons: 1) The birth, adoption, or foster care of an employee’s child within 12 months following birth or placement of the child; 2) To care for an immediate family member (spouse, child, or parent with a serious health condition); 3) An employee’s inability to work because of a serious health condition; 4) A “qualifying exigency,” as defined under the FMLA for military operations arising out of a spouse’s, child’s, or parent’s active duty or call to duty as a member of the military reserves or National Guard in support of a “contingency operation” declared by the US Secretary of Defense, President or Congress as required by law; 5) To care for a spouse, child, parent or next of kin who is an Armed Forces member (including military reserves & National Guard) undergoing medical treatment, recuperation , or therapy, due to a serious injury or ill-ness incurred in the line of duty.

A serious health condition is defined by the following: 1) Any period of incapacity due to pregnancy and prena-tal care; 2) A chronic serious health condition (such as asthma, diabetes, etc); 3) A permanent or long-term condition for which treatment may not be effective (such as Alz-heimer, strokes, terminal dis-eases, etc; 4) To receive multi-ple treatments (including re-covery from) either for re-storative surgery after an acci-dent or other injury, or for a condition that would likely result in a period of incapacity of more than three consecu-tive calendar days in the ab-sence of medical intervention or treatment (such as dialysis, chemotherapy, etc. Health Care Providers are defined as the following: 1) Doctor of medicine or osteopathy; 2) Podiatrist, dentists, psycholo-gists, optometrists, chiroprac-tors; 3) Nurse practitioners, midwives, social workers, physician assistants; 4) Christian Science Practitioners; 5) Health Care providers approved by employer’s group health plan; 6) Provider outside of the United States who is authorized to practice in accordance with the law of that country.

Final Thoughts~ 

This was only a brief history and overview of the Family Medical Leave Act. There are many facets of the Act, so be on the lookout for future Deerfield Advisors’ white papers that will review topics such as what is required of employers, what employees are re-sponsible for, definitions of terms, how the ADA (American Disability Act) can affect FMLA, and best practices for complying with FMLA. The law is ever changing, so we strongly recommend that if you are an eligible FMLA company, you ensure your company has

a firm understanding of your responsibilities when it comes to FMLA. Keep in mind that not only can your company be sued, but also your managers and HR professionals can be held person-ally liable for any FMLA vio-lations. Feel free to contact us for further informa-tion on how to.

The Deerfield Team
800.233.6428
j@deerfieldadvisors.com

Making Better “Restaurant Employee” Hiring Decisions

waiter3diningHalf of all hiring decisions don’t work out; I hear money going down the drain of many restaurant establishments as I write this. The reason for this is pretty easy to deduce; either the restaurant owner makes the wrong decision or the candidate decides they are in the wrong job. When budgets are tight and failure is costly, the fine dining restaurant establishment cannot afford to hire the wrong person. So, how do you avoid being in the 50% of hiring decisions that don’t work out? Read on to gain access to the latest thinking and trends to “making better hiring decisions” for the fine dining restaurant establishment.

Why do some restaurant hiring managers make the wrong hiring decision? The number one mistake hiring managers make is trying to use a one size fits all hiring process—using the same assessments and process for each job. This type of thinking and process will almost always end in unhappy managers and employees within the new hires first 18 months. Before you can even begin to look for job candidates, you must define the job—what behaviors, knowledge, experience and personal attributes are needed to do the job? If you miss one of these four items you will probably misdiagnose, and miss the opportunity at identifying people that will succeed or fail as a restaurant employee.

The next step in defining job success is to determine what you are willing to sacrifice and how that sacrifice will affect your quality of hire. For example, am I willing to train or do I need people who already have the skills, experience, and knowledge to do the job? There will more than likely be some sacrifice needed or it could take you months to fill the position. Identifying those sacrifices the best you can up front will save you lots of time and money.

Selection System Integration ~

The second mistake many restaurant hiring managers make is failure to use and implement a proper selection system. A selection system consists of pre-employment testing, interviewing and on-boarding. Advancements have been made in pre-employment test/assessments and even application of job simulations to the hiring process. These tools are in the best interest of the candidate and the company and are great ways to provide a realistic preview of the job and to gather information in the context of the job, thus ensuring job compatibility. When preparing for the interview process, keep in mind that behavior based interviewing, which is asking candidates questions about their previous job experiences, is the most accurate way to interview.

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On-boarding once a candidate is hired includes orientation, training if applicable, development planning and mentoring. Implementing and adhering to a well designed selection system can make a major difference in a successful hire and your relationship with new employees. It also lends itself to assist you in identifying and resolving problems in your hiring process. Remember to always define success in the job properly & utilize the information found in the pre-employment assessments. I do want to point out that if you are using an RPO (Recruitment Process Outsourcing) company, you should maintain ongoing conversations about the assessments they are using and how those assessments are working in your hiring process. The best practice is to always provide the RPO recruiters and even your own hiring managers with the feedback you receive from new hires during the on-boarding process.

Crucial Questions ~

Once you begin using the selection system and seeing results, there are some crucial questions to ask to ensure sustainability of your selection system process. Are my assessments predicting success in the final interview and are they predicting win/win hiring decisions and predicting job performance & engagement? Does my final interview lead to acceptance at an acceptable rate? How do I compare to my competitors or a benchmark? And probably the most important question of all; how am I able to make predictions to increase talent in the future; given my business direction? Wow—that’s a lot of questions and seems a little overwhelming—so you may ask how to quantify this information. Well, the days of gathering information for a hire and after the hire is made just putting it in a file and forgetting about it is over; that information is very valuable and should be used to assess your hiring process and create a template for each job. Once you have hired someone for a position, you have started a job template to be used the next time the position or a similar position needs to be filled. This process of creating the template for the first time is not an overnight process and should take a minimum of 6 months to 1 year to complete.

The following list can be used as a road map to accomplish and gather information to create your job templates : 1) Candidate source is where you found the candidates or how they found you; 2) Assessment data is not only what assessments were used but how the candidates performed; 3) Once the final interviews are performed you should ask how satisfied your managers are with the quality of candidates; 4) You should track how often your job offers yield job acceptance; 5) During orientation, ask your new employee what they thought of the hiring process; 6) Follow-up interviews 6 months after the hire should be performed for the employee and mangers to determine how the hire is going and 7) One year after the hire you should review how the employee has performed and how they have engaged with your company as a whole. If, at this one year mark, you have happy employees & managers and enhanced productivity you can proudly say you have a “successful hire.”

Final Thoughts ~

Being open minded to change, combined with a little effort; can lead to avoidance of falling into the 50% of hires that don’t work category. But, more importantly, using the tools of defining your job, a selection system, and building job templates can save you money & time and leave you with happy restaurant employees which means enhanced restaurant operation productivity. And happier employees are less likely to decide they’ve chosen the wrong job. Remember, these steps work together, leaving one or more of them out will more than likely result in continued unsuccessful hires or create vulnerabilities in your hiring process. This is only a broad overview of these tools, so feel free to contact us for further information on how to begin implementing a successful hiring process for your restaurant.

The Deerfield Team
800.233.6428
j@deerfieldadvisors.com


DISCLAIMER

This article is intended only as a general discussion of these issues & we cannot guarantee the accuracy thereof, it does not purport to provide legal, accounting, or other professional advice. If such advice is needed, please consult with your attorney, accountant, or other qualified adviser. The Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Accordingly, the information provided herein is provided with the understanding that Deerfield Advisors is not engaged in rendering legal advice. Deerfield Advisors strongly advises that clients and/or the reader of this publication contact an attorney to obtain advice with respect to any particular issue or problem discussed here. Also, please know that discussions of insurance policy language is descriptive only. We strongly advise that one’s individual policy & ones advisor be consulted regarding this subject matter before any action is taken in any way. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. The Deerfield Advisor White Paper Series is a registered trademark of Deerfield Asset Management Inc. DBA, Deerfield Advisors and is produced by Deerfield Advisors for the benefit of its clients, and any other use is strictly prohibited. All rights reserved. Copyright © 2014.