Human Resource Analyst

In 1988, J. Mark Erler and his wife, Linda, opened an industrial painting and finishing service in North Vernon, Ind. The company, Erler Industries, grew steadily but not spectacularly until 1992, when the Erlers were chosen to fill a large contract with Dell Computer Corp. After working with only a half-dozen employees, they had to hire 175 people in almost no time to do entry-level work. "We were so desperate for employees," Linda Erler recalls, that "if we could see the whites of your eyes and it looked as if blood was running through your veins," you were offered a job. (Bundy, 1997)

The couple ran a coupon in the local newspaper, offering $50 to anyone who was hired, and they met their staffing goal with the coupon's help. The Erlers had to hire so rapidly that they couldn't check references. "It was very risky," she says, and sometimes the potential risks materialized, as with the group of new hires who came to work one night with 'whiskey in their soda cans." (Bundy, 1997)

Things finally settled down at Erler Industries. After that long trial-and-error period, '"we came out with some excellent people," Erler says. What the Erlers went through was like a fast-forward version of the growing pains experienced by many small firms: strong growth, a frustrating search for good employees, and, finally, after a lot of turn-over--and assuming the business was lucky enough to survive and learn from its hiring mistakes--a work force that is both productive and reasonably stable.

Other firms, especially fast-food restaurants, must simply learn to live with heavy turnover, by making constant hiring part of the normal routine. "We are always looking for people," says Glover, because so many of his 150 or so employees are high-school or college students, working part time, and turnover is high--150 to 175 percent a year, he estimates. He hopes his student employees will stay with the company for two or three years, but it's usually less than that. "It's an ongoing challenge to find people who are committed to work and care about the job," he says. (Bundy, 1997) The challenge is even greater now, he believes, than when he opened his first store because potential employees' attitudes toward work have deteriorated over the years.

Even though Glover and his managers search for people with the fight attitude--in particular, they ask good employees to encourage their friends to apply--they also have to deal with the compelling need to fill vacant slots. "Sometimes," he says, We have to hire people, knowing full well they aren't going to work out for the long term." The typical small business never has to deal with the explosive growth that Erler Industries experienced or the constant turnover at SSJC. But filling jobs with the right people is no less a struggle--and the damage done by a single hiring mistake can be severe.

Failures in hiring and the resulting turnover cost business untold amounts of money. It costs to advertise for workers; it costs ...