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Why Favoritism is Hurting Your Small Business

favoritism

As much as we all know we shouldn’t, we do in fact, play favorites. The most experienced among us do not let it interfere with our work in a major way. But the reality is, deep down, there are those on our team we like better than others and if given the chance we will give preferential treatment. Even if that preferential treatment only amounts to the biggest slice on pizza Friday.

For others though, favoritism is a bigger problem. I find favoritism is more rampant in smaller businesses, especially family owned or where the CEO has called in long time friends to help build the business. I have even had CEO’s say to me that they will always give their sister/father/best friend from high school preferential treatment. They know it’s wrong, but they will do it anyway because it is their business and these are their friends and family.

And we should all take care of our friends and family right?

Even the most well intentioned CEO who hires her brother and has the “just because you are my brother doesn’t mean you are getting preferential treatment” talk can still fall trap to playing favorites. And it can negatively influence the business.

Here’s how.

It’s about the old adage of perception vs reality. I don’t buy into the premise that perception IS reality, but I do believe that a distorted perception can greatly affect reality (that makes sense right). The minute a family member is hired or a certain employee starts spending more time with the boss than the others, every other employees assumes they are getting preferential treatment. Even if they aren’t, the rest of the business assumes it is happening and starts looking for it. When you look for something hard enough, you can find it, even if it is solely perception based. Something from the bosses perspective that isn’t grounded in favoritism can be perceived that way from other employees.

Obviously this hurts morale and productivity. Why work as hard as Joe if he is going to get all the credit, good projects or higher pay anyway? One common perception that seems to rear it’s ugly head is that the favored employee never seems to work as hard, be as qualified or deserve the credit they are getting. Even if that isn’t true, the other employees always perceive that the favorite isn’t really that great and is only where they are because the boss prefers them over others.

For any company trying to build a culture of engagement, having the perception that certain employees are favored, will ensure they continually take one step forward and two steps back.

What’s even more interesting is the effect having a favored employee can have on employees at higher pay grades. If the favored employee is not a manager, other managers can feel awkward or intimidated by that person because they know the relationship gives that person a bit more power. This can become a very hard situation to navigate leading top level leaders who have been with the business from the beginning to think about finding success elsewhere.

The good thing is that these things don’t escalate to irreparable levels overnight. There are often warning signs that employees are disgruntled and believe an employee is receiving preferential treatment. I would encourage any leader to take these concerns seriously and not just brush them off because they don’t believe they are playing favorites. We often do it without realizing it until it is brought to our attention. Catching it early and modifying that behavior before it gets out of hand can save a leader a ton of headaches down the road.

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Conferences, Events and New Resources – Oh My!

Parker the dog

That’s Parker. I talked about him here just before my holiday break. In a few short months he has gone from 9 pounds to 30. He had just been groomed in this photo and was a bit mad at me. He wouldn’t look at me, but is still pretty cute, even when angry.

After my holiday break I have written five blog posts. Five. I wrote a minimum of three per week pretty consistently for the last several years, but so far in 2017 – five.

Because 2017 is kicking my butt…..in a very good way.

Business is good. Lots of new opportunities and new partnerships that are forcing me to shift priorities a bit. Unfortunately, those priorities have been mostly centered around this blog and responding to email (sorry if you are waiting on something from me).

But I’m working on adjusting to a new normal of business and maybe hiring some help. Until then, I thought I would share a few events I’ll be attending and/or speaking at as well as share a new resource for small business HR leaders I’m working on.

Ultimate Software Event:

First up is Ultimate Software’s Connections Conference. It will be held in Las Vegas, March 21st through the 24th. This is my first user conference with Ultimate and I’m excited to see what they have in store. More to come on that event very soon. Back To Table of Contents

DisruptHR Orange County:

Second is DisruptHR Orange County where I’ll be speaking on a yet to be determined topic (I told you I was behind). This will be my second time speaking in OC and I do love these events. Note: if you have any awesome topic ideas for a Disrupt talk that you aren’t going to use leave them in the comments below. I need some help brainstorming. Back To Table of Contents

DisruptHR Los Angeles:

Third will be another DisruptHR event, but this one in Los Angeles. Yes, Orange County and Los Angeles are two separate areas and people from one do not drive to the other. It was news to me when I moved here too. My amazing colleague and friend, James Kinney, is helping me plan another amazing event. (Do I say amazing too much?) Ok, let’s face it, he does all the work and I just hang out, but either way, awesome event! Registration is opening this week so if you are in LA and want to be in the know, join our mailing list. Back To Table of Contents

PIHRA South Orange County:

In May, I will be speaking at the PIHRA South Orange County meeting about Getting Head of the Recruiting Curve – Designing and Executing a Strategy that Consistently Provides Viable Candidates. This will be a condensed version of the workshop I did for ILSHRM last year. Back To Table of Contents

WorkHuman Event:

Right after the Memorial Day weekend I will be heading to my first ever WorkHuman Conference. I am so excited about this one. The buzz around these conferences for the last few years has been tremendous and I’m honored to be able to attend and share updates live from the event with all of you. If you are interested in attending, you can save $100 off registration by using this discount code – WH17INF-SBA Back To Table of Contents

SHRM17:

Finally, at least for the first half of the year, I will be attending the annual SHRM conference in June as part of their influencer team. This is my sixth year being a part of this team and it is something I look forward to all year. If you have not attended a SHRM annual conference in the past, and you have the budget to do so, it is worth it. Will I see you in New Orleans? Back To Table of Contents

So many HR events in the first six months I’m having a hard time keeping track. I’m going to be so much smarter come July.

Small Business HR Mastermind Groups:

In the midst of that, I am setting up something I have wanted to do for a while. My clients who do not outsource their HR to us, but use us for supplemental support are either HR practitioners working in an HR Department of One setting or non-HR professionals who are responsible for the HR function. Regardless of which category they fall into, they are alone with no one to bounce ideas off of (other than me) or ask about how certain things may be handled in other businesses.

This is also true of much of my blog subscriber base.

Because of that, I wanted to create a way for these individuals to connect on a regular basis and share ideas, best practices and even throw out the occasional rant to people who understand what they are going through. So I came up with the idea of a Small Business HR Mastermind Group. The group of 5-7 people will meet on a bi-monthly basis via phone for 90 minutes.

The rules are simple. Everyone in the group must be responsible for the HR function in a small business (250 employees or less). You don’t have to be a certified, card carrying HR professional. You can be the office manager responsible for HR. What you can’t be is a vendor. These groups will have only one vendor, and that’s me because it was my idea and my conference call line. I can assure you I won’t be selling anything, only facilitating. If it ever sounds like I’m selling, participants can call me on it. That isn’t what these groups are about.

If you have been looking for a way to get advice from other people in your shoes, this is it. If you are interested in joining a group, fill out this form and I will give you more info.

Back To Table of Contents

That’s what I have going on for the next few months in addition to every day work stuff. What about you? Anything you are especially looking forward too? Any chance we may cross paths at one of these events?

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Leading Through Uncertain Times

leading through trying times

Regardless what side of the aisle you find yourself on, I think we can all agree that the past few weeks since the inauguration have been tumultuous. No one can predict what happens next. This uncertainty has many people nervous about the future.

And that uncertainty is affecting my clients.

Several have experienced drops in business – especially those who sell products or services that could be put off for a few months. For some of these, this drop in business has necessitated layoffs they weren’t anticipating. Others, specifically my clients with government contracts, have put a hiring freeze in place. Hiring freeze’s that ensure current employees are going to be overworked in the coming weeks.

Frustration, angst and uncertainty abound and likely will for several more weeks….or longer.

One of my clients said to me that it must make for good business times for me – and while it does, this is never how I like to obtain clients – when they are in turmoil. One conversation I’ve had several times in the last few weeks centers around how to lead during these times. One client asked it this way:

“I want to be able to reassure my remaining employees that we are ok. I want to tell them that the business is going through a down season and that we will pull through in a few weeks, but the reality is I’m not sure of that. There is no rhyme or reason to what’s happening and I honestly don’t know what’s going to happen in the future or if the business will even be here next year. How do I lead through that?”

It’s a hard line to walk. As a leader you want to be encouraging and reassure your employees that whatever the business is experiencing today is a short term set back that will be overcome. You also want to be honest and the truth of the matter is, you aren’t sure if overcoming is reality. You don’t want to scare employees to the point that they all dust off their resumes, but you also don’t want to leave them without a job unexpectedly. You have no idea if your thoughts of gloom and doom are just dramatic over-reactions or warranted and certainly don’t want to pass that on to employees.

I think it’s important to realize during these times that employees are not stupid. They know what is going on. As someone who spends a good amount of time recruiting, I can tell you that I hear from candidates every day who say they are open to new opportunities because they can “see the writing on the wall” with their current company and feel like they will be out of a job soon anyway. Employees know when business is declining and if they don’t have good feelings about how that decline is being handled, they are likely to start shopping. So the first thing not to do is act like everything is fine.

Regardless of what you do or how you do it, there are going to be employees who jump ship. There are however, always going to be employees (if you’ve led them right) with some sense of loyalty. It’s these employees you want to focus on. Encourage questions and answer them as honestly as you can without jeopardizing the business or creating a frenzy. Share the state of the business and what actions are being taken to overcome. It’s ok for leaders to not have all the answers. These times are often times when showing a little vulnerability will go a long way with employees. They expect you to lead. They expect you to fight. They don’t expect you to have all the answers right away. They don’t expect you to not be worried.

So while there may not be a one size fits all answer to how to lead through this, the important thing is to find the balance between being honest and having a plan. Being proactive and not reactionary. Being strategic with all decisions and focusing on what matters most for the health of the organization.

In that respect, leading through uncertain times really isn’t that different from every day. It just comes with a little more stress.

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Leading Through Small Business Growing Pains

small business growing pains

Businesses usually become clients in one of two stages. Either they are in startup or the very early phase of just beginning to hire employees beyond the founder or they have just experienced a jump in headcount rapidly and are experiencing some growing pains. Inevitably, the leaders of the organization tell me how unique their situation is and wonder if I might be able to help them put, what I call, people structure, in place.

When this happens, I start with the good news first. “You are not a special snowflake. Your business doubling or even tripling headcount in a few months and the proverbial stuff hitting the fan as a result, is actually happening to more companies than you can imagine right now. And it happens to new ones every single day.” It’s called growing a small business and in my almost six years as a consultant, I can tell you that the majority of small businesses who grow quickly, go through it. Things get tough for a while, turnover may spike, employees who were content before change and more questions than answer fill the already strained atmosphere. It is an environment I have walked into many times.

The process through is easy enough in theory, but much harder in application. It often requires major change and tough decisions. It often requires the founder of the business letting go in a significant way, sometimes for the first time in the business’s history.

In the majority of cases the cause of growing pains is due to lack of leadership structure. At least a leadership structure that supports the new amount of employees. People have been promoted, hired and moved around and somehow in the course of all of that, no one knows who reports to who or who is responsible for what. In the spirit of “getting things done” structure was sacrificed for efficiency. While efficiency kept up with customer demand, structure was left in it’s wake leaving an organizational chart that looks more like a winding road sign.

The founder now finds himself in survival mode. He is trying ti grow the business but keep things the way they are. Because the way they are is magic. Magic that helped him build the business and magic he is not willing to let go of. Even if it no longer works. Even if it is creating chaos. Even if it is creating an unhealthy organization that while successful now, will soon plummet. Founders still want to have their hand in everything, but they ran out of hands 40 employees ago. They want to be involved in every decision, but they have stepped outside of their area of expertise too many times to count. They know they need to let go, but it doesn’t feel right so they hold on, sometimes tightly, to as much as possible.

It is at this point that I encourage founders to get out of the business. That isn’t to say leave the company, but simply determine the area of their greatest strength, focus there and let the other leaders in place manage the day to day. It is astounding to me how many founders of extremely successful businesses say that they have no business managing people….and yet they are. It is likely that sales, business strategy, marketing or finance is the strong suit of the founder. Whatever that is, when the company starts going through growing pains, it may be time for them to focus there and let the leaders they have hired focus on the day to day.

During times of business growing pains, the founder may need to take a step back #smallbizhr Click To Tweet

It may sound incredible, but the reality I have watched play out more times than I can count, is that the minute the founder steps back and focuses on his strengths, some pains are immediately alleviated. There is just something about the big boss settling down that changes a tone.

After that, it is imperative that the next level of leaders determine the structure for the rest of the business. Where are the reporting lines drawn? Who reports to who and what department is responsible for what? Even if some structure was already in place, I encourage leaders to start from scratch. Take a look at all current department heads and ask if it makes sense that they continue doing what they are doing. Then that question should be asked of each employee. You are already in a bit of a painful time, if major changes are going to happen, it won’t hurt much to do it now. Better than stabilizing everyone only to shake them up again later.

Once the structure is decided upon and communicated to employees, quite possibly the most crucial part of all of this is to consistently follow it. Leaders jumping rank and communicating down the line while leaving out an important supervisor will only toss everyone back into chaos. Expectations must be set and people must be held accountable and then everyone, absolutely everyone, has to be consistent.

Once a leadership structure is determined, it is important to respect it.....consistently. Click To Tweet

Once these two things have been fleshed out, this is the perfect time to establish core values and behavioral expectations if those haven’t been previously established. I’ve talked before about leadership resets and working through these growing pains are excellent times to embrace a reset.

One final thing that is important to note about growing pains. Not everyone will make it through….and that’s alright. Even if it is someone who was an integral part of getting the business to were it is, it is ok if they don’t make it through. This is almost like a fresh start. A time to regroup and make changes that are necessary. Not everyone is going to like those changes, but if they are the right thing to do, the business must forge ahead without them.

The good news is that growing pains are common and survivable. The better news is that once the business has gone through their first one, the following ones will be much easier. The bad news, as you can guess, is that the first is not the last and growing pains, as in life, will always be a part of business.

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Should You Buy or Build Small Business Leaders?

should you buy or build small business leaders

I love this question. I love philosophizing about these things. Playing out the “on the one hand” scenario. I’m one of those weirdos who enjoys playing out possible scenarios in an effort to figure out which might work out the best. Because with this question as with many others the answer is a frustrating one.

It depends.

This is definitely not a question where one size fits all. What is right for one business may be the worst answer possible for another. Possibly, the most accurate answer that would fit most businesses is that you should mix it up – buy (hire from the outside) some leaders while building (train from the inside) others.

Let’s look at why.

Depending on the stage of the business, leaders hired from the outside may bring much needed and immediate expertise. When a business is in desperate need of marketing or sales for example, they may not have time to groom someone from the inside. Further, experience at other companies and environments proves extremely helpful in a small business or startup environment. Even if the CEO had the time to build leaders from the current staff, if they have only experienced this environment, they may be missing valuable expertise that someone from the outside could bring.

On the other hand….

Nothing says we care about the future of our employees like internal promotions and leadership development programs. The number one complaint from small business employees is lack of advancement opportunities. Any small business who figures out how to offer that is light years ahead of their competitors. Mark my words on that.

What’s more, training existing employees for advancement opportunities eliminates the cultural learning curve. They already understand the business, how things operate and may have even been involved in much of the growth. There will be no time spent getting them up to speed on how thing work. Even showing someone where the bathroom is takes time and existing employees do not need that training.

Growing from within also creates extreme loyalty not found in outside candidates – at least initially. Those employees who have been groomed to take on more responsibility are more likely to stay with the business and not look for those opportunities elsewhere.

When this question is asked of me, I always prefer building over buying if the business has the ability to do so. I think it offers more benefits than hiring from the outside both in the short term and long term.

What do you think? Have you made building talent a priority in your small business or do you find that buying the talent you need for leadership roles is better? I would love to hear about your experience.

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Three Things Leaders Can Always Do More

three things leaders should do more of

There are things in this world we can never do enough. Things we can always do more of and still reap the benefits. Exercise. Reading. Eating chocolate.

Ok maybe there is a limit on that last one, but there shouldn’t be.

As leaders, there are a few things we can always do more. Before you read this list I can tell you right now, not one of them are revolutionary. Not one will surprise you or be something you’ve never thought of before. Yet, these small things are often the ones we forget to do the most.

They are easy, and yet forgotten.

We don’t always need revolutionary. Sometimes we just need reminders.

Ask More Questions:
In the case of leadership, curiosity does not kill the cat and ignorance is not bliss. Leaders should constantly be asking questions. Questions around the work being done, the way it’s done, how it could be done better, ideas, opinions, concerns. Leaders should question deeply held traditions, cultural norms and accepted behaviors. The good, the bad and the downright ugly should constantly be questioned to see what could be improved. One more cliche that leadership debunks: if it ain’t broke, don’t fix it. Just because something is working in the workplace, doesn’t mean it’s working as efficiently as it could be.

Listen More:
Towards the end of the year I had a sit down with a CEO and one of his most valuable leader. This leader was on the verge of leaving as the two had been butting heads for a few months. The CEO asked me to sit in and be a moderator for the two of them. Before we walked into the meeting he said, “I’ve been thinking a lot about this meeting and I know that one of the things I need to do better is listen. I’m not a good listener. Every time you think I’m not listening can you remind me?”

So I did. Every time I thought he wasn’t paying attention and was only listening to respond rather than really understand, I tapped my ear. There were several points that the leader had been trying to make for months that the CEO admittedly only listened to for the first time that day and it changed the entire conversation.

We could all do a better job of listening to understand rather than respond. That is something there will never be enough of.

Praise in Public:
My first client of the new year is struggling with behaviors that she doesn’t want in her workplace and looking for ways to reinforce behaviors that she does want. We are looking at both her performance management structure and her recognition program, but the simplest thing for her to do to reinforce positive behaviors is praise in public.

In one of our early meetings we have listed the behaviors that she feels like are done some of the time, but she would like to see become part of the every day culture. While we will ingrain those behaviors into every training, performance discussion and rewards and recognition program we implement this year, I told her the easiest way for her to reinforce those behaviors is to praise them publicly every single time she can. Whenever an employee does something that she wants to reinforce, doing so publicly will do it faster than anything else. It doesn’t have to be a big production with cake and balloons, just a simple thank you in front of others can do the trick. The point is to make sure that employees hear what behaviors get praises from the boss.

All simple things. Easy things. Things we can always do more of and yet often forget to do at all….or at least forget to do well. Which of these could you do more of?

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One Word for 2017: Easy

make it easy

Happy New Year! I hope you had a relaxing and fulfilling holiday season. Along with the majority of people, we are back to work today and ready to focus on what new things we can do in 2017. I’ve never been one for resolutions or goals. I am the kind of person who jumps and figures things out on the way down. That has served me well to this point, but I felt like this year I needed a bit more focus.

This business is growing. It is at the point of being overwhelming which is, at the same time, a thrilling and exhausting place to be. As I move from being a ad hoc consultant to owning a legitimate firm, I find myself needing to be more deliberate about purpose. I help companies all the time figure out their vision and values. I help small businesses determine what their driving focus is that is going to help them recruit and train. And yet I have never really done that for my own business.

Until now.

I wanted a word that drove every decision. For every new offering rolled out this year through this consulting firm, I wanted one word that focused the way we shaped that service. As I’ve spent the last few weeks thinking about what it is that small businesses need in the form of HR services, one word kept popping up in my mind.

Easy.

They need it to be easy. Many of them are trying to keep their head above water. They are working on securing funding or finally turning a profit. They are trying to figure out how to hire the talent that they need to grow the business without taking the business under in the process. They are all wearing many hats and need to focus on their core product or service and need all ancillary functions to be….easy.

In the past, they have focused simply on compliance. They ensure they are legally doing what they have to do and little else. Things like leadership development, employee training, robust onboarding and focuses on culture was not something they felt like they had time or budgets for. All of these things were too complicated for businesses who either didn’t have an HR person or only had one person doing it all.

Our goal this year as a business is to change that. I still firmly believe that small businesses can do anything big businesses can do if they only know how to scale it down to their resources and budget.

We can help them do that, but it has to be easy.

I’m excited to run with all of the things I have planned for this year. There is so much more to come and I hope you’ll share any thoughts and ideas you have as well about how we can make small business HR easier.

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New Puppy and a Holiday Break

New Puppy

On December 10th we surprised our nearly seven year old son with his very first puppy. He had no idea it was coming and was so happy he cried when he found out. It is a moment my husband and I will never forget. That day we drove to the breeders and brought Parker the labradoodle home. Since that time he and B have been inseparable. B gets upset when he has to leave him for school and makes me promise that I’m going to take good care of him. Seriously, how cute are those two?

Needless to say our family is hopelessly in love with him.

But with a new puppy comes a lot of work. A new puppy during the holidays with family visiting and a trip to Chicago sprinkled in means an extra amount of work and business that means I will almost need a vacation the first week of January.

I’m sure many of you can relate.

With that said, the blog will be taking a break over the next two weeks and will be back on January 3rd with our regularly scheduled programming. This year has been amazing. It has been the most successful year yet of the business. I could not be more thankful for my clients, readers and subscribers who made that happen.

I have tons of ideas for 2017 and can’t wait to start sharing them will you all.

I hope you have a wonderful holiday season and I will see you in the New Year!

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Preparing for California Minimum Wage Increases in 2017 and Beyond

minimum wage increase

Every time I log into one of my client’s payroll systems over the past couple of weeks I receive a pop up reminder about the minimum wage hike happening in 2017. In California, the minimum wage rises to $10.50 in January of 2017 and will increase incrementally through 2022 where it will be $15 per hour.

Being a resident of California, I can tell you that it is shocking to think that even with the increase in minimum wage, those living on that amount are still struggling. Even if you think you understand how expensive it is to live here, you don’t until you actually do it. My husband and I are still in sticker shock and neither of us are relying on minimum wage to pay our bills.

At the same time, as a business owner, I know how an increase in minimum wage impacts employers. Many of my clients and I have been talking about the impact of a minimum wage increase on their business and while none of them were forced to make immediate changes because they are paying well above minimum wage now, we will be embarking on compensation studies in 2017 to determine how they stay ahead of the curve and minimize future costs as the wage increases.

It’s a tough balance. I don’t think anyone doubts that on an individual or personal level the wage increase is needed, but for many businesses that rely heavily on hourly workers, the impact is great. A friend of mine works for a small retailer of 15 employees all who make minimum wage. This increase will cost her an additional $15,000+ in 2017 if she wants to keep her entire workforce working full time. That increase will only rise year after year.

All businesses have to decide how they are going to deal with the increase. Will they decrease staff, increase prices, outsource or move more of their operation online? In 2014, Intuit wrote this article which I think outlines great steps a business can go through to figure out how to deal with the increase. The steps are still very applicable today.

The point is to get ahead of it. Businesses who wait until their first payroll in 2017 are likely going to eat some extra costs or kill morale by terminating suddenly. Don’t put off thinking about how this is going to be handled or communicating to staff.

And don’t just focus on 2017. Remember that there are more scheduled increases so thinking about how you are going to get ahead of that curve now will put you in a far better place when the change takes place.

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Deductive Reasoning: The Skill to Always Look For in the Hiring Process

deductive reasoning skills

I will admit before I even get into this post that my stance on this may have something to do with lack of deductive reasoning skills being a huge pet peeve of mine. When someone asks me a question that is glaringly obvious if they just looked around or thought it through, I want to poke their eyes right out.

No really. I have an almost violent reaction.

Example A: “I’m going to be sick today and stay home, but I know the Holiday party is also today. Does that mean I will miss it?”

Let’s think this through. If you are not coming into work and the Holiday party is being held at work then yes, yes you will miss it.

Example B: “Wow the grass is wet. Think it rained?”

Nope. The grass is crying.

Whenever someone fails to use deductive reasoning it makes me think of Bill Engvall and “Here’s Your Sign“. I don’t necessarily think it is that people are stupid, I just think they are lazy. It’s easier to ask a question quickly than take the time to think something through. We are lazy with our words and we are definitely lazy in our thinking.

I blame Google.

Here’s why I don’t think I’m alone in this thinking however. Nearly all of my clients tell me that one of the skills they need most in candidates is critical thinking. The ability to think things through. The ability to think beyond this present moment. The ability to realize, on your own, that if the grass is wet and there aren’t sprinklers present, it probably rained.

You often hear to hire for attitude and train the rest and I do think their is merit to that. But if I were going to hire for one thing over skillset it would be thinking skills: critical thinking skills, deductive reasoning and the ability to think things through and ask the right questions.

What do you think? Are deductive reasoning skills a must have requirement for you or is there something else you look for in every candidate?

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