June 2011 Newsletter – Hiring: A Checklist
Posted on: Monday, June 13th, 2011
Investing in human capital is a critical component to building a successful hedge fund. If you hire the wrong person, the fund can easily end up spending three times the new hire’s annual salary, after factoring in expenses for recruiting, media exposure, training, termination and re-recruiting. Additionally, there are the "hidden" opportunity costs, including missed growth opportunities, loss of intellectual property, missing out on other qualified candidates and the negative effects that hiring and dismissing someone has on your team.
Everyone is a stakeholder in the hiring process, which is why it’s so important to succeed. As Warren Buffett summed up the hiring challenge, "In looking for people to hire, you should look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you."
Wise words from the legendary investor. But how do you meet that challenge? To help ensure that you bring the righ
Pre-Recruiting Process
- Define the role, communicate with the stakeholders and put together a formal job description.
- Identify who will manage the recruiting process and who will interview the candidates.
- Set a timetable for the process. Map it out; identify sources for candidates, including recruiters, personal and professional networks and online job sites.
Recruiting Process
- Select a manageable number of candidates based on your needs and requirements.
- Identify any obstacles, such as deferred compensation, bonuses, non-compete agreements, garden leave or visa status that may disrupt the process.
- Interview the prospects to determine functional fit and to identify their strengths and weaknesses. Measure their emotional intelligence—how will they fit in culturally and philosophically?
- Confirm they can meet the short and long-term objectives of the role and can grow with the fund.
- Rank the candidates and communicate interest.
Post-Recruiting Process
- Communicate with all candidates. Manage candidate expectations in terms of compensation, timing and process.
- Begin your pre-employment screening process by conducting detailed reference and background checks.
- Put forth your strongest offer to your candidate highlighting compensation, reporting structure and benefits. Make sure the candidate understands your need for a timely response to your offer.
In today’s market, candidates have options. Competition for top talent among hedge funds has heated up. Chances are good that your top choice will be weighing more than one offer. You can tip those odds in your favor with a well-designed, well-executed hiring strategy.