Managing Employees
“Remember that how you
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BY HARLAN M. SCHAFIR
CHIEF VISIONARY OFFICER, EXACTHIRE
AS BUSINESS OWNERS, we all worry about having enough capital
to run our businesses. Most of us immediately think of financial capital.
Without cash, we are out of business. However, I suggest that the most
important capital we contend with is the human capital of business.
Why is that? Human capital is clearly the most complicated business
component to find and manage. In fact, once our companies grow and
we solve the cash situation, the people factor remains. Furthermore,
it’s the human capital part of our businesses which interacts with our
customers on a daily basis. What is more important than that?
In his book “Good to Great,” Jim Collins stated that companies that
have the best culture and most engaged employees have the highest
market value. These factors almost always result in higher profits and
fewer headaches in running our businesses.
I have always believed the following when it comes to running
companies:
If I want higher sales and profits, what is needed to differentiate my
company from my competitors is unforgettable customer service — the type
that customers talk about and benchmark their other vendors against. This
type of service is delivered by engaged employees. Remember that how you
treat employees is how they will treat your customers. It is a simple rule
that works. Therefore, you need to make sure these employees fit both the
job and culture of your company. Most of us do not spend enough time in
this area. This should happen during the hiring cycle.
12 | INBIZ MAGAZINE | OCTOBER 2008
treat employees is how they
will treat your customers.”
The reason we must focus more time on the hiring cycle is that it is
nearly impossible to force or train someone to fit your culture or your job
after you hire them. They are either a good match or not. Simply stated,
if they are not a good match, no amount of training or intervention will
make it work.
Hiring the right employees is a very fundamental skill, yet most
companies are pitiful when it comes to the amount of time they spend in
the interviewing and selection process. The basic screening, selection and
hiring process has been unchanged for decades. While all of us have heard
this complaint, what have you done in your own organization to change it?
Let’s look at hiring from a fresh perspective. The process is, at best,
complicated. In fact, the most extensive time we spend with candidates
is during the actual job interview; which is usually of short duration.
I compare the interview to dating. In an hour or so of interviewing
(dating), you are going to determine if you want to hire (marry) the
applicant. Does this make any sense? I don’t think it does.
In fact, I think we should change the process to get much more
information earlier in the process. This enables employers to really
understand who they are talking to and highlight areas of focus.
To properly manage human capital, employers need to truly evaluate
their hiring and retention systems by considering the following:
Decide what characteristics your top performers have and use
those in search of your next top performers. Most CEOs don’t
understand what makes a top performer so good. But this knowledge is
crucial if you want to replicate that success.
Your top performers are successful. But their success is because their
innate characteristics match your job and company culture, which
generates the outcomes you see. To reproduce your top performer’s
success, you need to hire other applicants based on job and culture fit
and not just skills.
Identify the kind of culture you have developed for your
company. Understand it well enough that you can explain it to others.
Whether you have defined your culture or not, understand that all
companies have a culture. Your employees know it and you had better
understand it as well. You need to hire employees that fit your culture,
not just those who have the right skill set.
Make the process of hiring efficient. Change your application
process by developing an online portal. Ask open-ended questions which
give you more knowledge about the candidates earlier in the process.
This method will result in more information than a standard resume
can provide.
Use a validated employee assessment product that helps
you understand your candidates and compares them to the
characteristics of your top performers. A qualified assessment will
provide normative data on your candidate and ask legal interview
questions. Utilize all this information to make your interview a much
more powerful and beneficial event. The time spent in the interview will
now be much more effective.
 Make your on-boarding process of new
employees unique. Your goal should be to
have new employees go home at the end of their
first day and tell those closest to them that their
first day with your company was the best first
day they ever had. Explore how to make your
employees feel this way, then follow through.
Develop and use a company mentoring
process. Use an intensive mentoring process
to make sure your new employee is immersed
in your company as efficiently as possible. This
is especially important when you consider
the generational diversity we are all facing in
the workplace and the timeline that younger
employees use to judge whether they have
made the right decision.
Clearly communicate employee career
path options. To keep employees — and keep
them satisfied — you have to clearly provide them
with career path options and be clear as to the
expectations you have for them to be considered
for other assignments and advancements.
Involve employees in decision-making
and communicate openly with them. The
more knowledge employees have, the more
they can offer your company. The more they
feel part of the company and the process, the
better the results they’ll produce.
Warehouse your candidate data and
new employee information. Use a secure
Web site to house and access your data. This
will enable you to develop analytics, feedback
loops and meaningful metrics. Then evaluate
your processes for higher performance payback.
This will help as you search for new candidates
as well as manage those you have hired. This
information can also be used to show candidates
that you understand how to manage the human
capital component of your business.

I do not have to tell you that the competition

for top talent is getting more intense. Furthermore,
we all are noticing that the younger generations
entering the workforce are not as patient as the
retiring baby boomers. As business owners, we do
not have as long to “get it right.” The generation X
and Y employees are quicker to judge and to correct
a decision they feel is not a good fit for them.
By implementing these processes, you can
leapfrog your company right over best practices
to next practices. You will improve how your
organization hires and how it develops human
capital; the capital that delivers the world-class
customer service that truly differentiates your
company from the rest.
As I always say: “It’s all about people.”

OCTOBER 2008 | INBIZ MAGAZINE | 13

Contributors
1 2 3 4
> 1. T.J. Becker
Marketing/Communications Manager, Edward Lowe Foundation
Becker is the marketing communications manager at the Edward Lowe Foundation, a
nonprofit organization that supports entrepreneurship through research, recognition
and educational programs with a focus on second-stage companies. Prior to joining the
foundation, Becker worked for Georgia Tech’s Research News and Publications Office.
She also has been a staff writer at the Chicago Tribune and Midwest bureau chief for
Women’s Wear Daily. SEE PAGE 17
> 2. Christopher Carmen
President and Founder, Carmen Commercial Real Estate Services
Carmen began his commercial real estate career in 1985 with Duke Realty Corp. While
at Duke, Carmen’s responsibilities included office and industrial property leasing,
and he eventually served as vice president of Duke Realty’s Indiana Office Group. In
1993, Carmen founded Carmen Commercial Real Estate Services to fill a void in the
Indianapolis marketplace by creating a “client centric” business model that exclusively
specializes in representing the interests of tenants and buyers of commercial property.
Since 1993, CARMEN has established itself as one of Indiana’s most prolific brokerage
firms and has represented more than 600 businesses and has expanded its capabilities
by developing strategic partnerships with some of the industry’s best providers of design,
office relocation project management, lease management and auditing, and state and
local government incentive procurement. Carmen also has authored two books on the
subject of facility relocation and commercial lease negotiation. SEE PAGE 43
> 3. Ron Ernst
President, Leadership Horizons
Ernst is an executive development consultant, seminar leader, author, and speaker based
in Indianapolis. He has coached first, second and third generation executives in a variety
of firms and guided entrepreneurs through various stages of growth. The executive
development workshops based on his book “RealTime Coaching” have been attended
by more than 3,500 managers. His newly released book “The Conscious Entrepreneur”
is the basis for his article. He has appeared as a guest on radio programs across the
nation and has made more than 20 keynote speeches. His work has been profiled in such
publications as CFO, Nation’s Business, The Indianapolis Star, The Arizona Republic,
Entrepreneur Magazine, Indianapolis Business Journal, Indianapolis Monthly and
Indianapolis CEO. Currently, Ernst is president and founder of Leadership Horizons, an
executive development consulting company founded in 1983.. SEE PAGE 50
> 4. Harlan Schafir
Chief Visionary Officer, ExactHire
Schafir is currently the chief visionary officer for ExactHire, which has developed an
exciting new process for hiring that focuses on JobFit and the gaining of additional
knowledge of candidates before they are hired. This process improves the quality of
an organization’s new hires, saves time, and increases profitability. It truly is a next
practice in the hiring space. Schafir has over 33 years of human resource and business
management experience with 15+ years of experience in the PEO industry. In 1991, he
founded Professional Staff Management, one of the first PEOs in Indiana. Under his
leadership, Professional Staff Management experienced double-digit annual growth and
was sold to Fortune Industries, where he was the COO until 2006. Schafir graduated
from the University of South Florida, working first for Arthur Andersen & Co. He then
accepted a position with Cooper Industries and later transferred to Cooper’s Belden
Electronic Wire & Cable division in Indiana. While at Belden, his units were considered
some of the most profitable and productive in the company. Schafir has always embraced
the philosophy that serving and protecting the interests of clients is the most important
undertaking of the company. SEE PAGE 12
8 | INBIZ MAGAZINE | OCTOBER 2008
5 6 7
> 5. Elizabeth Stahl
President, E.J. Stahl & Associates
Stahl has more than 20 years of business management and human resource experience
in a variety of industries from information technology and health care to retail and
not-for-profit. Her expertise has been recognized with awards for program development,
outstanding HR management and leadership. With experience working for both large
and small businesses, Stahl’s approach lies in creating and implementing strategic
solutions for various levels of organizational talent. Stahl has a Master’s in Business
Administration and has held the Senior Professional in Human Resources certification
since 1998. She is also the co-founder and former president of the Human Resources
Development Association and is a featured speaker for many local organizations on
topics related to strategic business solutions. SEE PAGE 10
> 6. Chuck Surack
Founder and President, Sweetwater Sound Inc.
Surack began his career as a professional saxophonist and keyboard player in touring
bands. In 1979 he founded Sweetwater Sound as a 4-track recording studio in the back
of his VW bus. The retail division of Sweetwater was born out of his frustration trying
to find an honest, knowledgeable music store to help him with his pursuit of the newest
and most technologically driven equipment for the stage and studio. Today, through
uncompromising customer service, equipment knowledge and after the sale support,
Sweetwater has become one of the most respected music retailers in the world. With
more than 350 employees, Sweetwater recently completed its new $35 million state-of-
the-art campus at the intersection of Kroemer Road and U.S. Highway 30 in Fort Wayne,
and serves hundreds of thousands of musicians, recording engineers, producers, and
studios across the country. Sweetwater Productions, the company’s recording studio
division, remains a large part of Sweetwater’s success. SEE PAGE 46
> 7. Jeff Warren
Partner, Bowditch and Dewey; Partner, Eaglestone Investment Partners
Warren has a wide range of experience as a business lawyer and venture capital
investor. Warren has dedicated his career to the planning and execution of mergers
and acquisitions, venture capital and corporate finance transactions, as well as
business and strategic planning and compliance. He joined Bowditch and Dewey in
Boston as a partner after several years as co-managing partner and general counsel
of Eaglestone Investment Partners, an institutionally financed, bi-coastal venture
capital firm. He is an innovative, disciplined problem solver with a proven ability to
structure, plan, manage and execute complex transactions. As a venture capitalist,
he has overseen change management in a variety of environments and led teams
from initial planning and business modeling through serial rounds of financing,
restructured businesses and overseen exits. Warren serves on the board of several
private companies and nonprofit organizations, frequently as the chairman, and, while
a partner at Eaglestone, also served as interim CEO of both a water treatment company
and a software business. SEE PAGE 14