Management Challenges and Symptoms
- New Horizons in Management series
Edited by Janice Langan-Fox, Cary L. Cooper and Richard J. Klimoski
Chapter 22: Avoiding Entrepreneurial Frustration: Building a Management Team
Robert D. Hisrich and Julie Lutz Introduction In order to successfully launch and grow a new venture, the entrepreneur must build a strong management team with the necessary talent. Such a management team establishes, through its abilities and connections, the much-needed credibility that allows the venture to obtain the necessary resources (particularly ﬁnancial support). While the decision to hire a new employee is an important one for every business, its impact is even more signiﬁcant for an entrepreneurial company. Every new addition to the management team helps determine the ability of the venture to launch and grow. Bad hires are expensive, and no organization, especially a small entrepreneurial one, can aﬀord too many of them. It is thought that an employee hired in a typical entry-level position who quits after three months costs a company about $9,000 in salary, beneﬁts, and training. In addition, the intangible costs – time invested in hiring and developing the new employee, lost opportunities, reduced morale among co-workers, and business setbacks – are seven times this cost, making the total cost for this bad hire about $72,000. For many companies, attracting and retaining qualiﬁed employees remains a challenge, but the problem is especially acute among rapidly growing small businesses. A comprehensive study of companies’ hiring practices conducted by Staﬃng.org indicates that: ● ● ● ● Staﬃng costs are rising overall, despite increased use of the Internet. New-hire quality is the top staﬃng priority for 70 percent of the companies surveyed. Most companies...
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