Self Storage University Podcast: Episode 25

The Basics of Hiring And Firing Employees

It’s hard to operate a storage facility without someone being in charge. Sometimes it’s the owner, but more often it’s an employee. And with hiring people comes many important responsibilities. In this Self-Storage University podcast we’re going to review the basics of hiring and firing facility managers. It’s a complicated and litigious world out there and you have to make sure you have a plan before you put out the “help wanted” signs.

Episode 25: The Basics of Hiring And Firing Employees Transcript

Other than your selection of a property, there are a few things that you'll do, a few decisions you'll make, that will have a greater impact on your investment return than hiring an employee. Now, hiring an employee can be a very stressful thing because comingling with hiring also comes managing them, and ultimately potentially firing them. This is Frank Rolfe, the Self Storage University Podcast. We're going to be talking all about some tips on hiring and firing employees for your self storage facility.

Let's start off with one of the big most essential items: you have to know the law. You see, there's probably more liability in today's world with employees than there are with customers. If you talk to a lot of insurance agents, you'll soon hear many of their worst stories of recent litigation comes from employees who sue the owner of the facility. Right off the bat, you have to know everything about what you can and cannot do with an employee, such issues as minimum wage and overtime. All of these come into play when you try to navigate having any kind of legal problem with an employee. So make sure you know all of the laws.

Next on hiring, always make sure you hold out for just the right candidate. Some people move too quickly, they're too sloppy. They go ahead and hire the first one who basically applies, or maybe after five interviews they decide to just go with the last person because they don't want to bear to do it again. Never forget that when you hire someone you will have to ultimately potentially fire them. That's very, very unpleasant and you want to do as little of that as you can in your lifetime. So make sure you hold out with someone who you think really has a good chance for success. Don't just take someone out of laziness or fatigue. Make sure you think they truly are the right candidate.

We have found our best managers come from having high energy. It's the one quality you can't train. Warren Buffet once said, "Without energy, you have nothing," and it's true. You've got to have people on your team that care and want to work, have a strong work ethic. Make sure that the candidate you're looking at you sense has lots of energy. If they don't, if they're just trying to get a paycheck and don't really care what happens, probably will not work out very well.

Also make sure if you can, in your state with the law, to use a probationary contract of employment. This allows you to give some time to see how they actually perform before you're bound under a full employment agreement. Check out your state's ability to put someone on a probationary agreement. Maybe they work for you for 30 days or some period of time, where it's much easier to fire them if things don't work out. That's true for both parties, because possibly they won't enjoy the job either.

Make sure that whoever you hire that you adequately train them. You can't just throw someone into that facility and say, "Okay. Now you're the manager. Do great things. Make everything successful." People have absolutely no idea of what they're supposed to do, so show them how each system works. Show them how your collection systems work, how your sales system works, what you want them to do to proactively watch over any kind of problems that need to be maintained or fixed. Often when a manager does not work out, the true problem is that the owner did not train them effectively in what the job even was. Also explain to them how they are going to be judged. It's cruel to put someone into a job without telling them what's important and what is not. If you're going to go through the trouble of hiring that manager, make sure that you also along with that tell them what's important to you, what are the key items, what are the profit drivers of the business, and then how they will be judged on those.

Also make sure that you communicate their performance to them continuously. Some people make a huge error here. They feel kind of self conscious or shy about saying anything negative to the employee, so they try to make out that everything the employee does is correct and that's not going to work for you. It doesn't work if you tell someone they're doing a great job when they truly are not. It's okay to tell people there are problems. It's okay to want to do better. So feel free to communicate those factors to your employee. Be honest with them. Don't hold back. At the same time, though, don't be mean and cruel. Again, know your labor laws, how to talk to people. Remember that what you're trying to do is you're trying to, as a team, succeed. This is a team member. So when you give them criticism, make sure it's constructive criticism. Don't berate them. Instead, tell them what you think would have been a better path and urge them to try that path the next time.

Also, because at some point if their performance does not work out, you'll have to then unfortunately replace them. Understand all of your local prevalent laws regarding firing an employee. In some states, you may have to give them plenty of due notice that you don't like the way their job is going, perhaps through a performance incentive plan or something that A, shows that you're unhappy, and then B explains to them what a good job would look like. But make sure whatever the rules are in your state that you follow them to the letter because it is very, very important. You don't want to get crosswise with any labor law in today's America.

Now let me tell you some stories of great managers that we've had, because we've had many. We've had managers who have gone in there and they've taken property that was not performing and they have turned right around and suddenly made that one that's right on budget. What do they do to do that? What are the attributes of those really, really great managers? Well, energy like we already talked about. Also kind of thinking like you do. When you hire that manager you never know where life will go. It's possible that manager at some point might even end up your partner for all you know. If they're outstanding in what they do and you want to grow the business, they may move up the ranks.

So the really great employees you get have the potential to be far more than just the manager of that storage facility. They might grow with the job to be a district manager or regional manager, maybe an operating partner. So when you're choosing people, the really great people, you're going to spot them out of the crowd. When you find someone you think is perfect for that job, I don't mean just kind of okay, adequate, average, I'm talking superlative, make sure you get them on the team. Even if you have to pay up a little to get that person, it'll be worthwhile to you. So every time you hire someone, seek out candidates who you believe truly can perform at a very high level.

Remember, that in employees and success is all about the results. They don't have to be similar to you in any other regard, just from a business perspective that they understand the drivers and they want to follow those. They want to make money. They want the customers to be happy. They want the facility to be the best it can be. So watch when people have unusual levels of energy. Unusual levels of vision is very, very similar to your own because those are the characteristics that will make you successful. Their success is your success.

Looking back on some of the best people we've ever had, one thing I would say if you looked at them is they're not all the same. They don't physically look the same, they don't have similar backgrounds, but they all had one thing in common: that thing was the energy to have a superlative performance. These are people that when you talk to them they immediately start telling you with simplicity and with 100% clarity exactly what's going on with the business, with hat's going right, what's going wrong. A big part of that is just raw honesty. To me, it's very much easier to manage an employee who tells me the truth about what's going on than someone that hides from the truth. I don't want someone who is a "yes man" who says, "Yeah, well things are kind of going." I want someone who tells me these are our problems, bam, bam, bam. These are the solutions, bam, bam, bam. Someone who is telling me how that business works. When you find that kind of a person, a person who has that kind of clarity of mission, that has that kind of energy, those are the good managers for you to always keep because they're the ones who will succeed. Those are the ones who will overcome whatever setbacks you have to get that business back on the rails and moving towards your target effectively.

Also, again, always remember when you hire someone it also comes with the responsibility of potentially firing them some day. It's a very, very unhappy thing to do. I've never enjoyed firing people. I don't know anyone who enjoys firing people. When you always remember that, then you'll always say to yourself in the back of your mind, "I don't know, I'm not really feeling this candidate. I don't think I want to hire them because I'm afraid it will not work out." There's an old term in business that says it's easier to change people than to change people. That means that it's a whole lot easier to just replace a manager with someone new than to retrain them or change their bad habits. But it's best you don't have to change them at all. When you are out there hiring, try and choose people who can do a great job, people who have the energy, people who you can work with, people that you entrust to steer your storage facility to do great things. That's the happy thing to do. I would much rather have one employee forever in that facility than burning through a number of people.

So many times when you burn through people, part of y our problem is your own because you did not do a good job in hiring them and training them, and managing them. That's just not ever going to work for you. So again this is Frank Rolfe with the Self Storage University Podcast. Remember that people, managers, are one of the most important tools you have to success, and make sure to give that adequate consideration and time and effort so you only choose great managers. Hope you enjoyed this. Talk to you again soon.