The Five Rs of Employment

Part 2: The final four featuring replacement, retention, refinement, and renunciation.

By Ed Butts, PE, CPI

We began a two-part miniseries on working with employees last month by discussing the first of what
I call the “Five Rs”: recruitment. This month, we’ll conclude this series by covering the last four: replacement, retention, refinement, and renunciation (dismissal).

Replacing That Special Person

Although I no longer must worry about this, hiring a new employee to replace a departing employee was one of the tasks I dreaded most earlier in my career. The entire process from developing and placing help-wanted advertisements to the interview, checking references, and finally making the decision on whom to hire is one I could have done without as the entire process caused me nothing but heartburn.

The need to hire a new employee is often associated with either the loss of an employee or the growth of the company. Each need has different dynamics, and you should approach them that way.

The loss of an employee is often unexpected and the pressure to fill the position can be strong enough that you may be tempted to settle for less than you normally would just to get somebody back into the position. Don’t allow yourself to fall into this trap. Even though the departing employee may be one of the most valuable on your staff, you cannot afford in the short or long term to rush into selecting a replacement that
may end up a disaster.

Except in cases of true employee unhappiness, even the most talented prospective employee cannot usually offset the time and effort that you have invested in the departing employee.

A true case-by-case analysis requiring your honest appraisal of the departing employee’s talent, experience, knowledge, importance to the firm, and potential needs to be had every time. Sometimes, a little recognition is all a potentially departing employee desires. I have found this to be exceptionally true
even for the most talented pumpmen and water well drillers. That cockiness and occasional bit of arrogance they show is partially what makes them so good at what they do.

But assuming that the employee is actually leaving and you have no choice but to find a replacement, here are a few tips:

• Sit down with your department heads, foremen, etc., and evaluate exactly what you need from this position. The departing employee may have been bored, underperforming, misclassified, or doing work that was over their head. Balance the needs of the position against what you expect to pay and the return you expect to receive. Take your time, be diligent, and don’t rush into hiring someone without fully vetting the candidate. Don’t quickly disregard the possible training and elevation of another qualified crewman to the position.
• Determine the precise reasons that the former employee left. Was it due to a personal issue, underpay, overwork, underappreciation, bad benefits, better opportunity, or a personality conflict? How can we prevent a repeat of this occurrence? Consider ways to correct and incorporate these causes into the hiring process.
• Prepare a job solicitation that outlines the exact duties of the position and the type of training, education, etc., expected from candidates. This will help weed out individuals who will throw an application everywhere just to see if they get a bite. Always verify references and statements on job applications.
• During interviews, ask questions primarily related to the technical aspects of the job and abilities of the candidates.
• Although receiving meaningful and valuable insight from former employers is usually difficult due to liability concerns, try and ask questions of the applicant’s former employer related to the applicant’s ability to comply with the specific abilities and skills needed for the position. Exclude personality clashes.

Interviewing Prospective Hires

The process of hiring employees is nowhere near as easy and simple as it once was. In today’s litigious world, people always seem to be looking for ways to get into someone else’s pocket even if it means taking the so-called legal route.

Human resources managers and business owners today must be cautious and diligent during every portion of the soliciting, interviewing, and hiring process. Unfortunately, there are people who make a living by applying for jobs they are not even qualified to hold but then sue for a perceived violation of state or federal employment and hiring laws. Just as unfortunate is there are also enough lawyers out there who will readily participate in these bogus suits, hoping for a settlement to prevent an actual and unpredictable court appearance.

To prevent every possible scenario that could conceivably happen to you during an employee hiring process is almost impossible as it requires a hiring manager with consistent knowledge of and attention to the ever-changing government statutes and rules, and in some cases, assistance from an outside legal party.

While I cannot possibly detail every conceivable problem you may encounter when posting employment solicitations, conducting interviews, or checking references, I can give some basic advice based solely on my own personal past experiences. But be aware, you must apply your own judgment to these guidelines, and when in doubt, may want to consider consulting an employment attorney to help prevent problems.

When hiring new employees to accommodate company growth, you can usually afford to be a little pickier and take your time. This is not to say that you should not follow the same basic guidelines shown above. You should, but when hiring for expansion or growth, consider the needs of the company and not just today, but four to five years from now.

Will this new employee fit into your firm’s master plan? Will he or she fit into the family atmosphere you have worked so hard to cultivate? Will they be able to grow with the company and learn new tasks and duties as the need arises and technology changes?

During all hiring procedures, it is vital that you do not inquire into areas that are deemed off limits by law. This includes questions in person and on your company applications related to an applicant’s sex, age, racial or marital status, height, weight, years of military service, grade or high school years of graduation, or handicapped status.

Questions that could inadvertently reveal the age of the applicant such as the year of high school graduation or years of marriage are dangerous ones to ask. Basically, when conducting an interview or preparing a job application form, ask yourself, “Is this question really relevant to the job?” Often, the answer will be no. If so, it’s best to refrain from asking it.

It is also important to follow the process for hiring outlined in your company policy manual. You say that you don’t have a company policy manual? You had better prepare one quickly even if you must pay an attorney to write it. You should always follow the procedures for hiring and firing employees outlined in your policy manual and in accordance with state and federal laws to not demonstrate favoritism or bias towards or against any potential employee.

Many companies have mandatory drug and alcohol testing now as a condition of hiring or continued employment as well. In these situations, follow the applicable state and federal rules, include the provision into your policy manual, and apply it fairly and uniformly. In most states, you must use a third party to administer the testing and reporting.

Employee Retention

Many young individuals feel for whatever reason that they are entitled to receive a high starting wage without the need to first prove their worth. I do not have a single, good answer for this predicament other than to consider offsetting elements of specific benefits as a hiring inducement and incentives for sticking around.

However, as a drilling or pump company owner or manager looking for employees who want to stay in it for the long haul, this is often easier said than done. In fact, according to one survey, 31% of employees quit within the first six months of starting a new job, and many of these employees frequently cite job disillusionment as the cause.

Fortunately, with the right approach and an effective hiring strategy, any business leader can quickly find and retain the right employee. In my case, I tried the use of individual attractions such as a personal locker, coveralls, training and education reimbursements or allowances, holiday parties, and on-call vehicles to name but a few. The list can go on and on, but it must be tailored to your specific operation, employees,
and local business and competitive environment.

The important thing is to consider everything. Ask for employee and supervisor suggestions and and don’t simply dismiss an idea or suggestion because it appears to be too expensive or burdensome at the outset to administer. Evaluate each prospective compensation idea on its own merit as well as a simple benefit versus cost and potential employee satisfaction analysis. For, if the reward sufficiently outweighs the
commensurate risk no matter the expense (okay, almost no matter), then isn’t it at least worth a look?

Employee Refinement

Employee refinement, also known as employee development or continuing education, is an important aspect of an owner-employee relationship as well as critical to the firm’s success and perpetuation.

For this relationship to continue, the employee must feel he or she is valuable to the firm beyond basic compensation. This is basic human nature. It is also often partially verified through the employer’s desire and willingness to send their employees to training sessions, seminars, classes, conferences for continuing education.

In some cases, documented continuing education units (CEUs) are required by state licensing boards. The continuous advancements and improvements in water well and water system equipment and technology virtually demand participation in these types of activities just to stay current with technology and remain competitive.

Basically, all field employees and many of the sales staff should receive continuing education in some form. I feel that sales staff should also participate in relevant continuing education and industry seminars to better understand the products and systems they sell as well as intelligently answer customer inquiries involving proposals or new or updated products.

Beyond the obvious benefits associated with learning new techniques, introduction to new equipment and the opportunity to socialize with coworkers or others in the same profession at training sessions, seminars, and conferences provides a way of breaking up the normal monotony of field work, especially during cold, winter days.

This can be invaluable to an employee’s morale and will generally pay dividends to the employer in the form of added knowledge and techniques, more effective and efficient troubleshooting skills, and improved moods. I typically found sending my entire field crew to a local Franklin Electric Service School for a day helped bond the employees as well as providing them with valuable information on new and improved Franklin equipment and service techniques.

This has been particularly useful since the introduction and widespread use of more electronic equipment, specifically variable frequency drives (VFDs), as manufacturer- or vendor-sponsored training sessions were also included. Although this often meant I had to respond to a service call myself for a day or two, it allowed me to refresh and use my troubleshooting skills with the benefits still far outweighing any disadvantages.

Employee refinement must be tailored to the type and size of the business along with the employee and the specific work they perform. Sending an employee to an irrigation trade show, for example, when the employee and firm doesn’t participate in the field of irrigation, may be a nice distraction and benefit to a favored employee, but other employees and the IRS may see it as an unnecessary and fraudulent benefit. Therefore, prudent caution must be exercised with this type of perk.

Another element of continuing education that should be offered to employees, either paid for or cost-shared, are correspondence, extension, or local community college courses in a job or even non-job-related topic. I believe that any way of improving an employee’s knowledge base and outside interests is also an advantage to the firm.

When requested, we would generally reimburse an employee, either in full or partially (depending on the requested topic), for a course or class he or she attended—even those with marginal or no direct value to their job. I viewed it as a way to retain and bolster the employee’s loyalty to the firm and establish a rapport we may otherwise not have developed.

Obviously, this doesn’t apply to every employee or circumstance, but I sincerely believe that beyond the obvious benefits of enhanced knowledge, technical ability, and improved morale, continuing education is a must to retain the goodwill—and hopefully continued employment and loyalty—of employees to the firm.

Renunciation (Firing Employees)

Renunciation, also known in this column as an employee firing or dismissal, is actually defined by Dictionary.com as “an act or instance of relinquishing, abandoning, repudiating, or sacrificing something, as a right, title, person, or ambition.”

The inevitable but unfortunate need to occasionally fire an employee is one that the average business owner cannot avoid. However, proper planning and ensuring that the firing is legal and procedurally correct can make the process less painful for both parties.

Circumstances such as failure of the employee to learn and develop new skills, insubordination, dishonesty, the need to reduce payroll in response to an economic downturn, or repeated violations of company policy are common reasons to discharge an employee.

The subject of day-to-day business operation is so full of pitfalls and dangers that I cannot possibly detail all in this space. At a minimum, you must be fully aware of all possible legal issues and other problems that could arise when discharging an employee and ensure that you are on firm legal ground before proceeding.

The most important recommendation I can make is summed up in one word: fairness. You must be fair to all employees as well as to the company when determining whom to discharge and you must ensure that your reasons are valid, without prejudice or bias, and will hold up under scrutiny.

During all employment-related actions, it is vital you follow the guidelines spelled out in your company policy manual. I cannot stress enough that a firm that functions without a legal company policy manual is playing with fire and will get burned someday.

It is also critical to document all infractions and violations of company policy. It’s not enough to simply tell an employee that he or she is fired. You should have valid and documented reasons plus confirmation from supervisory personnel, if possible. Verbal reprimands and unwritten anecdotes are not good enough; you must carefully document all infractions and follow a complete policy manual that states how layoffs and firings are handled and you must stick to it when performing this task. The policy manual should state exactly how discipline is handled and what violations of policy can result in suspension or termination.

Many U.S. states have an employment stipulation referred to as “employment at will.” Do not be lulled into a complacent feeling that you are protected by an at-will provision. This simply means that in the absence of any employment agreement an employee may quit or the employer may discharge an employee at any time for any or no reason.

Although many states supposedly have laws that permit employment at will, you may find that your right to employ at will is really not true. Any violation of any contract, whether written or oral, negates an agreement to employ at will. It may not matter whether or not you think you have no oral agreement with the employee, if they believe there is one and can prove it through evidence, such as a fellow employee’s concurrence, you may get into trouble.

Also, any employee who files a complaint related to OSHA violations or other whistleblower acts is protected from any retaliatory discharge.

This all basically means if you decide to discharge any employee, you must verify the reasons are valid, legal, and defensible. A disgruntled employee who feels they were discriminated against based on age, sex, handicap, or other protected classes can easily file a lawsuit or complaint even if the charge is baseless. This scenario is exceptionally bad for an employer since the employee can often receive the benefit of
free legal counsel via the involved agency, while the employer must hire and pay attorneys themselves.

One last recommendation related to firing an employee is to distinguish between a firing or discharge and layoff. An employee who is technically laid off can usually receive unemployment benefits and may feel they have some assurance that they may or will someday return to work even if that was not your intention.

Be clear if the dismissal is an actual discharge, based on violations of policy or some other act that justifies firing, or is simply a layoff, due to an actual shortage of work or other economic factors. The language you use can be critical later when asked to defend your actions, so be sure that what is said or written is what you want to say.

To summarize, the process of hiring or firing employees is a necessary evil and one that business owners cannot usually avoid at some time during their careers. With a good and strong company manual and a basic understanding of the applicable laws in your state, though, you can make these tasks much less painful and risky.

______________________________________________

This concludes this edition of Engineering Your Business and this two-part miniseries on employer-employee relationships. We’ll continue our year-long series on business topics next month with an overview of business reporting documents, specifically balance sheets and profit and loss statements.

Until then, work safe and smart.

Ed Butts, PE, CPI, is the chief engineer at 4B Engineering & Consulting, Salem, Oregon. He has more than 40 years of experience in the water well business, specializing in engineering and business management. He was honored by the National Ground Water Association with the 2025 Technology Award. He can be reached at epbpe@juno.com.