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Finding the Right People

When a small company grows, managers must take on many new roles. Besides the day-to-day running of the business, they find themselves responsible for, among other things, relations with outside investors, increased levels of cash flow and, hardest of all, recruitment.

For most managers of small and medium-sized enterprises, the job of searching for, interviewing and selecting staff is difficult and time-consuming. Yet few are trained and competent for all aspects of the task. Interviewing, for example, is a highly skilled activity in itself.

“We have found the whole process very hard,” says Dan Baker, founding partner of a PR company. “In seven years we have grown from five to eighteen staff, but we have not found it easy to locate and recruit the right people.” Recruitment would seem an obvious task to outsource, but the company’s experience of recruitment agencies was not encouraging.

As Dan Baker explains, “We went to one for our first recruitment drive, but they took a lot of money in advance and didn’t put forward anybody suitable. In the end we had to do it ourselves.”

Most recruitment decisions are based on a pile of CVs, a couple of short interviews and two cautious references. David Rowe, a business psychologist, studied how appointments were made in five small companies. He claims that selection was rarely based in clear criteria. More often than not, the people making the choice prioritized different qualities in candidates or relied on guesswork. This kind of approach to recruitment often has unhappy consequences for both employers and new recruits.

Small companies often know what kind of person they are looking for. They are usually in very specific markets and the problem they face is that recruitment agencies may not really understand the sector. According to David Rowe, this mean that small company managers themselves have to devote more time and energy to recruitment. It shouldn’t be something that is left to the evenings or weekends.

Many companies start the recruitment process with over-optimistic ideas about the type of person that will fit into their team. “It’s very easy to say you must have the best people in the top positions,” says Alex Jones, managing partner of an executive recruitment company. “But someone who is excellent in one company may not do so well in another environment. A finance director in a big company, for example, will often make a terrible small company finance director because he or she is used to having a team doing the day-to-day jobs.

You can never guarantee a successful transfer of skills.”

Whatever the candidate’s qualifications, their personal qualities are just as important since they will have to integrate with existing members of staff. This is where, the recruitment industry argues, they can really help.

According to Alex Jones, “a good recruitment agency will visit your company and ask a lot of questions. They need paying for that, of course, but you will have them working for you and not for the candidate. They can ask applicants all sorts of questions with a shortlist of people who not only have the skills, but who are likely to






fit in with your company’s way of doing things.”



A fork in the road



Malaysia's crisis-ridden national carmaker faces a stark choice.

WHAT will become of Proton, Malaysia's struggling carmaker? A political project set up in the 1980s, it never picked up speed, has been overtaken by foreign competitors and has become embroiled(使混乱;使卷入纠纷)in a struggle over its future direction. With its cash reserves running low, it is now in danger of breaking down altogether. The government, which hopes to place the company with a “strategic partner” by next February, simply wants to extricate使摆脱,解救)itself from the mess with the minimum of humiliation. Which route it will take is the subject of feverish speculation.

Proton was set up by the government in 1983 and started building cars two years later in association with Mitsubishi of Japan. It was a central part of the strategy laid out by Mahathir Mohamad, the prime minister at the time, to transform Malaysia into an industrialised nation by 2020. The idea was that a big carmaker would create jobs, provide access to technologies, bring in export earnings and spawn a host of supporting industries. But Proton never got big.

Although it once had 65% of the local market, output never rose above 227,000 cars a year and exports never exceeded 20,000 units annually. In an industry dominated by a handful of global giants, each producing 3m-6m cars a year, Proton remains a minnow小鱼).

Yet it has refused to scale down its ambitions. Proton has built factories capable of churning out(粗制滥造)1m cars a year and has launched a range of models. But quality is poor and low volumes mean it is not able to compete on cost. Even local consumers have become fed up with Proton's cars, with their sharply declining second-hand values. They have switched loyalties to what was once the second national carmaker, Perodua, which is now controlled and very competently run by Japan's Daihatsu, part of Toyota. Proton's market share in Malaysia has fallen steadily






in the past few years and is now just 31%.

The crisis has intensified in recent weeks because Proton's cash is running out. In 2003 it had 3.8 billion ringgit马来西亚货币林吉特)($1.1 billion) in the bank, but today it has only 500m ringgit, half what it had in March. Hence the government's recent announcement that it was in new talks with two big European car groups, Volkswagen and PSA Peugeot Citroën, with a view to selling part or all of its stake to one of them or forming some kind of strategic alliance.

The trouble is that Proton is not just an ailing carmaker. It is also a political hot potato, since it is caught up in the feud between Dr Mahathir and Abdullah Badawi, who succeeded him as prime minister in 2003. Mr Badawi sees the firm as a liability(麻烦), but to Dr Mahathir any sale would be tantamount to相当于)dismantling his legacy. Khazanah, the national investment authority and Proton's main shareholder, is also reluctant to sell because of the write-down it would take. To complicate matters further Proton's management, in an effort to assert control, has signed vague letters of intent with carmakers including Peugeot and China's Chery.

And three local car importers, DRB-Hicom, Naza Group and Mofaz, separately offered to buy Proton in order to keep it in Malaysian hands.

But even if a buyer can be found, a sale would cause other problems.4 . And although another carmaker could use Proton's manufacturing plants, it would make little financial sense, since most parts would have to be imported. Foreign component-makers, put off by Malaysia's rules that give advantages to ethnic Malays, have set up shop in Thailand instead.

Malaysia's government, the prime minister and his meddling predecessor do not have long to decide which way to turn. Should Proton give up and become a tiny part of a global carmaker, or should it struggle on in the hope that things will somehow improve? Selling out to a foreign firm would be humiliating. But Proton's struggles are already a national embarrassment as it is.






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