Saturday, July 13, 2024
CEOWORLD magazine - Latest - CEO Agenda - The 5 Most Expensive Hiring Mistakes a Business Owner or CEO Can Make

CEO Agenda

The 5 Most Expensive Hiring Mistakes a Business Owner or CEO Can Make

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One of your most important leadership functions is in selecting, hiring, and integrating top level talent to help you grow your company.

The true cost of a bad hire can be in the hundreds of thousands of dollars.

Here are the 5 most expensive hiring mistakes and how you can avoid them:

1. Not clearly identifying – in writing – exactly who you are looking to hire.
Without question, the single most expensive hiring mistake is not taking the time to think through—on paper—exactly who you are looking to hire.

  1. What key responsibilities do you expect this person to take on?
  2. What deliverables will this person need to produce?
  3. What skillsets must he or she have?
  4. What experience set must they have to be successful in this role?
  5. What are the educational requirements (if any)?
  6. What character and personality traits or temperament will they need to be a strong, long-term fit?

When you start with this written description, then and only then can you start to craft the right recruitment strategy, prepare your interview questions, and start to talk with candidates about the position.

Too many business owners and CEOs rush this step and as a result they risk making the wrong hire.

careers and job

2. Allowing yourself to be wowed by irrelevant “star” experiences.|

I remember one sales manager I hired for a training company I was scaling. My company was growing at 100% per year and needed to bring on more high level staff to help us maintain that growth.

We found this candidate through an internal headhunting effort (we called up 6 of the most respected companies in our industry that we felt had great results in their sales efforts).

When we talked with this candidate (we’ll call him Tom) we let ourselves get wowed by how he lead a team for a different company that was over 10 times larger than our company.

The problem was, we let ourselves get seduced by how perfect Tom would be when we reached $50 million in sales. But what we really needed was someone who could help us scale from $7 million per year to $15 million, which is something Tom had never done. He knew how to maintain a working large-scale sales force, but he didn’t know how to develop one from the ground up. That hiring mistake cost us several million dollars and 18 months of time.

You must hire people who have the experiences and skill set to do the job you need them to do at this stage in your business, not the job that is 3-5 years down the road. Make sure the experiences they show you are the exact ones they’ll need to succeed in the mid-term.

3. Not letting your 800lb gorillas dominate your decision.

Every position has 3-5 MUST-HAVES of skills, experiences, or character traits in order for the candidate to be successful in the role you are hiring for. We call these 3-5 must-haves “gorillas” as in, if you were sitting in a room with an 800lb gorilla, you’d forget everything else and pay attention to the gorilla!

Similarly in hiring, you’ve got to do your evaluation of candidates and make your final selection based on these 3-5 gorillas. Don’t let secondary or irrelevant things sway your decision – let the 3-5 most important success factors for that role dominate your decision making.

4. Talking in hypotheticals, not actual past experiences.

Anyone can have a great answer to a hypothetical question. You don’t want to know what they would do in the clinical and clean world of make believe, you want to know what they have actually and concretely done in their actual past.

jobs and career

5. Allowing them to “date around” while you’re looking for a long-term, exclusive fit.

It’s a lot of effort and expense to spend time interviewing candidates. This is why I recommend that before you let a candidate get to the later stages you make absolutely clear your position and opportunity is one that they want.

Ask them, “Before we do this final round of interviews with our top three candidates, I want to protect your time and our time, is this a position that you definitely want? I think you’d be great for one of the final 3 candidate slots, but I don’t want to choose you for this if you aren’t sure this is the position you want.” Ask them why. Ask them what their spouse thinks. Ask them if there is any other position that they want more. Do this while they are still in the “selling” role of convincing you that they are the right hire. If they are playing the field, then I caution you from investing more hiring energy with them. Get them to informally commit that they deeply desire to work with you.

Could they later change their mind? Of course, but if you do your qualifying work before you have invited them to that last round, your chances are much greater that your first choice for the job will jump at the opportunity.

Ultimately, by applying what I’ve just shared, you’ll be able to avoid these all too common and expensive hiring mistakes.

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CEOWORLD magazine - Latest - CEO Agenda - The 5 Most Expensive Hiring Mistakes a Business Owner or CEO Can Make
David Finkel
David Finkel is the author of 12 business books, including his newest release The Freedom Formula. He is the co-author of Scale: Seven Proven Principles to Grow Your Business and Get Your Life Back (written with co-founder Jeff Hoffman), and a respected business thinker. Finkel's weekly business owner e-letter is read by 100,000 business owners around the world each week. Finkel is the CEO of Maui Mastermind, a business coaching company. Over the past 20 years, Finkel and the other Maui coaches have personally scaled and sold more than $2 billion worth of businesses. David Finkel is an opinion columnist for the CEOWORLD magazine.