You may think it’s easy to reverse course after a hiring mistake at your startup. Simply terminate the bad hire and move forward—no harm done.
Here’s the reality: A bad hire can have long-term, detrimental effects on your startup.
So, what’s the real cost of a bad hire?
The cost of the wrong hire
When it comes to financials, the U.S. Department of Labor’s estimate is simple—a bad hire will cost you, on average, at least 30 percent of the individual’s first-year expected earnings.
The cost to your team’s morale, however, is harder to quantify.
Depending on the rank of the bad hire, your operations can take months to recover. Your data may be muddled as a result of mishandling, and their direct reports may be on the verge of leaving themselves, if they have not already. Trust in your leadership may be permanently damaged.
Needless to say, hiring is not something you should take lightly, especially at a startup. In fact, 14 percent of startups fail due to not having the right team.
We’ve compiled five common hiring mistakes that startups tend to make and how you can adjust your hiring practices to ensure your new hires are in it for the long haul:
- Focusing only on culture fit
- Alternatively, not focusing enough on culture fit
- Hiring too quickly (or on a whim)
- Only focusing on getting candidates in the door and not what happens after that
- Lacking clear and measurable outcomes in the job description
If you bring intentionality into your hiring practices, your startup’s recruitment process will evolve into a well-oiled machine—no bait and switch necessary.
Mistake #1: Focusing only on culture fit
An emphasis on “culture” often leads startups to become a caricature of themselves.
Ping-pong tables, frequent happy hours, and pizza parties are all well and good. If you carry a “work hard, play hard” mentality to your operations, it’s not wrong to look for alignment in potential new hires.
You’re only human—of course, you will have an affinity toward individuals you generally “like.” But be cautious of hiring someone simply because you’re personally aligned with them, separate from whether or not they are qualified for the job you need to fill.
How to avoid this hiring mistake: Diversify your interviewing team. If you are the CEO, you can and should be as involved as you want, but make sure there are multiple touchpoints for new hires so that one individual’s personal bias does not overwhelm a candidate’s actual background and experience.
Mistake #2: Not focusing enough on culture fit
Stay with us here—we promise we’re not crazy.
As we said, culture fit should not be the only thing you consider as you hire. But, let’s say you do have a “work hard, play hard” value system deeply integrated into your culture. If you disregard culture fit and hire someone who is all business and more stringent in their workplace interactions, you will quickly see this person’s department suffer from severe culture misalignment.
Their team will likely get whiplash from the deviations, and it will severely impact morale. You may also see this person siloed, as their interactions with others on the team will be strained.
How to avoid this hiring mistake: Ask for references and try to dig for how their professional relationships tend to exist. Even if they list references who are sure to speak highly of their outcomes, you can still uncover truths about how a potential hire operates culturally.
Mistake #3: Hiring too quickly (or on a whim)
One of the most common hiring mistakes at a startup is seeing a gap in skills internally and immediately rushing to fill that gap with a full-time hire.
Many founders suffer from “shiny object syndrome” (we say this with love). Wanting to fill your C-suite immediately, or hire for the latest trending position on LinkedIn, is tempting, and we get that.
But hiring on a whim puts you at risk for a sunk cost if you fail to think through whether that position will set you up for success in the long term.
How to avoid this hiring mistake: When you feel the pang of a skills gap, take some time to suss out whether this skill is only needed for the short term or is something you will need for multiple projects going forward. Bring your team into this thought process as well.
Just because other startups are making this same hire doesn’t mean you need it, too. You may have a different customer persona or audience or be B2B instead of B2C—there are so many components to a new position opening up. Identify your goals and evaluate what makes sense for you.
You might also consider outsourcing certain roles if the skills gap is for a single, short-term project. To put it simply, look before you leap! Not every skills gap should result in a full-time hire.
Mistake #4: Only focusing on getting candidates in the door (and not what happens after)
The words “recruitment,” “hiring,” and “onboarding” often go hand in hand and are used interchangeably. The truth is, these are three totally different practices.
If you have ironed out your hiring practices to make filling seats a seamless operation, that’s great. But that does not equate to a seamless onboarding experience for your new hire.
Too often, we hear stories about new startup hires who are handed a laptop, given a pat on the back, and expected to dive in headfirst to an entirely new culture and ecosystem.
Startup growth is enormously exciting, and the speed and efficiency of your hiring process should reflect that. But don’t discount what happens after the offer letter is signed—make sure your onboarding is just as optimized, intentional, and informative.
How to avoid this hiring mistake: Work with an expert to design an onboarding process that makes sense for your startup and culture.
Related: 5 Ways to Strengthen Onboarding at Your Startup
Mistake #5: Lacking clear and measurable outcomes for new hires
Let’s take marketing as an example. When you decide to make your first marketing hire, there are two different frames of mind you can have.
Mindframe A: Most startups have marketing, so we need marketing. Let’s hire someone to “do marketing.”
Mindframe B: We need to increase our visibility and inbound leads. Let’s hire someone who knows how to operate within a set budget to bring more awareness to our brand and product and who can help sales generate more leads.
See the difference?
Your job descriptions shouldn’t be arbitrary. It’s likely that the roles of your early hires will evolve over time, but that doesn’t mean you should bring people in without having a set expectation of what they will accomplish.
It’s a waste of time because you will drive yourself crazy trying to measure their performance. It’s also a waste of their time because they will have no idea where to start when they are brought in, where they stand, or what their path for growth looks like.
How to avoid this hiring mistake: Outline exactly what you expect the new position to accomplish in their first 30, 60, and 90 days. You might even ask candidates this during the interview process. When you discuss these timelines, the outcomes discussed should be measurable—i.e.,talk to three customers, bring followers up to 1,000, or increase website traffic by 20 percent.
Before You Go
No matter how robust your screening process is, one or two misalignments might still work their way into your organization. The important thing is not to let their impact fester and to remove the “wound” before the infection spreads.
Startup founders are experiencing many things for the first time, including hiring; this will be a continual process of learning.
In the meantime, if you want to offload the recruiting and hiring process, Viaduct can help. Whether you are looking for full-time or contingent staff, Viaduct specializes in the placement of startup professionals that can bring your vision to life. Learn more about working with our team of recruiting experts here.
Related: 6 Ways to Attract and Hire Best-Fit Startup Talent
This blog was authored by Talent Consultant Sarah Garcia.