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How do you know if you made a mistake in hiring?
If your company is growing and you are hiring quickly, it’s inevitable that you will make a mistake. No one is perfect, and at some point you’ll hire someone that isn’t a good fit for the job, something we call a “mis-hire”. Sometimes it’s that the person cannot do the work, sometimes they can’t fit into your process and sometimes they break the law. It happens.
The cost of a mis-hire is high, higher than you might realize. Every time you hire the wrong person it costs you:
The time it took to recruit for the position.
The time they were in the position, but not able to do it.
The money you paid them to do the job poorly.
The time it will take you to recruit for the position again.
That is a lot! If the mis-hire is an individual contributor, a mis-hire can cost you 3-4 months at a minimum. If the mis-hire is an executive, it can cost you upwards of 9-12 months! Small companies typically don’t have a year to spare so an executive mis-hire can literally kill the company. As a result, you need to identify as quickly as possible if you made a mis-hire so you can save time by correcting it immediately.
Here are some steps you can take to identify mis-hires quickly:
Step 1. Employee Onboarding
You spend a lot of time and effort on hiring, so you should make the most of it by investing in your employee onboarding. This helps identify mis-hires as well, since the longer it takes to onboard the longer it takes to identify someone who won’t be able to do the job.
You want the new hire to prove they can do the job in their first week. Onboarding can vary by position, but in any position they should be able to achieve something quickly. If they are a salesperson, have them learn your pitch. If it’s an engineer, make sure they are committing code. There is no benefit from drawing things out long term, make sure employees are doing the work immediately even if they still have more to learn to be at full speed.
This is true for executives too! Many executives want to be in “learn and adapt” mode for the first few months on the team, but you want to see them in action immediately. Your new VP of Sales should be on sales calls, even if she isn’t leading them, and providing perspective from their experience.
If someone is a mis-hire you’ll see the warning signs in their first week because they will struggle to do the work.
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Step 2. New Employee Reviews
One of the best measurements of your hiring process is not whether you fill positions! Anyone can fill positions poorly. A great hiring process is measured by the quality and happiness of employees after they start. Your hiring process should include scheduling a review for 2-6 weeks after the new hire has started to see how they are doing.
This kind of review helps you understand a lot about the employee and your process:
Are they happy? Why or why not?
What have they learned? What was missing?
What have they done? Why not more?
Who have they met and worked with? Who have they not?
The review should include gathering feedback from their team, since you can never trust anyone to be objective about their own performance. Through all of these data points you should have a good picture of whether the employee is doing well or if changes need to be made.
You will also learn a lot about how to improve your employee onboarding from Step 1! In fact, your onboard should improve with every hire.
Step 3. Build a culture of feedback
Employees will only share their perspective if they feel heard. Companies are not democracies, and you don’t need employees to vote on outcomes, but if they feel strongly about something you should listen. Feedback comes from people who care, and people who care often have good points to make.
If you have a culture that encourages feedback, you will learn more about how the company works. If you have a culture that encourages feedback without blame, you will learn more about how the people at your company work. Blame free feedback is not about politics or undermining others, it’s about constructively working together as a team. You need to be VERY firm about not listening to blame, as it becomes toxic, but blame-free feedback is healthy.
The team members will be the best people to let you know if a mis-hire is not going to make it. If you trust them and they trust you, that trust is your best defense.
None of these steps are perfect on their own, but together they give you a strong foundation. In fact, the foundation is strong for both empowering great employees and identifying mis-hires! It’s easier to find problems if you have a strong process, but it’s also easier for great people to move fast. You need to be careful not to use too much process and constrain your team, so the steps above are an example of a lightweight but thorough process.
What was that about breaking the law?
I mentioned in passing earlier that mis-hires might break the law. Of course ANY employee might break the law, commit fraud or generally break your company rules & policies. Your best defense is to have an anonymous fraud reporting form that anyone can fill out to report something suspicious. No process will catch every illegal action (since illegal actions break process, by definition) so you want to empower your team to report these when they see them without fearing reprisals. Most reports will not go anywhere, but better to be safe than sorry.
Remember, mis-hires are also painful for the mis-hired employee, since they were put in a position where they couldn’t be successful. They will have to try and explain this in their future job interviews, while dealing with the ego blow of having performed poorly. If you have to part ways with a mis-hired employee, be generous with both severance and support. Help them find a job that is better for them so they can thrive, since the mis-hire was your fault in the end.
We all make mistakes, the best we can do is identify them quickly and do our best to correct them. That’s as true of hiring as anything else.