4 Hiring Mistakes Most Entrepreneurs Make

Business owners are justifiably terrified about hiring the wrong person. Bad hires undermine team morale, are expensive and can kill your company.

I'm very proud of the team we've built at crowdSPRING, but we made some bad hires along the way.

The really bad hires are easy and obvious. One of our first engineers was late by an average of four hours in his first three days. We fixed our mistake by terminating him.

Most bad hires are not so obvious, but they are incredibly costly. There's an opportunity cost when you continue to employ someone who isn't working well with the team. At a startup, the opportunity cost is often the difference between success and failure.

How can you manage your fears so that you don't end up with mediocre employees? Here are the key insights I learned over the past 18 years:

Rushing the hiring process just to put a body in a chair.
When possible, do the job yourself before hiring someone, to help you understand the skills necessary.

When we were a young startup, we typically looked at the pool of respondents and hired the best person. After a few years, I realized we were compromising. After making a few hiring mistakes, we now hire only when a candidate is the right fit for us. We've had hiring cycles where after reviewing hundreds of applicants for a position, we elected not to hire anyone. We've also hired multiple people when looking for only a single hire. Once you fully understand the job requirements, hire the right person, not the best person from among those who responded.

To hire the best person from among many, you need to read tons of resumes, do many phone interviews, and conduct at least five to 10 in-person interviews.

If you create standards that clearly define the right person for the job, you'll know when you meet them, even if you've only interviewed one or two people. Our most recent hire in customer service impressed us with his creativity by writing and performing an original song as his cover letter and his references were glowing. We'd only interviewed two people for the job and he was the second one.

Hiring the best candidate.
It's become a cliché to say you should hire people smarter than you. Most successful business owners strive to do so. But the smartest, most skillful people are not always the right people for the job.

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One of our biggest hiring mistakes as a young company was not paying attention to cultural fit. You can teach skills, but you cannot teach passion, a good work ethic and respect for the collaborative process. When you add a lone ranger to an efficient and collaborative group, you can undermine the entire team and the evolution of your company.

When interviewing, ask about the candidate's most and least favorite projects. Compare the passion with which they describe each, the effort they brought to each project and the results they achieved. Highly effective employees will, naturally, be more passionate about projects they loved, but they'll demonstrate a good deal of self-discipline talking about projects they did not like and what they did to achieve great results despite a lack of strong interest.

Committing to an employee before trying them out.
A number of years ago, after making a really bad hire and quickly fixing our mistake, we decided we would not hire for any full-time position without a short trial period first. Today we hire people on an initial 30-day contract. We pay them the equivalent of the full-time salaries they would receive, but make it clear this is a test period for us to see how they work with our team and for them to decide if they like working with us. You can identify problems during those 30 days that you never could have identified during a series of short interviews and reference calls. If the problems are significant, you can choose not to extend a full-time contract to that person. On the other hand, if a candidate is an exceptional fit, you can extend a full-time contract well before the 30-day trial period ends.

Not fixing your mistakes quickly.
Most business owners are uncomfortable when they must fire an employee. But you do yourself and your team a disservice if you don't act quickly when you realize you've made a mistake.

When I look back on some of our costliest early hiring mistakes, our unwillingness to quickly terminate a poorly performing employee is at the top of the list. A mediocre employee will not only cost you a lot of money, but can damage the rest of your team.

The most compassionate act you can take when you realize you made a mistake is to be transparent and fix your mistake quickly.

What other hiring mistakes have you made or encountered? Share them in the comments below.