For most people who choose to go to college and get a degree, the belief is that you will surely learn what you need to be successful in our career. However, even if you get a business management degree, you are not taught the single most important thing in managing employees. That is, how to hire one. And yet as you build your career, and perhaps even start a company, your ability to recruit and hire people will be perhaps the number one factor in your ultimate success. And there are costs associated with not hiring well, notwithstanding the impact on your career.

While not exact, the U.S. Department of Labor’s estimate is simple – the average cost of a poor hiring decision is at least 30 percent of the individual’s first-year expected earnings. If you take an employee with an annual income of $90,000, the cost to the organization can be $30,000. There is also a bigger cost and that is the time and energy consumed in managing poor performance, the drain on productivity from disrupted projects and lack of continuity of work. Lastly, and perhaps most important, there is the negative impact on team morale and the associated stress.

The first step to your success in hiring people well is the understanding of how critical hiring is and the fact that you need to learn this skill. No one was born to hire people; it’s a learned thing gained through knowledge, mentorship, experience and then applying what you learned to develop the skill of hiring well. Here are some insights to help you become better at hiring people.

Investors invest in people. As much as you may like your startup and believe that the market conditions are perfect, the truth is that most companies will have to adapt and change. Uber, PayPal, Instagram, and hundreds of other companies all started with one solution and had to pivot to another. What allowed them to become successful? The team. What all those companies had in common was a strong team that was able to take market feedback and build new products until they became the success they are today. Your goal in hiring is to build a great team at all levels of the company from the interns to the C-suite.

Every hire can be important. Nothing is more dangerous for a startup than one bad hire, one person who isn’t a culture fit or is simply not good enough at their job. Even if you resolve the situation quickly, you will get distracted and lose a lot of time. Startups don’t have the luxury of making a lot of mistakes. Poor hiring is one of the most risky and costly mistakes you can make at a startup. Empowering your team and getting out of the way is key, but it’s only possible if you hire the right people.


High performers attract high performers. The potential draw for talented job seekers is joining a team of highly skilled co-workers. Despite all the potential problems that arise with poor hiring, there is a huge upside if you do it right. With every great person that joins your team, the team gets stronger, and it will also get easier to attract the next person. The key is, how do you hire the first employee if you don’t yet have an amazing team? The good news is that you already have a team, even before your first hire. You and your co-founder(s) are a team. Your investor is on your team. Perhaps a strong advisor is on your team. You will have a team long before hiring that first employee, even if it doesn’t feel like it.

Culture is the team. It’s hard to create and manage a high-performing team. Great teams are generally a group of amazing individuals mixed together in just the right way. The glue between the outstanding coder and the social media marketer and the magic that allows sales to sell the right solution is having the right culture. Culture is not about free food, yoga class on Tuesdays or other perks. It’s about shared values and beliefs and the mission of the company that pulls everyone together. Great culture helps the company to be successful and will help tremendously to survive in the tough times. The importance of culture heavily impacts your hiring. Every single person you bring on in the early days changes your culture, in a good or bad way. Figuring out if somebody is a culture fit or if somebody is the right person for your team is crucial. Hire first for culture, then measure if they have the skillset and knowledge to do the job.

ABL. Always be looking. Hiring is not magic, and it’s not luck — it’s a skill you need to develop. Maybe you are good at it, but if not, you can learn to be better. And don’t forget that you are always hiring. It doesn’t matter if you are conducting a job interview in the office or if you are at a networking event. Maybe you aren’t looking for anybody right now, but you surely will be in the near future or at your next job or company. Finding and assessing true talent can be difficult so always be looking because you never know when you actually will need someone that you already met.


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