Shelly ran a second generation manufacturing business with sales just under $5 million per year. They were in the process of looking for a new inside sales person to replace the last one they had fired 6 months earlier. We were talking at a business conference I was speaking at and as I asked her more questions a pattern became very clear.
Me: “Why did you fire your last inside sales person?”
Shelly: “We discovered 3 months into the relationship that he had a criminal record.”
Me: “And what about the sales person you had before him, why did you let him go?”
Shelly: “He was just milking the inbound leads and taking orders. He wasn’t doing any outbound selling at all.”
Me: “How did you go about selecting these two sales people?”
Shelly: “They just kind of fell into our lap. We knew one through our personal network of friends. He was a nice guy who had been in sales for over 20 years so he had a lot of experience. And this last one, we met him through a networking group.”
Me: “What kind of interview process did you put them through? I mean, why did you hire them versus the other people you were interviewing at the time?”
Shelly: “Oh, we weren’t interviewing other people at the time, just them.”
You can already see where the conversation was headed. It turned out that Shelly had managed to make every one of the five hiring mistakes I’ve laid out below.
And the cost? In terms of lost hard costs, around $300,000. In terms of opportunity costs–the experience likely cost her company $1.5-2 million over a 24 month period.
Now before you just dismiss Shelly as a careless CEO, look closely at the list below and see which of these mistakes you’re also guilty of making.
One of the most important functions you and your leadership team are responsible for is the selection, hiring, onboarding, and integrating of your top level talent. Yet most business owners repeatedly make poor hiring decisions that come as a direct result from falling afoul of one or more of these top five hiring gaffs.
Considering that the true costs of a bad hirer can be in the hundreds of thousands of dollars, and the value of a strong hire can be the same or more–each year–your company needs you to avoid making these all too common hiring mistakes.
As you read through the list, ask yourself, “Which of these 7 hiring mistakes are we guilty of making and what are we prepared to do about it?”
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 companies rush this step and as a result they risk making the wrong hire.
When we talked with this candidate (we’ll call him Tom) we let ourselves get wowed by how he lead a team for this other company that was over 10 times larger than our companies.
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 skillset 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 success in the medium term.
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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Originally published at www.inc.com