10 Ways to Avoid Making $100,000 Hiring Mistakes

September 18, 2019

Take a moment to consider the following: If your company hires 100 people in the next 12 months, that’s an annual increase in compensation costs of at least $10 million if you factor in an average total compensation of $100,000 per person. Clearly, the total cost of hiring dwarfs the cost per hire, and no matter how you cut it, that’s a lot of money. Unfortunately, much of this spend will be wasted by hiring the wrong people.

The graphic above describes my end-to-end hiring process designed to minimize the chances of making those wrong hires. And to help you implement this process, here are 10 tips to help you avoid those $100,000 hiring mistakes: 

1. Don’t judge a book by its cover or a wine by its label. A good rule of thumb is to wait 30 minutes before making any yes/no hiring decisions, as you’ll minimize the impact of first impression bias. (Here are some ideas on how to wait the 30 minutes and for eliminating bias of any type.)

2. Ensure recruiters and hiring managers have clarified expectations before the hire. It’s impossible to assess someone properly for ability, fit, and motivation without having a complete grasp of the actual work the person will be doing. Worse still, recruiters who can’t describe the actual work to top tier candidates when they ask Tell me about the job? won’t be able to convince them to become serious candidates.

3. Don’t screen on compensation and skills too soon. The strongest candidates are willing to negotiate the compensation if the job represents a true upward career move. Recruiters often short-circuit the chance to hire these people by only checking boxes for skills and forcing candidates to agree to a compensation range before they know anything about the job.

4. Conduct exploratory phone screens. You’ll save time, increase assessment accuracy, and close more deals within your budget by only inviting semi-finalists for onsite interviews. A structured phone screen can ensure the people you invite onsite are not only top performers, but also the kind of candidates who would see the open role as the best career move among competing alternatives.

5. Don’t use generic competencies and behavioral interviewing without context. Asking for examples of competencies and behaviors without describing how they will  actually be used on the job is a mistake. It’s like assuming people will always go the extra mile just because they’ve done it a few times. Doing it all of the time in different situations is what matters.  

6. Don’t ignore the fit factors. Even the most able candidates will underperform if their working style clashes with the hiring manager, if they don’t fit with the team and company culture, and if they’re not intrinsically motivated to do the actual work required with the resources provided. The Hiring Formula for Success describes how to relate ability with these fit factors to accurately predict on-the-job performance.

7. Assess strangers using the same process used to assess acquaintances. People known to the hiring manager or who come highly recommended via referral are assessed on their past performance and future potential. I find that this hiring approach is very accurate in predicting subsequent performance. On the other hand, those who apply without a reference or their foot in the door are evaluated on their years of experience, depth of skills, and how well they interview. This much-too-common approach is not nearly as accurate. Here’s how strangers can be assessed like acquaintances.

8. Hire for diversity in diverse ways. “Same old, same old” is a bad strategy for hiring diverse talent. To truly find diverse candidates, try shifting to a performance qualified assessment process to expand your talent pool to include candidates from all backgrounds.

9. Don’t use a surplus of talent strategy when a surplus of talent doesn’t exist. Weeding out the weak using advanced technology and state-of-the-art artificial intelligence will backfire if the best people aren’t applying or get weeded out for reasons that don’t predict performance. Instead, go with an “attract the best” high touch talent strategy that offers career growth over some ill-defined lateral transfer.

10. Hire for Year One, not Day One. Avoid falling into the trap of hiring to fill a job quickly. A “Win-Win” hiring process requires the hiring manager and the new hire to both agree it was the right decision one year after the position was filled.

I’m not sure if hiring managers should be allowed to hire people on their own if they don’t have a proven track record of doing it. I’m also not sure if B-level managers are able to hire A-level talent. What I am sure of, though, is that these 10 ideas are effective for any hiring manager who wants to hire the very best — and avoid making any future $100,000 mistakes. 

To receive blog posts like this one straight in your inbox, subscribe to the blog newsletter.

Topics