Talent search company Caliper estimates that hiring the wrong person could cost a company up to $20,000 a year. Some would put that estimate even higher.
Increase your chances of making your next hire a great match for your small business, by avoiding these 25 hiring mistakes:
Editor’s note: watch a video featuring the top 10 hiring mistakes to avoid.
1. Not Writing or Updating a Job Description
How can you know if you’ve found what you’re looking for in a candidate, if you haven’t clearly defined it? Write down the main duties and the skills needed. The act of writing it down clarifies your own thinking. A clear job description also helps the candidate decide if the role is right. And it helps co-workers understand what’s needed in the role (they may not be aware of everything required, and that can lead to workplace tensions especially if someone internally was passed over).
2. Ignoring Previous Mistakes
So, the last employee didn’t work out. Figure out what went wrong before hiring again. Was the last person not up to the job? Perhaps you need to look for more experience. Or was the problem the inability to get along with co-workers? If so, you might want to emphasize team interviewing this time. Whatever happened, avoid repeating the same hiring mistakes.
3. Not Knowing Market Compensation
Recruiting will be a frustrating exercise if you are wildly out of the ballpark on pay. Ask other business owners what they pay. Check out salary surveys and advertised positions on job boards.
4. Failing to “Sell” Your Advantages
Small business owners sometimes feel they can’t compete with larger employers. Get over that. Soft benefits like flexible hours or a friendly environment can make a difference. Emphasize every advantage.
5. Sugarcoating the Job
Persuasively “sell” your company and the career potential — yes. But don’t sugarcoat job challenges. For instance, if your startup has zero procedures in place and you expect the new hire to create those, point it out. Some people aren’t comfortable in such an unstructured environment. It’s better that he or she discover key challenges ahead of time.
6. Not Considering Internal Candidates
The quickest way to demotivate employees is to never promote from within. Employees assume they have no career path. If you must go outside to recruit for a position, take the time to explain why. Emphasize your willingness to promote from within when the situation is right.
7. Not Casting a Wide Enough Net
Online job boards, LinkedIn, even old-fashioned print classifieds can be fantastic ways to find people. Don’t overlook your website, either. Ask around to your contacts in industry groups and the chamber of commerce. And consider whether it might be faster and easier to hire a recruiter to find good candidates.
8. Overlooking Employee Referrals
Get employees engaged in the company’s future by inviting them to refer candidates. Employees who refer a new hire feel invested in that person’s success. Consider paying employees a bonus if their referral is hired. Typical referral bonuses in a small business are a few hundred dollars. Make the bonus payable after the probationary period successfully ends.
9. Neglecting to Phone Screen
Hold a phone interview (or Skype interview) first. It saves time by narrowing the interview pool. Spend 15 minutes talking and if the candidate seems like a possible fit, invite him or her to a full interview.
10. Free-styling the Interview Process
This assumes you have an interview process, of course. Is there a written skills test involved? Will you give a tour? How many people from your company will do the interviewing and in what order? Will you have second interviews? Prepare by re-reviewing the candidate’s resume just before starting the interview. Jot down interview questions so you don’t forget something important.
11. Doing All the Talking
Get the interviewee talking. You’ll learn more and get glimpses into personality and character. Does the person convey a sense of responsible competence? Or is he or she a complainer with a tendency to blame others? To help the candidate relax and open up, find a conversation starter from his or her resume, like a hobby. Ask open-ended questions like “What did you like least about your last job, and why?” not “So you worked for XYZ Company for 3 years, correct?”.
12. Not Involving the Team
The final hiring decision is yours. But you’d be wise to consider input from key team members. Others may spot things you missed. Besides, existing employees may resist a new hire they feel was foisted on them with no input.
13. Looking for Another You
The person you’re interviewing across the desk reminds you of a younger you. This, experts say, is not the right person for your company. You may call yourself your harshest critic, but when he or she is right across from you, you’re more likely to be a little biased. Worse yet, JetBlue CEO and Stanford University professor Joel Peterson says, “An unchecked tendency to hire people just like you can be discriminatory; if it means you’re excluding people because they’re different, that can spell legal trouble.”
JOB OFFER MISTAKES
14. Not Checking References
One of the most common hiring mistakes is discounting references. It’s true today that some former employers are reluctant to say much due to legal reasons. But other references may be candid — or reveal more than they intend. Ask questions about the candidate’s work ethic, accomplishments, duties and reasons for leaving prior jobs. You might just get revealing answers.
15. Failing to Do a Background Check
Everyone deserves a fresh start, sure. But know who you’re bringing into your company. And don’t ignore red flags just because the person is likable. If a background check raises issues such as long gaps in work history, or discrepancies about education and experience, seek explanations until you’re satisfied.
16. Wearing Social Media Blinders
Check the candidate’s social profiles. How would you like to discover, belatedly, that your shiny new hire makes snide remarks about customers on Twitter, barely disguising their identities? (Customers read social media, too!)
17. Choosing a Paper Tiger
An impressive resume does not necessarily equal a great employee. You don’t hire the resume, you hire the person handing it to you. Follow your gut. A niggling uncertainty may be your subconscious speaking. If you’re not sure, bring the person in for another interview.
18. Hiring Unqualified Relatives
A family business is commendable. But for a critical role, such as sales, it can be costly to hire a relative who’s not qualified. It could even jeopardize your company. Nor is it fair to relatives to put them into high-pressure roles they’re not ready for. If you’re committed to hiring green family members, slot them into less crucial roles. Then they can learn the ropes over time.
19. Thinking You Can Train ANYone
Hiring an inexperienced candidate may save money near term. But can your company afford a long learning curve? Besides, some people may never perform satisfactorily no matter how much training they get.
20. Hiring Someone Unenthusiastic About the Job
Your prospect should want, really want, one job … the one you’re filling. David Finkel, the founder and CEO of Maui Mastermind wrote for The Huffington Post, “Ask them, ‘Before we do this final round of interviews with our top three candidates, I want to protect your time and our time, is this a position that you definitely want?’”
21. Hiring Too Fast
Managers sometimes rush to hire out of a feeling of desperation. In the long run it’s better to go with temporary help or limp along short-handed until you are confident you’ve found the right person.
22. Taking Too Long
On the other hand, one of the biggest hiring mistakes is taking an unreasonable time to decide. Don’t let months go by. You’ll lose that candidate.
23. Not Issuing a Job Offer in Writing
Always put the job offer in writing. It avoids misunderstandings and legal problems. The offer letter should be based on standard language approved by an attorney familiar with employment law in your state. The job offer also should state any required contingencies such as passing a background check or drug test.
24. Having a Weak Onboarding Process
You’ve invested a lot of time and money to bring on a new person (in terms of recruiting fees, interviewing time, pay). Take the time to onboard the person properly. Introduce him or her around. Don’t overwhelm with HR paperwork the first day. Don’t use company-speak or internal jargon without explaining it. Encourage existing employees to help the person get acclimated to your company culture.
25. Not Communicating Enough
Your business is not the same as every other business. Do not assume that because a person has experience that he or she needs no training in what THIS particular job involves. Your company’s circumstances may be night-and-day different from the person’s last job. Your new employee can’t magically read your mind to understand your expectations or important company goals. Spend time talking with your new hire to pave the way toward success.
Pitfall Vector via Shutterstock