According to Forbes Advisor compiled statistics, it takes around six months for a company to break even in a new role and yet 30 per cent of new hires leave within 90 days. This ongoing mismatch between how long it takes to onboard a new employee versus the time it takes for that employee to make a call on whether or not to stay in their new job has associated costs that go beyond wages and salaries. And in the case of a budding startup, employee turnover can disrupt or restrain your company’s momentum.
Hiring perceived top talents is expensive, more so if you lose them
The reasons why employees leave your company are not new. The reality of their role does not meet expectations. Company culture is not a good fit. The onboarding experience is bad or disorganised. Actual experience with management is different from the perceptions generated during the interview process.
There is no shortage of advice and tips on how budding startups should market themselves to get and retain top talents. But it is few and far between that startups are asked to do an honest to goodness assessment of the type of hire that it can realistically afford.
And so, startups join the race to attract and, bluntly put — lure — those they perceive as high performers into the Company, only to lose or fire them shortly thereafter due to mismatched expectations, all of which are at a huge cost to the business. The Work Institute’s Retention report put the replacement cost at 33 per cent of that employee’s annual salary.
Also Read: Unlocking Trends: Jobstreet by SEEK’s Hiring, Compensation & Benefits Report 2024
Avoiding the red flags of a mismatched hire
Startups can avoid the pitfall of hiring the wrong talent by incorporating the following reality checklist in their hiring process:
Do not oversell your company’s culture
There is a very fine line between your actual work culture and where you desire it to be. Be honest and forthcoming. There is no value in selling a culture that does not exist. Instead, talk about the culture you want to build, where you think your company is currently, and why you think they could help you get there. By doing so, you do not mislead the candidate into thinking of a different version of your work environment in their head.
Stick to a predetermined checklist
In Malcolm Gladwell’s Blink, he pointed out that our snap judgments can be both the product and the roof of prejudice and discrimination. Our first impressions can colour the way we interact with the candidate, and we form this in the first few seconds of the interview. Applying the same structured interview process across all applicants can address this bias.
As much as it is tempting to diverge from the checklist when you are having a great time interviewing the candidate, remember that not everybody can walk their talk, and it is your job to find that out early in the interview process.
Acknowledge that past career successes are subjective
Candidates’ proven track record is not always a sure indicator that they will be valuable in your startup. Dig deeper into the type of work environment and work ethic of the companies they were with during the interview process so you can draw common ground with yours. If a VP of Sales candidate has solid experience and consistently delivered results working for matured companies only, they are most likely struggling to craft and execute your strategy to hit product market fit.
Also Read: Hiring for scale: The evolution of your startup’s customer operations team
Communicate clear expectations and description of the role
There is often an unconscious tendency to spend a lot of time sizing the candidate’s capacity, qualifications, and previous work experience, and not enough time is spent discussing what the work actually entails and whether it is something that the candidate can carry out effectively.
Minimise open-ended questions when screening for skill qualifications
Asking questions like “How do you handle situations where you are expected to deliver multiple priorities at a constrained timeframe?” may give you answers you want to hear but does very little to understanding the candidate’s capacity. Instead, you can ask, “Describe to me any previous work experience where you were asked to deliver multiple priorities at a constrained timeframe.”
What may be good for the gander is not good for the goose
The Harvard Business Review points out that as much as 80 per cent of employee turnover is due to bad hiring decisions. Replacing a mismatched hire is a tedious and daunting task. It is not only costly; it also affects the morale of the remaining employees, who will have to pick up the slack while the role is unfilled and who would have to retrain (again) the replacement when they are hired.
As venture funding dries up, Startups should hire the talent that matches their current growth trajectory and their current culture to avoid unnecessary costs associated with a mismatch hire. In the end, there is very little value in hiring someone else’s rockstar employee if the environment in which they thrived is not the same as yours.
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