Timing In Hiring
Mistakes in timing can be one of the key issues in executive management according to the best executive search firm. Being too slow to fire and too fast to hire can influence outcomes, performance, and the bottom line. It’s human nature to want to hold onto people and hope they’ll change, as well as to succumb to the pressures of timelines, first impressions, and hire too quickly.
How long do you wait to terminate? The decision can be impacted by a variety of factors, including deadlines, agreements, and expectations. An executive within an organization carries a great deal of significance, their behavior and actions influence the employees. Knowing when to fire and when to tolerate has a significant effect on business performance. Consider your current margins and multiples: if your business has a 20% EBITDA margin and 10X multiple, and you’re tolerating an executive who delivers $500K less in revenue than an “A” player, that’s costing your business $1M in enterprise value annually. They’re stealing from the company! And you might as well be too for not doing anything about it!
Employers are often under urgent pressure to fill a position but need to make sure they are getting what they need in a new hire. Either a key person resigns, a board of directors complains about an executive’s performance, new contracts are won, etc. Speed sometimes sacrifices quality. Scrambling to hire someone too quickly can result in these mistakes:
- Considering too few people – Finding the best person for an executive role sometimes requires casting a wide net, to ensure you’ve looked at many qualified people with differing backgrounds.
- Inadequate position profile – Many companies pull the last version of the job description out of the file and hire to that. But your requirements probably have changed, and you have fresh objectives. You must take the time to “see the end before you begin.” Consider this an opportunity to develop clear expectations and objectives for the new hire and put in the effort to create a comprehensive description. This will result in a positive, complete understanding for the hire to know what they need to do to fully perform.
- Inadequate evaluation – Most executives look good in a suit, have a firm handshake, and can make eye contact. But can they produce the results you need? Rushing to hire means not completely figuring out whether the person can do the job. Utilizing standardized and thorough interview approaches, meeting with the candidate in different settings and observing their behavior in circumstances outside the interview can better prepare you for who you’re selecting.
- Dispensing with references – We’ve heard from many executives they were hired by their boss’s intuition, and no references were checked. It is important to understand why people left prior jobs, and how they performed. An understanding of the candidate goes beyond bulleted accomplishments and quick elevator pitches, it is created from talking about work history in detail, reviewing strategy and approaches, and how the candidate has been successful.
On the retention side, we see many companies holding on to poor performers for too long. They may have failed to document poor performance, and fear that terminating someone without such a paper trail could be risky. Yet they consider themselves to be “at will” employers. Many companies fear lawsuits or costly severance packages when they have to let someone go. And they sometimes feel that having a “B” or “C” level player in the job is better than no one, or better than the unknown. When it comes down to making a decision to terminate, most employers find that it goes better than expected – their fears prove unwarranted. Most poorly performing executives know that they aren’t doing well. When terminated, most have realistic expectations, and few have the stomach to try finding an attorney to take the case. They are happy to move on and try elsewhere. And, the employer almost always benefits from making the new hire – and hopefully a move to an “A” player as soon as possible.
Let us know if you’re interested in discussing how our services can sharpen your hiring initiatives for the New Year and use a dynamic approach to hiring. From developing a position profile to creating a formalized interview process for your hiring team, BOB Search is your strategic partner for executive hiring.