Hiring a great group of talented individuals is on the top of every entrepreneur's to-do list. But when hiring for the first few times, it can be difficult to make the choices that will lead to a cohesive team.
To find out the most common mistakes young entrepreneurs make when hiring, we asked a panel of founders from Young Entrepreneur Council the following:
Q. What is one thing many entrepreneurs get wrong when hiring for the first time?
1. Hiring Just for Talent
Your first few hires set the culture tone of your company. I've learned through experience that hiring people just for their talent and not their teamwork abilities can severely jeopardize a company's mission. The common test is to see if you can withstand hanging out with this person for multiple hours beyond the typical 9-to-5 gig. If you can, perfect. If not, that can throw off other teammates as well. – Kenny Nguyen, Big Fish Presentations
2. Not Having an Employment Agreement
An employment agreement is critical for two reasons: 1) It sets clear, transparent expectations about your relationship, and 2) It protects both parties if there is a dispute down the road, with reference to IP, equity, compensation, etc. In startups, many employee or contractor relationships evolve informally, but it's still extremely important to "paper" the relationship. – Basha Rubin, Priori Legal
3. Hiring Someone Just Like Themselves
Many entrepreneurs make the mistake of focusing solely on hiring early employees that will amplify their own skills and personality, essentially seeking clones of themselves. The smartest entrepreneurs look for folks who will challenge their assumptions, teach the organization new skills, and broaden the intellectual diversity of the team. – Kristian Andersen, KA+A
4. Not Firing Fast Enough
Many entrepreneurs don’t fire fast enough. There is no magic secret to hiring, and it’s impossible to really know how great (or terrible) someone will be inside your organization until he/she is actually there. But once you know the hire is wrong, often people don’t fire fast enough and that’s a huge mistake. – Jess Levin, Carats & Cake
5. Classifying New Hires Incorrectly
Many entrepreneurs will want to classify early hires as independent contractors and not bring them on the employee payroll in order to avoid dealing with withholding, benefits, and employer taxes. While some early hires may be correctly classified as independent contractors, most are truly employees and need to be accounted for as such -- failure to do so can raise real issues with the DOL and IRS. – Peter Minton, Minton Law Group, P.C.
6. Not Constantly Hiring
Our mantra at CHHJ is to hire slow and fire fast. We also say “always be hiring.” Most entrepreneurs look at hiring as an event, but it's really an ongoing process. Most entrepreneurs look for the quick fix when hiring because they’re so busy with everything else and so they end up making the wrong decision. – Nick Friedman, College Hunks Hauling Junk
7. Filling a Need Instead of Adding Talent
Too often as entrepreneurs, we're focused on getting things done as quickly as possible. When the team has a problem, we run as hard as we can to solve it by any means necessary. But this is a mistake. The most valuable part of an early-stage company is its team. So when making your first hires, focus on finding the most talented folks who also align with the culture, not the quickest hires. – Brewster Stanislaw, Inside Social
8. Underestimating Value and Culture Alignment
The first time you hire, you usually focus on technical skills and assess the candidate purely on experience. However, you quickly realize that working well with someone as part of a team requires cultural alignment. You have to assess whether or not they have the same values as the company. – Randy Rayess, VenturePact
9. Lacking Foresight About Candidates
The practice of hiring folks based off of previous performances and achievements is probably the gold standard for most industries. However, for entrepreneurs especially, it’s more important to hire based on potential for success in the specific job they’re interviewing for. Reason being, not all skills and accomplishments can be translated directly from old to new contexts. – Firas Kittaneh, Amerisleep
10. Not Taking Culture Fit Into Account
A candidate could be the most qualified person in the world for your role, but if he or she won't fit in with your company, it won't work out. Understanding what kind of environment candidates have flourished in in the past, and what kind of setting they wouldn't enjoy, are important to identify upfront. – Phil Dumontet, DASHED
11. Hiring Based on Charisma
Many entrepreneurs make the mistake of hiring based on the individuals that are the most charismatic. Make sure you do a multi-interview process and have potential new hires do homework that is required for obtaining a new position at your company. This helps ensure that you know the quality of work these individuals produce and their true interest in working for your company. – Michael Spinosa, Unleashed Technologies
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