Why Hiring the Wrong People Can Kill Your Startup’s Growth

Talent recruitment is the backbone of any business. You can have the best widget in the world to sell. But if you have sales, marketing, and distribution employees who can’t handle their tasks, your business may fail.

Sound recruitment strategies from creating detailed job descriptions and background checks to effective interviewing and probationary periods, are particularly vital to startups. New ventures already face the challenge of catching up to established brands. If your workforce is made up of slackers and malcontents, you could be doomed right out of the gate.

Don’t ever believe that it’s better to have a warm body in a chair even if it’s not the right body. Adopting that philosophy will burn your business over and over. Here are three ways bad recruitment kills growth for companies.

1. It Causes Turnover to Skyrocket

Poor employees are unhappy employees, and they make good employees miserable. How can you discern the good from the bad? It all begins with whom you choose to interview.

The pandemic moved most interviews from in-person to virtual, a trend that probably won’t change for the foreseeable future (if ever). Still, just because you can’t meet face-to-face, that’s no reason to hire the first person who looks good on paper. Virtual interviews can be just as substantive and interactive as in-person ones as long as you have the appropriate tools.

If you’re hiring a software engineer, for example, you can sift through résumés and cover letters to narrow your choices. But during code interviews, the interviewer can see how the candidate codes in real-time. You can get a feel for not only the candidate’s talent and ability, but their workplace suitability as well.

You can hire a great coder, but if they don’t mesh well with the team, your other employees will head for the exits. Then you’ll have to begin the process all over again. In the interim, a team that’s down a player or more will have to work extra to keep things moving.

Bringing a new employee on board always interrupts the normal workflow. Managers and co-workers are less productive when they’re training a new hire. But if you’ve taken all the necessary steps to hire the right person, the return on investment is worth it.

2. It Reduces Revenue

Hiring the right employee means hiring one who becomes fully engaged with your company. How important is that engagement to your bottom line?

Engaged employees are more likely to stay with the company. They are absent less often and more productive than non-engaged employees. It’s that one-two punch that increases profitability and enables growth.

Research has shown that it costs companies up to one-third of an employee’s salary to replace them. Let’s say it takes you a charmed third time to make the correct hire. That means you lost an entire year’s worth of work for that money.

The fact is that bringing the wrong employee on board is a waste of time and energy for everyone involved. Wasted time and energy are a drain on your revenue stream. If you’re a startup, your stream isn’t deep enough to lose a drop.

The cost to companies for disengaged employees is between $450 and $550 billion a year. So make sure you’re putting that job ring on the right finger. Recruiting, vetting, and hiring well-suited people is going to be time and money well spent.

3. It Erodes Confidence in Your Company

Successful companies have earned the trust of all stakeholders, including customers, employees, and investors. Startups, in particular, have to work diligently to earn that confidence. Without it, they won’t succeed.

It’s getting tougher for brands to earn trust from consumers. Celebrity spokespeople, animated characters, even warm grandmothers aren’t doing the trick for a skeptical audience. Social media influencers are, and those influencers include your employees.

Social media makes brands relatable, cultivates loyalty, and allows companies to respond personally to consumers. If disgruntled employees are badmouthing your brand on social media, those complaints will spread like wildfire.

Consider also the high turnover that occurs among new and existing employees when you recruit the wrong people. Customers and vendors like consistency, such as talking to the same company representative every time they call. If they’re forced to deal repeatedly with someone new, they’ll suspect something is wrong with your company.

Consistency and relatability build trust. That confidence must be shared by everyone, including employees. If you build it, they will not only come but stay.

Recruiting the best employees means recruiting those who have the skills you need and can work well with your existing team. Achieving that perfect fit is a challenge, especially in a tight job market. It’s a challenge that entrepreneurs simply must rise to if they want to succeed.

Companies aren’t about a product or a service. At the end of the day, they’re about people. Put the wrong ones to work for you, and you can kiss those dreams of growth goodbye.

Invest in the right people, and everyone can flourish.