HR & Leadership

So You Made a Terrible Hiring Decision. Here’s How to Fix It.

March 24, 2021

Without fail, every week I speak to 5–10 startup founders who are dealing with one of these two painful situations:

  1. They’re going through the process of parting ways with the wrong VP of Sales or the wrong enterprise salespeople
  2. They’ve recently mis-hired, they’re feeling the negative impact, and they’re fighting like hell to make sure it doesn’t happen again

For either one, the bottom line is that the cost of a bad hire is significant.

The costs of a bad hire

The good news is that it doesn’t have to be this way. I’ve actually made it my life’s work to show you how to avoid disaster.

I’ve talked a lot about the hidden costs of a bad sales hire. This time around, I’m breaking down what to think and prioritize before disaster strikes.

Sales isn’t one-size-fits-all—it ranges from simple cold calls to multi-million dollar deals that take years to close. Different skill sets and traits translate differently depending on the role.

Related read: Founders Shouldn’t Hire a VP of Sales—Here’s Why

So, it’s critical to understand what’s required to thrive in your business, with your buyers, at your stage, along with all the work needed to be successful—and then map the right hire back to this with an interview process that supports it.

It feels heavy and slow up front, but it’s critical to take the time to understand the needs of your startup to make sure you nail the hire the first time around.

That said, here are a few tips to prevent a costly mis-hire:

  • Use a hiring scorecard (check out my scorecard methodology and a downloadable template).
  • Develop a bulletproof hiring process that celebrates candidate experience
  • Understand what will make this hire succeed at your startup and hire the right people based upon the real needs of your business—not what you read somewhere else or via advice that’s not applicable. The more specific you can be, the more it will empower you to make the right hiring decisions.
  • Employee engagement and customer engagement are key. Spend time with your team and buyers to understand their needs and potential blindspots. When you take care of your people, they’ll take care of you. Seeking to understand is where this starts.

If you’re a startup that’s realized you’ve hired the wrong person, here are five ways to minimize the costs and pain that comes with it.

1. Don’t try to force a bad fit

Know when to cut your losses and move on. I’ve seen far too many founders, co-founders, sales leaders, and other executives hold onto hope that their bad hire will turn things around, only to dig themselves deeper into the hole.

We recently worked with a founder who came our way after mis-hiring a VP of Sales for the third time in a row. Each time he put his head in the sand for a longer period of time because he was embarrassed, afraid, and horrified that he was in the same position. In his mind, something was better than nothing.

We spent a lot of time talking about his interview process, what he learned, the signs, and the fact that business not only suffered longer than it needed to because of the mis-hire, but because he refused to take meaningful action.

When we got involved, he had kept the VP of Sales on for two quarters longer than he should have after a 26-month-long rollercoaster ride of lost business, hemorrhaging cash flow, and a sales team that was churning. He’d been leading the sales team while running the company for the last quarter, and as a result the business wasn’t where it needed to be.

Moral of the story: Understand the core issue before you take action. Resist the short-term desire to solve everything quickly, and ask yourself two important questions:

  1. Do you really know what’s going wrong?
  2. Why is it not working out?

There are traits that can be trained and developed and others that can’t. Think “DNA” qualities like a learner’s mindset versus something like industry experience that can be learned. So knowing the difference, and being able to recognize any red flags early, is key.

Tony Hughes talks about the three C’s:

  • Competence
  • Commitment
  • Cultural fit

These skills can’t be trained, aka the “DNA.” So, if your hire isn’t displaying the DNA qualities that are critical to your business, it’s time to evaluate if it can be corrected with a mutually agreed upon action plan—or you need to think about moving on.

If the person isn’t working in this role, is it possible to reassign them to a role where they’re better suited? Don’t write anyone off as a total loss before evaluating all the options.

If you’ve gone through the process of pinpointing what’s missing, communicating it clearly, and nothing is changing, then the longer your wrong hire sticks around, the bigger the negative impact will be for your startup.

Pro tip: If your hiring decision isn’t paying off and it’s time to part ways, focus the conversation on the needs of the business versus the person. Instead of getting stuck on the negative impact, try something like, “We all want to succeed, and we’ve reached a point where that’s difficult to do together.”

2. Have an exit plan

Remember that we’re dealing with humans here. On your leadership team, even if you have a bulletproof hiring process in place, it’s impossible to guarantee that you’ll always make an A+ hire every time.

As Benjamin Franklin said, “If you fail to plan, you plan to fail.”

It’s a good idea to be prepared for how you’re going to deal with a mis-hire if it happens. When it gets tricky and the wrong person is onboard, your employees are going to notice how you and the rest of the leadership team handle the situation.

If you’ve reached the point of no return and you’re convinced that the relationship can’t be salvaged, look for every opportunity to make their transition and departure as smooth as possible.

Your company culture is created and reinforced by the words you use and your actions that back them up. Nobody likes hidden surprises—especially when a bad hire has been made. Regardless of how difficult it might be, lean into the power of having open, honest conversations.

Sitting down with your mis-hire is a powerful way to create an exit strategy that works well for everyone. You can glean important insights for the future job description, learn metrics to pay attention to, and develop a transition plan that gives the team peace of mind while not leaving you scrambling to put the pieces together.

“Your company culture is created and reinforced by the words you use and your actions that back them up.”

The last thing you want to do is let your frustration take over while parting ways. As a leader, you set the example, and what you do ties right back to your company culture and employee engagement. So instead of getting caught up in the blame game, take ownership of the situation and use it as an opportunity to learn and grow to avoid making the same mistake twice.

When you do this, it helps everyone—the wrong person you hired, your team members, your leadership team, and you—move on from it quickly.

Of course, there are always extreme circumstances. If your bad hire is actively damaging your reputation, being unethical, creating a toxic environment, or jeopardizing your buyers, then it’s absolutely necessary to prioritize cutting the cord and creating an action plan from there.

Regardless, having an exit plan means that if you end up making a bad hiring decision you’ll have a framework in place to handle it. Having a plan reduces further damage and cost to your startup.

3. Protect your buyers at all costs

Make no mistake, your buyers hold the keys to the kingdom.

When you mis-hire someone on the sales team, it can wreak havoc on your buyer journey. The last thing you want to do is deal with a customer retention problem or lost opportunities while you’re reconciling a mis-hire.

Stay ahead of the potential damage. Step into your buyer’s shoes and ask yourself how you’d want to be handled. Your buyers must feel seen, heard, and understood.

Once you’ve parted ways with your mis-hire, proactively communicate what this change means for your clients. Let them know what you’ll do to make sure they don’t miss a beat, and get their feedback to consider for what the right candidate might look like in the future.

If you don’t, they may find it hard to trust that you’ll make good hiring decisions in the future, and they might be compelled to work with a competitor.

Taking meaningful action in times of crisis will strengthen your existing partnerships. This is a critical time to go above and beyond to delight your buyers because you care.

Two things you can do to reinforce this:

  • Remember that your buyers’ pain points are always shifting with the market. Now is a great time to reiterate how you can help them solve problems, reach goals, or get better. Reassure your buyers by showing that you’re forward-thinking, well-tuned into their ongoing needs, and can back it up with a plan that makes sense for them.
  • Remember that your buyers are human. Show empathy and care in all your conversations to make sure they feel heard and valued versus talked at (this is not the time to use automation for messaging). Your mis-hire isn’t just about the health of your startup. Put your buyers first and your relationships will continue to prosper.

4. Be honest with your employees

Honesty is the best policy. Plus, it’s a terrific way to create a culture of accountability. When the wrong person is hired, it can be devastating for your team’s productivity and morale. How you respond to this as a founder or executive paves the road for the future.

When employee engagement is high, there’s a sense of camaraderie and cohesion that binds everyone together around a common vision with a solid company culture. Hiring a new employee, especially in a startup, who isn’t working out sends a signal to the rest of your team (and the rest of social media) that your startup might be headed in the wrong direction.

And if they don’t understand what’s going on, or see the forest through the trees, they’re left to their own devices to create stories that are rooted in their perception versus the reality of the situation. When this happens, your retention numbers suffer and referrals dwindle.

“When the wrong person is hired, it can be devastating for your team’s productivity and morale. How you respond to this as a founder or executive paves the road for the future.”

Proactively communicate, take ownership, reinforce your company culture through action, create a safe environment to share feedback, and deliver action plans that create winning outcomes versus getting caught up in damage control because you refused to communicate.

Whatever you do, don’t be silent. During difficult times or periods of change, people will feel quickly disheartened if they feel out of touch. One way to give your team a voice is to create open office hours where anyone can talk to you directly about where they are, what they’re concerned about, and how they need help.

When your employees trust that you genuinely care, you’re looking out for their best interests, and you’re being honest with them, it goes a long way for employee retention.

5. Invest in training and coaching

Sometimes the best defense is a good offense.

One of the most common reasons a new employee becomes a bad hire is because they weren’t onboarded, trained, or coached properly once they signed on the dotted line.

This reinforces the point well:

  1. Companies perceive effective onboarding as improving retention rates (52%), time-to-productivity (60%), and overall customer satisfaction (53%). (Source: Aberdeen Group)
  2. Companies with a standard onboarding process experience 54% greater new hire productivity, along with 50% greater new hire retention. (Source: UrbanBound)
  3. 69% of employees are more likely to stay with a company for three years if they experienced great onboarding. (Source: UrbanBound)
  4. Companies with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. (Source: Glassdoor)

Without a well-trained salesforce, how do you get new business? Simply put, you reap what you sow.

If you don’t build this into your business model, new employees won’t have a framework for success in their new role. This often leads to dissatisfaction, resentment, and poor performance. More red flags.

Prioritize a solid onboarding and training program to lower the risk of your employees becoming costly mis-hires. You’ll save money and time, and your retention metrics will thank you in the long run.

People are everything

The sum of your parts is key. This is especially true for a small business. The success of your startup starts and stops with the people you hire.

By being proactive and investing time into building an effective hiring process, you can reduce the margin for a mis-hiring error.

Disclaimer: Focusing on the right candidates in the interview process, for the right roles, to do the right work that translates well for your startup, reduces your selection to a smaller group of the right candidates. This makes it easier for you and the leadership team to review the profiles you receive (better fit, fewer to review) in the interview process. If you move fast at the expense of intentionality, insert a lot of red flags. Bottom line: You won’t realize the growth that could be.

In the unfortunate circumstance of dealing with a mis-hire at your startup, know there are ways to reduce the damage while setting yourself up to hire right the next time around.

Founder and CEO of Avenue Talent Partners

With more than $100MM in revenue sold, a LinkedIn Insider and Top Sales Voice, Founder, Strategic Advisor, and LP at Stage 2 Capital, Amy Volas is a sales fanatic turned entrepreneur. She was bitten by the startup bug many moons ago and couldn't imagine spending her time anywhere else. She created Avenue Talent Partners to help grow early-stage startups through some of their most valuable assets - executive revenue leaders.