3 Costly Hiring Mistakes that Entrepreneurs Make

You’re excited about your business.  You’re busy every day getting out there and networking and dealing with the latest crisis.  In fact, you may be so focused on the day to day that you are totally unaware of some expensive mistakes you’re currently making or are about to make.  Here are three of the most common and costliest hiring mistakes that entrepreneurs make in their businesses

Mistake #1 – Waiting Too Long to Get Help

Entrepreneurs are used to wearing many hats, rolling up their sleeves and pushing through big piles of tasks in a short amount of time.  However, as your business grows, so does the amount of work and eventually it’s too much for you as a solopreneur to handle.

Here’s a way to look at this.  Let’s say your goal is to be able to draw an annual salary of $150,000 from your business.  If you assume that you work 40 hours a week for 50 weeks, that’s 2,000 work hours in a year.  So dividing your salary goal by this number of hours works out to be an hourly rate of $75.00.

Now ask, why am I spending my time on these $25.00 an hour tasks when I could be spending my time on things that will make me $75.00 (or more!) per hour?

Make a list of tasks you can hire out for less than $75.00 and get started with those that will free up the biggest amount of your time for the least amount of money.

Note that you don’t need to have enough work to hire a full time person or even a person that works some hours for you every week.  Some virtual assistants will start working for you on your business for as little as five hours a month if they can see great upside in what you’re doing.

Mistake #2 – Hiring the Least Expensive Person You Can Find

You’ve heard the expression, “You get what you pay for.”

Nowhere is this more true than when it comes to your employees.  I have personally made this mistake on several occasions within my businesses and it has cost me dearly in both time and money.

Note that this doesn’t just apply to full time people you are considering hiring.  It also applies to part time employees and even service providers who help you with things like website design and hosting, bookkeeping and even business coaches.

You learned how valuable your time is in Mistake #1 above.  Save the comparison shopping for when you’re looking to buy socks or underwear.  Instead of hiring the least expensive person or provider you can find, hire the most expensive person you can afford to really accelerate the growth of your business.

Mistake #3 – Hiring Only Based on Skills Rather Than Behaviors

Traditional interview questions focus on asking straightforward questions such as “What are your greatest strengths and biggest weaknesses?” or “Where do you see yourself in your career five years from now?”

It’s too easy for potential employees that you’re interviewing to answer these questions how they “should” be answered rather than in a way that reflects how they actually conduct themselves in the office.

Consider using behavioral based interviews that solicit responses of how an employee actually acted in specific situations.

To structure your questions, use the S.T.A.R. method which stands for Situation, Task, Action, and Result.

For example, suppose you’re looking for an employee who really knows how to get things done and consistently deliver outstanding results.  A great “S.T.A.R.” question to ask during your interview is:

“How have you gotten around obstacles that prevented you from completing projects?   Describe an obstacle (Situation) that was getting in your way on a specific project (Task).  What did you do (Action) to get around the obstacle and what was the result (Result)?”

You may also be looking for someone who’s great at multi-tasking.  Consider asking:

“Describe a situation in which you were faced with an extraordinary number of competing demands on your time. (Situation & Task)  How did you handle this specific situation and what happened as a result?” (Action & Result)

Your Assignment

If you’re still a solopreneur, do the math, find out what your time’s worth; and start hiring out for tasks, even if only for a few hours a month.

And if you have employees or are about to hire your first full time employee, seek out excellence in terms of qualifications and use S.T.A.R. based interviewing questions to identify the workplace behaviors you need to grow a successful business!