Starting a Business? Avoid These 4 Costly Hiring Mistakes

Employees are the most important asset of every business. Whether it’s running your day-to-day operations, speaking to customers, or brainstorming growth ideas, you need skilled employees to take your company forward.

Although it’s always hard to find good employees, when you’re starting out, it’s possible to make some rookie mistakes that can prove very costly in the future.

Here are 4 hiring mistakes that you should avoid at all costs, when you’re starting a business.

Hiring because you can

Most businesses make the mistake of hiring new employees, the moment they see cash flow or get funded. They feel that business is growing and it’s time to put a team in place, or expand their team and take their business to the next level.

Take a step back. Ask yourself what roles & responsibilities you need to hire for. Can your existing team handle it? If you hire new employees, will they reduce your present team’s workload? If so, what will be the new roles & responsibilities of your current team members?

Just because your business is booming, it doesn’t mean you need to hire more employees. Analyze how long your employees are working, and see if you can make the existing processes more efficient, instead of adding more moving parts to your business.

New employees will mean additional responsibilities such as training and onboarding, as well as additional expenses such as office equipments (laptops, tables, chairs). You’ll also need to appoint someone (or yourself) to manage new employees to ensure that they’re focused and delivering value to your business.

So hire only when you absolutely have to.


Not defining the roles & responsibilities clearly

Be clear about what your new employees will do once they join your business. Many companies conduct interviews and onboard new employees only to leave them confused about what they’re supposed to do on a day-to-day basis.

This can harm your business in 2 ways:

  1. Instead of increasing your efficiency, the new employees will be a drag on your resources. Also, your current employees will need to spend more time training & managing them. This will only reduce their productivity.
  2. It will hurt their aspirations, make them demotivated and adversely affect your work culture.

Think through your requirement and write down the job description on a piece of paper. Be as detailed as possible. Make a list of the key responsibilities an employee in this position will have to carry out, and the skills required to perform them successfully.

Go a step further, and create an employee persona – their age group, demographic, location, qualification, interests, achievements, work experience and more.

Once you are clear about the kind of person you want to hire for your business, you can come up with the right hiring strategy and interview questions. For example, if you know you want to hire web developer, you would go to Stackoverflow. If you want to hire a content marketer, you would go to ProBlogger.

You’ll also be able to design a more effective training process to help them give their best.


Hiring generalists

When you’re starting a business, it can be tempting to hire generalists for their wide range of skills. However, generalists tend to do better in managerial roles and should be hired only at a later point when your company has a big enough team that needs to be managed.

When you’re starting a business, it’s important to hire specialists who have in-depth experience in their area of work, and are at the top of their game. For example, if you want to drive more website traffic, then you should hire an SEO expert or a Social Media marketer, instead of a generalist such as online marketer.

Their in-depth expertise will make it easy for them to quickly diagnose problems and come up with solutions, that will help your business grow faster. For example, if your website doesn’t rank well on Google, an SEO expert will be able to quickly tell you what’s wrong with it and what you need to do, compared to an online marketer. Also, they’ll know the best practices required to deliver optimal result for your business.


Hiring star performers

Sometimes, you’ll come across candidates who have an impressive resume, a stellar work experience and who sail through your interviews. Don’t hire such candidates if your business doesn’t need them at the moment, no matter what they promise to bring to the table.

For example, you may meet a candidate who has led a team of 20 people. However, if he doesn’t know how to grow your team of five to 20 people, then he won’t be a good fit. They may be effective a couple of years down the line, when your business has grown substantially, but they won’t be useful right now.

Star performers are used to working in a highly leveraged environment. What do I mean by a leveraged environment?

They have worked in a reputed organization that people are dying to work for. So there is no shortage of job applicants and it’s easy to grow your team. All the processes are in place and well documented. The company is already making tons of revenue so efficiency is not as big a requirement as in a small business.

When you start a business, you need people who can work in the trenches.



Hiring the right employees can drive your business in the right direction, give you immense satisfaction and the opportunity to work ‘on’ your business, instead of working ‘for’ your business. Avoid the above mistakes and you’ll be able to hire people that can take your business to greater heights. The key is to be clear about your requirements, find specialists who have done it before and empower them to be successful. 


This guest post is courtesy of Sreeram Sreenivasan. For more than 8 years, Sreeram Sreenivasan has worked with various Fortune 500 Companies in areas of Business Intelligence, Sales & Marketing Strategy. He regularly writes at Fedingo about a wide range of business growth & marketing topics. He’s also the Founder & CEO of Ubiq BI, a cloud-based BI Platform for SMBs & Enterprises.


CBNation helps entrepreneurs and business owners succeed with visibility, resources and connections. CEO Blog Nation is a community of blogs for entrepreneurs and business owners. Started in much the same way as most small businesses, CEO Blog Nation captures the essence of entrepreneurship by allowing entrepreneurs and business owners to have a voice. CEO Blog Nation provides news, information, events and even startup business tips for entrepreneurs, startups and business owners to succeed.

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