5 Things You Need to Know Before Hiring Employees | Ep 75 15:23

You've got to either dig in and find out what the heck is going on, or you've got to say, hey, this doesn't seem like it's a fit. We're going to pass on this candidate. And so it's just, it's really a mindset of understanding. How do you create an unshakable business? I lost $100 million in net worth by the age of 28. Now I'm growing acquisition.com into a billion dollar portfolio. In this podcast, I share the lessons I've learned in scaling big businesses and helping our portfolio companies do the same. Buckle up and let's build.

What I want to talk about today is something that has been really top of mind for me because it's been top of mind for our portfolio companies, which is hiring. And specifically, having trouble hiring. And this is something that we at Acquisition.com, we put a lot of time into. It's probably where I spend, honestly, like most of my time. Like I am heavily, like...

I consider myself an operator CEO, and I am heavily versed in HR and customer success. And probably more HR right now than even customer success, because I think it's actually more of a struggle for people. And the reason for that is, if you hire the wrong customer success person, it's going to make customer success suck. And it's like, you basically have to be the one determining who's above all the departments. And so it makes it a function I think is more important by nature. That being said, basically, the struggle is like this week, I

I think I've had three different CEOs come to me, CEOs and COOs, just struggling with hiring for certain positions in the companies right now. And I wanted to share this because I was actually going to give personal feedback to one person who specifically was feeling down about not being able to hire a pretty high level operational role that they were looking for. And they just continued to send us candidates that we weren't impressed with at all.

Because we, a lot of times what we do with the portfolio companies is we actually help them, you know, recruit and then help interview with especially like a managerial role in their company. And the reason we do that is because like, they don't know what good looks like. We do know what good looks like. And so we want to help, you know, kind of mitigate and lessen the mistakes and the pain that they have to pay by, you know, inserting ourselves in the hiring process. So like,

I like hiring, helping people hire COOs, operators, customer success, sales, like all those roles because we know how pivotal they are if you get the right person to where the companies are at. You know, if you're between three and 10 million in revenue, it's usually the issue is that you don't have enough leadership and the leadership you do have either has to go or has to get trained up or they're not really aligned with the culture and where it's going. And so it's a lot of moving parts with the people stuff. And so that being said,

I put together this list because I was going to share it with one of the CEOs and I felt like, shit, I should just make a YouTube content on this because it's obviously helpful for anybody who's at this stage. And really it's my, what I'm seeing is like untraditional or like these are just my authentic thoughts about like where I see people messing up in hiring that I know I've experienced because like guys, like the reason that I'm so good now at hiring and like I'd say I'm so good, like just statistically the people I

hire now, it's like I have way less turnover, false stars, whatever you want to call them. Now, because I've hired hundreds and hundreds and hundreds of people and I've interviewed thousands of people. So like, and I did that because, and I became so diligent about it because, you know, like I made so many mistakes in my first company, Gem Lodge and Prestige Labs. You know, I just,

completely fucked that up. If you look at my video, that's my biggest mistake. I talked about it in there. But that being said, you know, I've made it a mission to like really keep up with this stuff and make sure I'm doing it correctly. So I want to share just the top five things that I've seen be the biggest reasons that people aren't able to hire the right kind of talent. It's usually these aren't like tactical things as much as they are thinking frameworks. And these are specifically businesses between three to 10 million in revenue. It could probably be less than that. It could probably be more than that. It's just typically I see around that size. The

The first one, and this is absolutely the worst culprit possible, is that people let likeness blind them. I don't remember where I heard this. It was a very long time ago. And basically, I had hired somebody who I thought was awesome. He was super cool. I really liked talking to him. Amazing guy. I hired him because I liked

him because I wanted to be friends with him, not because he was qualified for the job. And I see this so often in our portfolio companies, and it's super dangerous because here's the thing, likeness blinds you from all of the bad parts, the downsides of these people. And so like, yes, you want to be able to like the person, but that shouldn't be why you hire them. And so that's the first piece is, are you letting likeness blind you? Are you letting it taint your

your perspective of this person? Are you letting it manipulate in your own mind so that you think this is the right hire and you're going to be more lenient on your requirements because of how much you like this person? I think a lot of people do that. And I'm seeing it right now, like specifically of this one CEO, like why do you not like any of these people? I'm like, because you like them too much, dude. They don't even fucking qualify for the role. Like they don't even have any of the skills required.

Then I'm just gonna have a full culture fit. They're just cool. That's great, you want cool people, but like they need to have the other stuff too. So that's the first one is you don't wanna let lightness blind you. Now the second one is that a lot of the times businesses that are smaller or entrepreneurial, et cetera, you know, you wanna hire experienced people, but what you don't want is you don't want to hire people who are coaches, not player coaches. Okay, so what I mean by that, most people that come from larger companies

and you're going to bring them into your entrepreneurial startup, or you could scale up startup, whatever you want to call it. They come and they've been just sitting in a seat coaching people for a very long time or for years or whatever. They've gotten to the habit of not doing and coaching, but just coaching. In a company that's doing less than 10 million, and I will even say that in some companies doing less than 20 million, and even 30 million, and even up to 50 million, you can't just sit on your ass and tell people what to do. You've got to get in there and get your hands dirty.

And a lot of times I see is, you know, someone brings a candidate to me and they're like, Laila, I'm so excited. This guy's like this operator from this huge company and this, that. I'm like, amazing. He's got a great resume. Let's talk to him. And I talk to him like, what do you do on a daily basis? And it's like, I check the KPIs and I make sure people are doing what they do. And I'm like, okay, but what projects are you leading? And they're like, well,

I mean, I lead the change management. I'm like, we don't fucking even have a change management protocol. We're doing 5 million a year. Like, I need you to like do all this shit over here, do half this person's job and somehow build this team. And so that's something you can't compromise on. It's like, if you're an entrepreneurial business and you're at that point where you're, you know, not an enterprise yet, you can't compromise on that. You cannot, you cannot, there's no room for someone who's purely a coach, not a player coach.

A player coach is someone who's like, okay, a coach in traditional football, for example, he's never going to get on the field because a player's hurt. That's not how it should work in business. It sounds crazy. Like in small businesses, the coach has to go in when the player's hurt. And they also sometimes need to be in the game no matter what.

And so that's something that can't be compromised. And a lot of times when first-time founders are interviewing more experienced people, and I've made this mistake. I can tell you this because I've literally done this like 10 times. You know, I interview someone, I'd be like, you sound amazing. This is crazy. You have all this experience. And they come in, I'm like, here's what I've been doing that it needs you to take over. And they're like, oh, I'm going to need to hire three people to do that. And I'm like, okay.

You know, like, I'm doing it. Why the fuck can't you? If there's people like that, you kind of, it's a lot of times if you set the expectation on the forefront, you're like, I'm going to need you to do all this shit. It's like, you're not going to do it. You know, you're just not going to stay here. You're going to end up getting fired immediately. Then they're like, oh, okay. You know, and like, they get it. But it's just that a lot of times we don't have the perspective to realize that we need to even say those things to people.

Hey guys, a quick break to tell you that if you'd like to see more content from me that isn't just listening to my voice, you can go on and check out my YouTube channel as well. Just search Layla Hormozy and you'll see me in my face. Thanks again for listening and let's get back to the show.

And so that's why I'm making this like, that's the second thing is that people often hire a coach, not a player coach. The third thing, and again, this is probably for any size business, but it's more, it's like a muscle you have to train. Ignoring red flags. Here's the thing. I used to interview people and they'd say something that bothered me or there'd be something in the interview that I was like, oh, I feel like that's going to become an issue. But I'd be like, oh, but everything else is so good. Like,

Just because I sensed one thing wrong doesn't really mean anything. The interview is the best you're going to get from this person.

It's like the absolute best you're going to get. That'd be 120% trying. And so like if you've got red flags in the interview and they're saying things that are throwing you off then, what do you think it's going to be like when they come in? It's like you can't ignore that instinct that you have to like flag those things they say. You've got to either dig in and find out what the heck is going on or you've got to say, hey, this doesn't seem like it's a fit. We're going to pass on this candidate.

And so it's just, it's really a mindset of understanding. The interview is the best it's ever going to get. This is the hardest they're ever going to try for you. So if you've got red flags in the interview, I would say that either they're not a very good interviewee or it's just not the right person for the role. And that's the third thing is like, you just, you cannot ignore these red flags. It's almost like a muscle that you have to continue to train. Like I know that over time, mine becomes stronger and stronger, which is really just not letting my need to fill a position change.

override my instinct that it's not the right fit.

or that there's something else there or that it doesn't feel right or that I need to dig more into that red flag. And oftentimes when it's like, we're so eager to fill that position, I totally get it because like, I feel that way too, that we just like put ourselves in more pain by hiring somebody who's not great for the role. So that's the third thing. Now, the fourth thing is something that is just the absolute worst in my opinion. And I would say is probably like, it's number four, which makes no sense. That's not number one or number five, but I put it as number four when I was writing things down. So here we go.

is hiring from the same little incestuous pool of people. Guys, this is literally what kills businesses is that you hire people from the same friend group, the same pool, the same community, and everyone has the same fucking ideas and perspective.

There's no diversity of thinking. And the reason I'm so passionate about this, guys, I specifically have one friend who hires every single person from the same community of people in their business. They're like, I don't understand why it's not going to grow. I'm like, yeah, because every single person in your business, including you, only values marketing and sales. Even the people in customer success, in finance, in HR, they're all just sales and marketing people. It's because you're hiring from these communities that are sales and marketing. And so your business...

It's just stuck because of all these people because you're hiring from the same pool. It's like this incestuous pool of people that you're hiring from. And this happens a lot. Our portfolio companies come to me and they're like, I need to hire for this role. I need to get this person accepted. I'm like, cool, we're going to go post here and post here and then we'll get a recruiter for this one. And they're like, no, but I have communities. I can post in these groups. I can find the... I'm like, just stop.

seeking to control. It's like this need for control over knowing that at least you know what you're going to get. And I think that's why people do it. I think it's this need to know. It's like, well, at least I know that this person will be like a 65%, like a six out of 10. But like, I'm sure they're six out of 10. They're not a one out of 10. They're not a 10 out of 10, but they're a six out of 10 if I get them from this community. And it's like, but they're not a 10 out of 10.

And so because of that, you're just setting your business up for shit in the long run. It's like maybe in the short term, they might work and they might plug the hole, but they're not going to set you up for success in the long run. Everyone, it's just me group think.

And this goes for if you hire from within your community. This is super common nowadays. There are certain roles. It makes absolute complete sense to hire from your community. I would say the two that are probably most relevant are sales and coaching. Like especially if maybe you have an e-learning or coaching business, coaches, yes, hiring from your community, that makes sense. They have to fit certain criteria, of course, but that probably makes sense. Sales as well. They're convicted in your product. They've used your product. That makes a lot of sense.

finance, HR, executive admins, controllers. No, this is one that I just bang my head against the wall. And that's probably why I'm angry is because there's two people particularly that I'm working with right now. It's like, they just, despite my advice, despite my begging, they continue to hire from within the same communities and the same little cesspools of people.

And because of that, they're setting the business up for disaster in the long run. I've seen this play out so many times. I've had it play out on my own. We've hired too many people for our communities. It's like you need to go out there. And even though it's harder in the short term to hire from platforms, to hire from recruiters, you have to spend more money, you have to take more time, you don't know how to do it, you've never done it before. It is all learnable.

And the great thing about it is once you learn the skill of cold hiring, which is almost the same as marketing, then you can literally get any kind of talent you ever need. And so you don't have to just say, like, who is the best in this community to hire? Like, who's the best in the fucking world to hire? Because you have the skill of acquiring talent. And that is probably...

The hardest thing for people at this level, between 3 and 10 million, especially even at 10 to 20 million, I've seen people do this because they're bringing the habits from 3 to 10 to 10 to 20. And they just continue to pull and pull and pull from these communities and never learn the skill of talent acquisition until one day the founder looks up

and says nobody in this business has an idea that is outside of my own brain that I haven't thought of. Nobody has thought of anything that I haven't already thought of. And that's why I'm really passionate about that one. Just really making sure, guys, like when you're hiring, it's so important to have diversity of thinking. I can't tell you, like friction is good. Having different opinions is good. It's so easy.

all over have been done about this. The more opinions put on a decision in a team, the better the outcome. But if they're all the same opinion, then what's the difference? Why even be there? Why are they even filling the role? They're just going to tell you what you want to hear. And the thing is, is that it's so hard and yet so necessary to have people on your team who tell you what you don't want to hear. You're not going to get that from people who are just kissing your ass all day because you've changed their lives or because

or because you're the kingpin in this community you're hiring from. It's really hard. And so I'm not saying it's 100% of the time, but I'm saying much of the time, this is a huge issue for companies, especially nowadays. And then the last one, number five, is hiring for potential, not for practical experience. And so again, it's,

I think what happens is we get into the interview cadence or interviewing someone that we just like, we're like, I know you haven't done this role before, but you have so much potential. Here's the thing. That's okay if you have time and expertise in the thing that they are filling the seat up. If you're hiring for somebody to fill a role that you are currently doing, that you are currently an expert in, and you have the time to train them,

then maybe it does make sense to hire somebody who has the potential to fill that seat. But 99% of the time, you do not have the time and you don't have the expertise. So you're hiring someone for potential without the know-how of how do I train them and without the time for when do I train them. And so you always want to think like it is preferable to hire for practical experience, somebody who's done the job, somebody who can tell you what their first 30, 60, 90 days looks like, not the other way around.

And so I hope that these five tips were useful for you. Like if you're hiring right now, I say this guys, like it was such a painful thing for me and it continues to be to watch people

fumble with this because of these, it's almost like biases in our brain, right? It's like we're so used to doing things the way that we have when the business is small. And the reality is in order to make the business a good, functioning, big business, we just can't keep the same habits. We can't hire the same way. We can't recruit the same way. We can't pay the same way. And so I hope this video is for you. I have learned this lesson the hard way. Again, like I said in my video, my biggest mistake

I have done this and I have messed it up. And I just, I would like that somebody can learn from my mistakes. I hope this is useful for you and I will see you on the next one.