5 Things you Need to Know BEFORE hiring Employees [watch before you interview]

Summary

In this video, Laila Hormozy, Co-SEO of Acquisition.com, addresses the common struggles of hiring for businesses with revenue between $3M-$10M. She emphasizes the importance of avoiding hiring pitfalls such as letting likeness cloud judgment, hiring 'coaches not players,' ignoring red flags, recruiting from a limited pool, and hiring for potential rather than practical experience. Laila's insights are drawn from her extensive experience in HR and aim to help businesses scale effectively by making better hiring decisions.

Takeaways

• 😀 Laila Hormozy, co-CEO of Acquisition.com, aims to help businesses scale from $3M to $10M in revenue for free through her channel.
• 🔍 Laila emphasizes the importance of effective hiring, as it's a significant challenge for many businesses, especially those in the $3M to $10M revenue range.
• 🙅‍♀️ Hiring should not be based solely on personal likeness, as it can blind decision-makers to a candidate's unsuitability for the role.
• 🏈 Avoid hiring 'coaches, not players'; candidates should be ready to actively contribute rather than just supervise others.
• 🚩 Ignoring red flags during interviews can lead to hiring unsuitable candidates; trust your instincts and dig deeper if something feels off.
• 🌐 Diversify your hiring pool to avoid groupthink and to foster a range of perspectives within the company.
• 💡 Hiring from the same 'incestuous pool' of people can stifle growth and innovation due to a lack of fresh ideas and perspectives.
• 🚫 Avoid the temptation to hire based on convenience or a need for quick filling of positions, as this can compromise the quality of hires.
• 🛠️ Hiring for potential can be risky; it's generally better to hire candidates with practical experience and proven track records.
• 📈 Laila's insights are based on her extensive experience, having made many hiring mistakes in her early ventures and learning from them.
• 💼 The video is intended to educate and help business leaders avoid common hiring pitfalls, drawing from Laila's authentic experiences and lessons learned.

Q & A

What is the primary goal of Laila Hormozy's channel?

The primary goal of Laila Hormozy's channel is to help businesses grow their revenue from wherever they are currently at to between three to 10 million dollars for free.

What is the main topic Laila Hormozy discusses in the video script?

The main topic Laila Hormozy discusses is the challenges of hiring the right talent, especially for businesses with revenues between three to 10 million dollars.

Why does Laila Hormozy spend most of her time on HR?

Laila Hormozy spends most of her time on HR because she considers herself an operator CEO and believes that hiring the right people, especially for customer success roles, is crucial for the company's performance.

What is the significance of hiring the right people for leadership roles in a company?

Hiring the right people for leadership roles is significant because it directly impacts the company's culture, growth, and overall success. The right leaders can either propel the company forward or hinder its progress.

What does Laila Hormozy mean by 'coaches, not player coaches'?

By 'coaches, not player coaches,' Laila Hormozy refers to individuals who have been in positions where they only coach others but do not actively participate in the work themselves. In smaller or entrepreneurial businesses, she emphasizes the need for people who can both coach and actively contribute to the work.

Why is it dangerous to hire someone based on likeness?

Hiring someone based on likeness is dangerous because it can blind you to the person's shortcomings and qualifications for the job. It can lead to overlooking critical requirements and hiring someone who may not be the best fit for the role.

What are 'red flags' in the hiring process, and why are they important to consider?

Red flags in the hiring process are warning signs or concerns that arise during an interview or assessment of a candidate. They are important to consider because they can indicate potential issues or misalignments that might affect the candidate's performance or fit within the company.

Why does Laila Hormozy advise against hiring from the same 'incestuous pool of people'?

Hiring from the same pool of people can lead to a lack of diversity in thought and perspective within a company. This can hinder innovation and growth, as everyone may have similar ideas and approaches, limiting the company's ability to adapt and evolve.

What is the downside of hiring for potential rather than practical experience?

Hiring for potential without practical experience can be risky because it may require significant time and resources to train the individual. In many cases, businesses need people who can hit the ground running and contribute immediately, making practical experience more valuable.

What are the key takeaways from Laila Hormozy's discussion on hiring mistakes?

The key takeaways include not letting likeness blind you, avoiding hiring 'coaches, not player coaches,' not ignoring red flags, diversifying the hiring pool to avoid groupthink, and prioritizing practical experience over potential when hiring.

How does Laila Hormozy's experience with hiring influence her advice on the subject?

Laila Hormozy's advice is heavily influenced by her extensive experience in hiring, having interviewed thousands of people and made numerous hiring decisions. Her insights are based on the lessons learned from both her successes and mistakes in the hiring process.

Outlines

00:00

😀 Introduction to Channel and Hiring Challenges

Laila Hormozy, co-SEO of Acquisition.com, introduces her channel and its goal to help businesses scale from $0 to $10 million in revenue. She discusses the prevalent issue of hiring difficulties faced by her portfolio companies, which has become a significant focus for her. As an operator CEO, she spends considerable time on HR and customer success, emphasizing the importance of hiring the right people for critical roles. Laila shares her experience and insights on common mistakes made during the hiring process, especially for businesses with revenues between $3 to $10 million, where leadership is often lacking or misaligned with company culture.

05:01

🤔 The Pitfalls of Hiring Based on Likeness

The speaker identifies the first major mistake in hiring as letting personal likeness for a candidate cloud judgment. She recounts her own experience of hiring someone she liked but wasn't qualified, which led to problems. Laila warns against prioritizing being friends with a candidate over their qualifications for the job. She observes that this mistake is common in her portfolio companies and can lead to hiring people who do not meet the necessary requirements or cultural fit, ultimately hindering the company's success.

10:02

👷‍♂️ Avoiding the 'Coach, Not Player Coach' Hiring Trap

Laila discusses the second common hiring mistake: recruiting individuals who are 'coaches, not player coaches.' She explains that in smaller or entrepreneurial businesses, it's crucial to hire people who are willing to get hands-on and not just oversee others. She contrasts this with individuals from larger companies who may be accustomed to a more supervisory role. Laila emphasizes the importance of hiring people who can lead projects and contribute actively to the business, rather than just manage teams.

🚫 Ignoring Red Flags During the Interview Process

The third point Laila addresses is the tendency to ignore red flags during interviews. She advises against overlooking concerning signals or gut feelings that a candidate might not be a good fit. Laila stresses the importance of heeding these instincts and either investigating them further or deciding not to hire the candidate. She shares that this is a skill that improves over time and is crucial for making better hiring decisions.

🔄 The Dangers of Hiring from a Limited Pool

Laila's fourth point is about the detrimental practice of hiring from a limited or 'incestuous' pool of people. She argues that this lack of diversity in hiring can stifle business growth due to a lack of fresh ideas and perspectives. Laila criticizes the tendency to hire within the same community or friend group, which can lead to groupthink and a stagnation of innovation. She encourages businesses to seek out a broader range of talent to foster a more dynamic and successful company.

🚀 Hiring for Potential vs. Practical Experience

In her final point, Laila discusses the mistake of hiring for potential rather than practical experience. She acknowledges that while potential is important, it's often more beneficial to hire individuals with a proven track record in the role. Laila advises that unless you have the time and expertise to train someone up, it's better to hire someone who can hit the ground running and contribute immediately to the company's success.

Keywords

💡Hiring

Hiring refers to the process of recruiting, interviewing, and appointing suitable candidates for job positions within an organization. In the video's context, it is a central theme as the speaker discusses the challenges faced by CEOs in finding the right talent for their companies. The script mentions hiring as a significant time investment for the speaker, who is heavily involved in the HR process.

💡Revenue

Revenue is the total income generated by a company from its business activities. The video focuses on helping businesses scale from a revenue of three to ten million dollars. The speaker uses revenue as a benchmark to identify the target audience and the specific challenges they face in the hiring process.

💡Likeness

Likeness in the context of the video refers to the personal affinity or connection one feels towards another person. The speaker warns against letting personal likeability influence hiring decisions, as it can blind one to a candidate's qualifications and potential shortcomings, as illustrated by the speaker's own past experience.

💡Player-Coach

A player-coach is an individual who is capable of both performing tasks and guiding others to do the same. The video emphasizes the importance of hiring 'player-coaches' rather than individuals who are only adept at coaching. This concept is critical for small to mid-sized businesses that require hands-on involvement from their leadership.

💡Red Flags

Red flags are warning signs or indicators that suggest potential issues or problems. In the hiring context presented in the video, red flags might appear during interviews and should not be ignored. The speaker advises that if something feels off about a candidate, it is crucial to investigate or potentially pass on the candidate to avoid future issues.

💡Diversity of Thinking

Diversity of thinking refers to the presence of varied perspectives, ideas, and approaches within a team or organization. The speaker passionately argues against hiring from the same 'incestuous pool' of people, as it can lead to groupthink and stifle innovation. The video encourages seeking a range of viewpoints to enhance decision-making and business growth.

💡Potential

Potential in the video script refers to the latent abilities or qualities that a candidate may possess but has not yet demonstrated through practical experience. The speaker cautions against hiring solely for potential, as it may lead to inefficiencies if the candidate requires extensive training and guidance that the business cannot afford.

💡Entrepreneurial

Entrepreneurial describes the qualities associated with starting and running a business, such as initiative, risk-taking, and innovation. The video discusses the unique hiring challenges faced by entrepreneurial businesses, which often require individuals who can wear multiple hats and contribute actively to the company's growth.

💡Talent Acquisition

Talent acquisition is the strategic process of attracting, identifying, and hiring the best candidates for a company. The speaker mentions the importance of learning the skill of talent acquisition to source the best talent globally, rather than relying on familiar networks or communities.

💡Culture Fit

Culture fit refers to how well a potential employee aligns with an organization's values, mission, and work environment. In the video, the speaker implies that while culture fit is important, it should not be the sole criterion for hiring, and qualifications and skills must also be considered.

💡Operational Role

An operational role involves managing the day-to-day activities and processes within a company to ensure efficiency and productivity. The script discusses the difficulty of finding qualified candidates for high-level operational roles, emphasizing the need for a balance between skills, experience, and cultural fit.

Highlights

Introduction of Laila Hormozy as co-CEO of Acquisition.com, a portfolio business with 85 million in revenue.

The channel's goal to help businesses scale from 3 to 10 million in revenue for free.

Discussion on the challenges of hiring and its significance in the growth of businesses.

Emphasis on the importance of hiring the right people for customer success and leadership roles.

The role of an operator CEO in being heavily involved in HR and customer success.

Mistakes made in hiring due to likeness, overlooking qualifications.

The danger of hiring 'coaches, not players' from larger companies into smaller entrepreneurial environments.

The necessity for new hires to be hands-on and capable of leading projects.

The importance of recognizing and addressing red flags during the hiring process.

The pitfalls of hiring from a limited, similar-minded pool, leading to a lack of diversity in thought.

The negative impact of 'incestuous hiring' on business growth and innovation.

Advice against hiring based on potential rather than proven practical experience.

The preference for hiring individuals with a clear understanding of their first 30-90 days on the job.

The video's aim to share personal hiring experiences and lessons learned to help others avoid common mistakes.

Encouragement for viewers to learn from Laila's mistakes and apply the insights to their own hiring practices.

Invitation for viewers to share their thoughts and experiences in the comments section.

Transcripts

what's up welcome my channel my name is

laila hormozy co-seo of acquisition.com

which is portfolio businesses that does

about 85 million period revenue and my

goal with this channel is really to help

you get from wherever you're at to

between three to 10 million in revenue

for free and so that being said 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 um 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

you know 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 think i've had you know three

different ceos come to me ceos and ceos

you know just struggling with hiring for

certain positions in the companies right

now and i wanted to share this because

you know i was actually going to give

personal feedback in a video 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 continue

to send us candidates that you know 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 uh 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 you know hiring helping people

hire ceos 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 in a

video with one of the ceos and i felt

like chip 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 would say is

like untraditional or like these are

just my authentic thoughts about like

where i see people messing up and 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 turn 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 you've seen my other

videos like i've made so many mistakes

in my first company gym launch and

prestige labs like you know i just

completely that up if you look at

my video that's uh my biggest mistake i

talk about it in there but that being

said you know i've made it a mission to

like really keep up with the stuff and

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 and 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

um it could probably be less than that

it could probably be more than that

that's just typically what i see around

that size 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

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 gonna be the 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 with this one ceo

you know like why do you not like these

people like because you like them too

much dude they don't even

qualify for the role like they don't

even have any of the skills required

they don't even have 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 want to let likeness

blind you

now the second one

is that a lot of the times in businesses

that are smaller or entrepreneurial etc

you know you want to 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 can 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 got into

the habit of not doing and coaching but

just coaching any 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 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 i talked 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 need to 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 even have a change

management protocol we're doing five

million a year like i need you to like

do all this 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

not 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 you

know okay a coach in in traditional

football for example he's never going to

get on the field because a player is

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 players hurt and they also sometimes

need to be in the game no matter what

and so that's something that can't be

compromised a lot of times when

first-time founders are interviewing

more experienced people and i've made

this mistake guys i'm telling you this

because i've literally done this like 10

times you know i interviewed someone i'd

be like you sound amazing this is great

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 gonna need to hire

three people to do that i'm like

what

you know like i'm doing it why the

can't you if there's people like that

you know you kind of it's a lot of times

if you set the expectation on the

forefront you're like i'm gonna need you

do all this so like you're not

gonna do it like you know you're just

not gonna stay here you're gonna end up

getting fired immediately then they're

like oh okay you know and like they get

it you know 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 people and so

that's why i'm making this video it's

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 it's like a muscle you have to

train ignoring red flags here's the

thing i used to interview people and you

know they'd say something that bothered

me or like they'd be saying in the

interview that i was like i feel like

that's gonna become an issue but i'd be

like oh but everything else was so good

like

just because i sensed one thing wrong

doesn't really mean anything the

interview is the best you're gonna get

from this person it's like the absolute

best you're gonna get that is that is

the 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 this 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 gonna try

for you so if you've got red flags in

the interview i would say that either

they're not a very good you know

interviewee or it's just not the right

person with a 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

override my instinct that it's not the

right fit

or that there's something else there or

that doesn't feel right or that i need

to dig more into that red flag and often

times 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 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 ideas

and perspective there's no diversity of

thinking and i've like the reason i'm so

passionate about this guy's like i

specifically have one friend hires every

single person from the same community of

people and 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

and hr they're all just sales and

marketing people it's because you're

hiring from these communities that are

sales marketing and so like your

business is just stuck because of all

this these people because you're hiring

from the same bullets 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 etcetera

i'm like cool we're gonna go post here

and post here and then we'll get a

recruiter for this one and they're like

no but like i have communities i can

post in these groups so i can finally

i'm like just stop

seeking to control it's like this need

for control over like knowing that at

least you know what you're gonna get and

i think that's why people do it like i

think it's this need to know it's like

well at least i know that this person

will be like a sixty-five percent like a

six out of ten but like i'm sure they're

six out of ten they're not a one out of

ten they're not 10 attempt but they're

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

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

you're watching my channel right now and

maybe you have an e-learning or a

coaching business coaches yes hiring

from a 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

uh you know controllers no

this is one i just banged 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 in 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 my own we've hired

too many people from 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's

the best in this community to hire it's

like who's the best in the 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

see 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

like i can't tell you like friction is

good having different opinions is good

it's studies all over have been done

about this like 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 feeling

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 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

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 and we're interviewing

someone and 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 of 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 someone who can tell

you what their first 30 69 days looks

like not the other way around and so i

hope that these five tips were useful

for you like if you're high right now i

say this guy's 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

useful 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 and so let me know what

you think in the comments i hope this is

useful for you and i will see you on the

next one