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

Summary

Leila Hormozi argues that hiring can become a major constraint as businesses scale, particularly when they reach $3 million–$10 million in revenue. At this stage, companies may lack sufficient leadership or have leaders who need development, replacement, or better cultural alignment.

Drawing on thousands of interviews and hundreds of hires, Hormozi shares five common hiring mistakes and practices that have helped her reduce turnover and “false starts.”

Five hiring mistakes to avoid

1. Letting likability outweigh qualifications Enjoying a candidate’s company can lead interviewers to overlook missing skills or poor culture fit. Hire based on demonstrated ability to do the job—not simply because the person is personable or someone you would like to be friends with.

2. Hiring a coach when the business needs a player-coach Smaller and scaling businesses often need senior hires who can both set direction and execute hands-on. A leader who only reviews KPIs, coaches others, or delegates may struggle if the company still needs them to build processes, lead projects, and handle operational work. Set expectations early about the role’s actual scope and the work the person must personally take on.

3. Ignoring red flags Candidates are likely to put forward their strongest effort during an interview, so concerning statements or behavior deserve investigation. Dig into potential issues or pass on the candidate; don’t let the urgency to fill a vacancy override good judgment.

4. Recruiting from the same narrow pool Repeatedly hiring from one community or friend group can encourage groupthink and leave the company short of skills and perspectives. Hiring from a community can make sense for some roles—for example, salespeople who know and believe in the product, or coaches in a coaching business. For roles such as finance, HR, executive administration, and controllership, broaden the search.

Learn to “cold hire” through broader channels and recruiters, even if it initially takes more time and money. The goal is to find the best candidate for the role, not merely the best available person in a familiar network.

1. Hiring for potential instead of practical experience Potential hires may make sense when the founder has the expertise and time to train them. Otherwise, the company may lack both the knowledge and the capacity to develop them. Prefer candidates with relevant experience who can explain how they would approach their first 30, 60, and 90 days. Evaluate what they have actually done, not just what they might be capable of doing.

Operating principles and recommendations

• Treat hiring as a business-critical capability, especially for leadership, operations, customer success, and sales roles.
• Involve experienced interviewers when the company does not yet know what strong performance in a role looks like.
• Don’t let short-term pressure to fill a seat create longer-term performance and turnover problems.
• Build teams with varied expertise and viewpoints. Constructive disagreement can improve decisions, while hiring people who mainly share the founder’s perspective risks limiting the company’s thinking.
• As the company grows, update hiring and recruiting practices rather than relying on habits that worked when it was smaller.

Metrics and context

• Acquisition.com’s portfolio businesses generate approximately $85 million in revenue; the period is not specified.
• The channel’s stated goal is to help businesses grow toward $3 million–$10 million in revenue.
• The hiring guidance focuses mainly on businesses in that revenue range, though similar challenges can arise at higher revenue levels.
• Hormozi says she has interviewed thousands of candidates and hired hundreds, and that her current process produces fewer turnover issues and “false starts.” No specific turnover rate or hiring target is provided.

Presenter

Leila Hormozi, co-CEO of Acquisition.com.