Dateline: Kuala Lumpur, Malaysia
There are few choices in business as important as deciding when to hire someone and when to fire them. Your employees are the lifeblood of your business.
If you have a brilliant idea but incompetent workers, you will never succeed. Conversely, if you have a bad idea but good workers, then you actually have a (small) chance of success.
Often, a “bad idea” merely needs some polishing, or it needs to be presented in a different light or to a different audience. But to do this, you need adaptability and creativity. And no matter how skilled you are as an entrepreneur, at the end of the day, you are just a single person.
This is why knowing how to “hire slow, fire fast” is one of the most important skills you should master when running a business.
As a small operation of a few dozen people, you can’t afford having B- and C-listers. If an employee isn’t helping you, then they’re hurting you – as they’re using space, resources, and money that could be better spent elsewhere.
You need to be equal parts methodical and ruthless in order to succeed.
Hiring Tips to Build a Strong Team
Before we even begin to look to hire anyone, let’s set some ground rules.
Rule #1 – You Cannot Hire Your Clone
Often, we think that finding someone with our exact quirks and outlook is the way to go about it. But that doesn’t usually work out.
Someone with your exact personality won’t bring anything new to the table. Yes, they’ll be able to solve some problems the way you would have, but you’re limited in terms of scope and ability.
Furthermore, if they’re so similar to you, they might start thinking that they know best. As most people have a very high opinion of themselves. It isn’t a major leap to go from following orders to thinking, “Well, he usually agrees with me, so I’ll do it my way and just show him the results.”
You are the manager and you have your skills, you don’t need to duplicate them, especially when the company is small and everyone still knows each other.
Later, when you have a staff of hundreds, then maybe look into duplicating yourself to manage an entirely different sector. Otherwise, you’re just inviting trouble.
Rule #2 – Watch Out for Red Flags
When you’re dating, you might see an odd behavioral quirk in your potential partner. At first, these eccentricities are cute and you learn to live with them. But then many people marry individuals with those behaviors and are somehow surprised and annoyed that marrying them didn’t fix those issues.
Seasons and times change – people though? That’s a much taller order. What you see at first is usually what you get.
The same logic holds true when hiring people.
The whole point of hiring slow is that it allows you to look for these red flags – for much the same reason that, when you go on a first date to a restaurant, it’s worth paying attention to how they treat the environment and the staff.
In other words, by seeing your applicant’s reactions in different circumstances and with different people, you can much better gauge who they are as a person. As even if they’re using a mask, the longer they have to wear it and the more changeable the environment, the more difficult of an act it is to maintain.
Once you start seeing these signs it’s best to pay attention to them, because they’re showing you key insights.
If someone has an attitude problem, is late, has excuses, etc. BEFORE you have even hired them and they’re still trying to make a good impression, imagine what they’ll be like five months down the line!
Save yourself the headaches and just move on. In the age of distributed teams and access to remote workers, you will never run out of qualified applicants.
Rule #3 Do You Even Need to Hire?
Managers often fetishize the idea of growth beyond any other consideration. But this is not the way to go about things.
It’s much easier to stack a pile of bricks than it is to build a house. But guess which one will last longer and has more use?
Furthermore, people inside your team may well be able to expand to new challenges.
As a boss, I like to promote self-development, it’s not only the right thing to do, but it’s also the profitable thing to do.
The reason being is that your workers are already “sitting in the soup”, as it were, they know and understand what it takes to run the business. So, whenever possible, I like to take the staff I have and upgrade them, give them new roles similar to their current ones so they can evolve to meet the challenge.
Offer them the money that you were going to use to hire someone as a raise!
To tell you the truth, I much rather take entry-level staff and level them up over time. In this way, they don’t come to me with bad habits that they picked up elsewhere, and I can mold them to be ideally suited to my specifications.
This is partially why I’ve soured on hiring freelancers for the Nomad Capitalist. They are almost always an external agent that I have to manage, and they break any social contract I’ve tried to create.
Rule #4 Take It Slow, But Not Too Slow
Imagine you’re waiting to go to a nice restaurant, there’s a long line to get in but you’ve heard great things about it. The host tells you that the line will be about half an hour, and you wait there.
45 minutes later, you ask them what’s happening and they simply tell you that it’ll be another half hour at a minimum, as a group of people were having a longer dinner than usual.
No matter how exclusive, no matter what rave reviews you’ve read, your patience has a limit. So you walk off.
The same happens with the hiring process. If someone has options, they won’t stick around to find out whether you were the ideal job if you’re unclear and the process is too long.
Only desperate people with no other options on the table would be willing to wait out a long drawn out process with no end in sight – and you don’t want those, as they tend to be desperate for a reason.
So, the hiring process should be as slow as possible, but no slower.
A reduced speed gives you the chance to see who people are under more normal circumstances. But you don’t want to annoy them.
So, be frank about the different stages, be communicative, and respect the candidates.
The goal is to find a mutually beneficial working relationship in which they bring something new to the table and you bring them under your wing to help them achieve their potential.
How to Fire Someone
I don’t like firing people. In an ideal world, I would never have to fire someone because if you get to this point, then you made a mistake in the past.
But it is what it is. It’s impossible to live your life without making the wrong call every so often. And sometimes it was the right call at the moment, but it had ripple effects far off into the future.
Situations change; people might have their life circumstances upended and you as a boss have to accept that you only have so much effect on someone’s life. Sometimes you simply have to make the call.
I value the worth of loyalty. So, even now, many years and businesses later, deciding to fire someone is often an emotional affair.
But loyalty is a two-way street, it’s a bond that you create by meeting mutual obligations towards each other. If either person starts falling short in their duties, it’s time for a change, on either end.
You cannot allow emotions to cloud good business sense. You’re a company and not a charity.
Pragmatism is the highest virtue that an entrepreneur has and the moment that exceptions start being made, it will begin corroding the good business model you had established.
Imagine that you tried being the “cool” boss and just kept someone that was blatantly underperforming – how would everyone else in your staff feel about the matter?
When mishandled, generosity is perceived as a sign of weakness. And this will be a tacit invitation for everyone else on your payroll that it is fine to be relaxed about their duties because, as long as they perform slightly better than the person at risk of getting fired, they’ll be fine.
This is why you have to be ruthless and set an example. Always remember that everyone is replaceable – especially in the age of remote working jobs and with a population of 7.5 billion people.
Of course, not every infraction is a fireable offense, sometimes a stern warning will do the trick. But here’s a list of reasons to fire someone:
Reasons to Fire Fast
Sometimes people are fresh out of college and, on paper, they look fantastic. They’ve aced every class and they look like they’re about to conquer the world.
But then, when theory becomes practice, they don’t live up to expectations and are simply not a good fit. They may come to the realization that they bit off far more than they could chew and have to reassess the situation.
If you accidentally end up hiring someone like this, don’t be stubborn and cut your losses. Some people might not be a good fit for your company. That’s not a rejection of them as a person, it’s simply having standards for what you’re willing to tolerate.
Any major moral infraction is grounds for dismissal, no exceptions. The reason I hire people in the first place is so I can depend on them and trust in their abilities and character.
However, if I suddenly have to second guess everything that they produce then their utility as an employee is very limited to me.
I learned this from my father. He would always say that there were far more capable people than him in the banking industry. The advantage he had was that people trusted him and preferred working with him over someone who may have been faster but less trustworthy.
I do not want to be associated with people with a tarnished record. I want to maintain the squeaky clean reputation I’ve built over the years.
This isn’t even getting into potential legal problems. Imagine if you realize that someone stole funds, or lied about something important. Are you willing to bet your business that this is the one and only time that they did it, or will ever do it?
When their dishonest ways are eventually caught by someone else, there will be consequences – there might be lawsuits and even criminal prosecution. You shouldn’t be anywhere near when it occurs.
Not only that but if the violation is severe enough, it’s worth calling and working with the authorities so that it’s clear that you had no part in their affairs.
Even without the legal threat, keeping someone with ethical violations under your belt is like keeping a bomb on your desk – who knows when it blows up in your face, but sooner or later it will.
Gossiping or Engaging in Office Politics
Workplaces, even if it’s mainly remote work with a distributed team, often becomes a place for immature people to engage in factionalism and passive-aggressive behavior. It only takes one person with power to start playing favorites and then the backstabbing begins.
Then, once it gets bad enough, there is a very overt power struggle between the different groups. More time is spent trying to defeat their petty rivals than is spent trying to beat the company’s competition.
So, I prefer to nip it in the bud. I take an active role in stopping any such culture from developing.
I want a team that works with each other, where the end result is greater than any of its parts. And this can only happen when the individuals that comprise the teams aren’t at each other’s throats.
No Passion for the Topic
I understand the primary reason people get a job in the first place is because of the money. To think otherwise is silly. This means that part of my role as a manager is to get you as excited about the topic as myself.
Here at Nomad Capitalist, we take great care in trying to get everyone on the same page. We have an onboarding process through which we explain the philosophy, the theory, and everything – and I have even occasionally advised and helped my workers to go offshore and benefit from remote working jobs.
But there is only so much that we can do to get them excited about the projects and ideas we have. If we fail at that, then they might simply not be a good fit for the team.
The problem is that unless you’re doing dull and repetitive factory work, one’s heart needs to be in it to be of any value. Our tasks here at Nomad Capitalist require us to be creative and innovative. Because of this, we can’t just begrudgingly clock in, do our tasks, and leave.
I don’t demand slavish obedience. I like to give people their space to do what I hired them to do in the first place. But if they don’t show any interest, they will never innovate, as their mind won’t ever focus enough on the problems and circumstances to come up with new solutions.
I’d rather not have someone on staff who just does the work for a paycheck. I will get someone who is interested in the topic, instead.
In jobs where you get paid for results, like sales, you often see loud and obnoxious people who may even bully other employees. Most in the office absolutely hate their guts, but they are tolerated because they bring in a lot of money.
This is a major mistake. Not only do these kinds of people bring office morale down by making others dread having to go to work and interact with this person, but you pay for their antics in other ways.
I’ll say it right here, I value my peace and calm more than $10,000 extra every few weeks. I hire people to avoid problems and save me from the headache of having to deal with certain situations.
Hiring someone, and then having many issues crop up because it is completely counter to my goals. It’s partially why I avoid hiring in certain parts of the world – as even if they provide cheap remote work and are a worthy addition to my distributed team, the adaptation period and culture shock are too big of a gap to bridge.
Your Most Important Asset
I could just say “hire slow and fire fast” and leave it at that. I cannot put it in a more concise way.
But it bears saying that your staff is your most important asset at your disposal. No matter how smart you are, no matter how good of a business plan you have – you are still one person, with all the limitations that entails.
You can be stubborn, and think you are going to do this all by yourself, but if you want to grow, you will eventually realize that you need good people on your team.
So, when you are in the process of hiring someone, take your time. Put them through obstacles that will test their adaptability and resilience. Then, if they’re a good fit for the team, take them on.
If, however, somewhere down the line you make the mistake of hiring someone that you shouldn’t have and you realize that the situation isn’t salvageable (or doing so is more trouble than it’s worth), be ruthless.
Do not allow yourself to be led by emotions. At the end of the day, this is a business decision that should be made because it’s the right and profitable thing to do.