the costs of a bad hire are somewhat bounded, as they can eventually be let go.
This depends a lot on what “eventually” means, specifically. If a bad hire means they stick around for years—or even decades, as happened in the organization of one of my close relatives—then the downside risk is huge.
OTOH my employer is able to fire underperforming people after two or three months, which means we can take chances on people who show potential even if there are some yellow flags. This has paid off enormously, e.g. one of our best people had a history of getting into disruptive arguments in nonprofessional contexts, but we had reason to think this wouldn’t be an issue at our place… and we were right, as it turned out, but if we lacked the ability to fire relatively quickly, then I wouldn’t have rolled those dice.
The best advice I’ve heard for threading this needle is “Hire fast, fire fast”. But firing people is the most unpleasant thing a leader will ever have to do, so a lot of people do it less than they should.
This depends a lot on what “eventually” means, specifically. If a bad hire means they stick around for years—or even decades, as happened in the organization of one of my close relatives—then the downside risk is huge.
OTOH my employer is able to fire underperforming people after two or three months, which means we can take chances on people who show potential even if there are some yellow flags. This has paid off enormously, e.g. one of our best people had a history of getting into disruptive arguments in nonprofessional contexts, but we had reason to think this wouldn’t be an issue at our place… and we were right, as it turned out, but if we lacked the ability to fire relatively quickly, then I wouldn’t have rolled those dice.
The best advice I’ve heard for threading this needle is “Hire fast, fire fast”. But firing people is the most unpleasant thing a leader will ever have to do, so a lot of people do it less than they should.