Stop Hiring Like a Charity: Avoid Friend, Loyalty & Legacy Hires | Growth by Design

Stop Hiring Like a Charity: Avoid Friend, Loyalty & Legacy Hires | Growth by Design

Welcome back to Growth by Design, brought to you by RX2 Solutions, because growth does not happen by accident, it happens by design. In this episode, Rob Graham and Ross Rosner explain why small businesses can't afford charity hires. Every seat is a strategic seat, and a poor-fit hire damages performance, culture, and retention.

They break down the three common traps: the friend hire, the loyalty promotion or retention, and the legacy hire for a relative. Keeping underperformers for reasons outside the work creates two sets of rules, derails entire departments, and can even open the door to serious HR and legal risk.

Instead of forcing a bad fit, they lay out a better way to help: offer mentorship, resume and interview support, honest feedback, or introductions through your network. Teach them to fish instead of handing them a job that ends badly for everyone. Recruitment Tip of the Week: if you wouldn't have called the person yourself for the role, don't offer them that career path.

Episode Timeline

00:00 Introduction to Growth by Design

00:22 Every Seat Matters

01:14 Three Charity Hires

02:42 Culture and Cost Fallout

04:12 HR Risk Example

05:01 Say No, Offer Alternatives

06:47 Mentor and Use Network

08:22 Teach Them to Fish

10:10 Set Standards and Tip

11:47 Business, Not Charity

12:13 Wrap Up and Goodbye

If this one made you think of a hire you shouldn't have made, hit Like so another owner can find it.

If you've lived through a charity hire, on either side of it, leave a Comment. Rob Graham and Ross Rosner read them.

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Growth doesn't happen by accident. It happens by design.

Transcript

SPEAKER_00 0:00

Hi, and welcome back to Growth by Design, brought to you by RX2 Solutions. Because growth doesn't happen by accident, it happens by design. I'm Rob Graham. And I'm Ross Rosner. Today's episode, we're going to be discussing, which might be one of my favorite topics, that you're not a charity and stop hiring like one. So every seat in a small business is a strategic seat. Every seat, every person has a direct impact on the success and the growth of that organization. There is no bench, there's no buffer, there's no quiet rotation, nothing like that. You're hiring for an impact and a reason, right? You're not hiring to help a friend or reward loyalty or anything like that. Because when you do, your team, your business pays the cost of that. And say, you know, we're gonna go over how to avoid these mistakes because everyone's made it. So there's three hires that you know everyone can potentially. Yeah.

SPEAKER_01 1:10

I mean, we've made some of these. Some of them have worked out, some of them haven't. First one that comes to mind for me is the friend hire. The you know, your friend's having a hard time at work, they just got laid off, they do something kind of close to what you do, and you say, you know what, you can learn it, and I'm gonna bring you on. There's also the the loyalty hire, which is promoting or or retaining somebody that just shouldn't be there because they've just been there a while. And you, you know, you want to show loyalty to the other employees, be be a loyal company, so so you you know, retain or you promote them. And also maybe the the legacy hire, which is you know, the relative of somebody else that works for the organization, and you want to show loyalty to them and do them a favor, so you bring on someone that you you maybe shouldn't have just to show loyalty to them.

SPEAKER_00 1:59

And you know, 17% of the times, 20% of the time, managers keep underperformers who fall within those groups. Okay. So let's just say you're looking at 20% of the time, your management team is struggling or is affected directly by your charity hires or keeping somebody in in a role that they should not be in that role. It's putting your finger on the scale.

SPEAKER_01 2:34

It it should really just be how much value and how much headache. And it's not because but because of some external factor.

SPEAKER_00 2:41

Yeah. And at what cost to the business? Uh what's the impact? You know, how is it going to what's the trickle-down effect? You know, we've talked about behaviors and how they impact the business. This can kill your culture, it can kill your business impact, it can really create negative behaviors because they're now being tolerated. And it's just it's a catalyst that's negatively transforming your business. Yeah, it's two sets of rules. Yeah. There was an interesting uh piece in Gallup talking about this and how many of your A players would leave.

SPEAKER_01 3:22

We've we've seen this happen.

SPEAKER_00 3:24

Yeah, which is funny. And then you're just like, okay, now your accounting manager doesn't get the support he needs. He now has a training project, or she has a training project to get your friend to be an accountant, and it just derails everything.

SPEAKER_01 3:40

It guts the department because what ends up happening is you bring in your friend as the director, so and they don't know what they're doing, and then the manager ends up becoming the de facto director and doing all the work, then they resent it, and then they leave, and now what are you left with?

SPEAKER_00 3:54

You then you promote your friend because they're your friend, and then the whole thing just keeps going downhill from there.

SPEAKER_01 4:00

And then you need to outsource all of it to someone and pay crazy consultant rates to bridge the gap, or or you call us to help you find somebody new. I it just it doesn't usually work out very well.

SPEAKER_00 4:11

Yep. And you know, we also see it a lot in the HR world. Small businesses, they'll get somebody's sister or their nephew or whatever to come in on the HR standpoint. And then they have no idea what they're doing, but you know, HR is easy, and you get five lawsuits against you in two years, and you're out a hundred million, yeah, not a hundred million, a million bucks or whatever it is.

SPEAKER_01 4:40

Or you get one lawsuit, they go through the audit and discovery, they realize you were doing everything incorrectly, and now you have a way bigger problem.

SPEAKER_00 4:46

Yeah. There's there's so much stuff there where your charity hires have a huge risk to really derail your business.

SPEAKER_01 4:58

And I oh, go ahead, sorry.

SPEAKER_00 4:59

No, and that's kind of where I was going to go with it. Like you have to look at the risk reward here, and if it's a good relationship, you need to be able to say no and not worry about risking that in in the start. Because, you know, let's say you had your small business has 10, 20, 30, 40, 50 employees on it. They're, you know, small businesses unique. You're they're everyone's kind of like your extended family, at least in my eyes. And you want to take care of those people. So you bring one person in or two people in just to help them out that could have so have a large risk of your organ impacting your organization negatively. It's why why take that risk? Why why put your IT guy into accounting department? It's funny, but it just happened, right? It's there.

SPEAKER_01 5:59

Absolutely. I I mean it I I looked into this recently, like pro bono work, and it's kind of related, but if you can write off pro bono work, you actually can't. You can't write off a charity hire either. It's the same exact thing.

SPEAKER_00 6:12

Yeah. And there's ways to get around the no, right? Like, hey, Ross, no, you can't be my accountant. However, I'll spend some time with you if you want to get in accounting, mentoring you, coaching you, helping you gain those skills, right? It's it has a positive outcome for Ross in this case. He wants to become an accountant, and me, who's not going to affect the business.

SPEAKER_01 6:39

No, we are both married to accountants. Neither of us have I have no interest in becoming an accountant.

SPEAKER_00 6:43

No, but zero. Or you can introduce the person. I was at a meeting Tuesday, and this woman came up to me and she's like, Hey, can you help my son? And I was like, Well, that's a big ask. Well, what do you mean by help your son? They don't see it as a big ask. They see it as you need candidates. And I have a candidate. I'm like, how can I help your son? Like, what does he what does he need? Uh-huh. And she's like, Well, he's in medical devices. I was like, okay, cool. He's in a good industry. And right out of college, and she's like, Yeah, I'm he's I'm looking for like a mentor coach kind of person for him. I was like, okay, you know, I can't, I don't mind talking to him by any champion of means. I was like, but tell him to stay in medical devices. Like, I was like, he's good there. Like, it's a good spot. And she was like, okay, great. Well, I'm gonna introduce you and go through things, right? I don't mind being a friend to this woman and helping her son work on his resume, interviews, all that kind of stuff, right? But we wouldn't hire him here if she was like, oh, he really needs a job. We have nothing that this guy could do. He's an operations guy and medical device. We do not make any kind of medical devices here. No. Could we find him a job? At least not professionally. Yeah, but could we find him a job? Sure. Right. And and and this is the next part of it, is kind of introducing them to your network. If I can help this young guy out and get him a job doing something else or expanding his career, by all means, like would love to be able to have a positive impact on this gentleman's life by doing that. But that's another way that you can take this no, hey, I'm not gonna do this, but let me go right here.

SPEAKER_01 8:22

Something something that I've been doing lately is giving people an unfiltered, because I've been getting a lot of requests for, hey, can you help get this person a job? I would love to get everybody a job that wants one. The chances that we're gonna have the exact right opportunity with the right commute, the right money, the right culture, all of it. It's it it happens, but it doesn't happen that much. So what we've done is give uh a very honest appraisal of what we think about the person's background and kind of try to figure out where they're losing traction in the job market. Yeah. It's almost like the what's the adage? Teach a person to fish versus hand a fish.

SPEAKER_00 8:55

If you give a person a fish to eat for a day, if you teach them a fish, they eat for the right.

SPEAKER_01 8:59

I feel like that's more like teaching them how to fish. Yeah. Rather than just giving them a fish, which is giving them a job, which they're not a fit for, they're miserable because they're not figuring things out. You're not happy because you have the wrong person in the wrong seat, you end up letting them go, and really all you did was give them a fish instead of teaching them how. Teaching them how is here's actually how you can get a job in the area that you want to get a job in.

SPEAKER_00 9:20

And it's funny you mentioned that because I've been doing the exact same thing too. Like a lot of it, it's like, hey, my daughter wants to do this or shift from this to this. Fantastic, no problem. I'll spend a few minutes with her on the phone, figure out what she's doing, look at a resume, and then put a game plan together and say, hey, here, this is if I were you, this is the route that I would go. And then depending on the person, some I'll normally float it to whoever referred them into me so they know that, like, hey, I didn't just blow their friend off. I gave them some very good constructive advice, but you always make it warm and positive. You're not gonna sit there and be like, You're never gonna be an astronaut, like go do something else. Like you gotta be nice about it, even if they're not gonna be there. At least a warm, soft approach. And that comes from having a real conversation and an honest conversation, and that goes with these charity hires. Or if someone's not in the role, you have to sit down with them and sit there and say, like, hey, you don't have these skills, I can't put you in here. It's not fair to you, it's not fair for the team, it's not fair for me, because this is going to end badly, and there's nothing you can do about that. And the moment you slip and and kind of fumble through that, it changes the standardization for your company and everyone else. Because now, you know, Jane wants her friend hired, and John wants his friend hired or son or whatever.

SPEAKER_01 10:56

And we're not putting them on a pip when they don't hit what we need them to hit because they're doing r way better than they were on day one, but they're not where they need to be if they were anybody else on the team. Correct.

SPEAKER_00 11:09

Our recruitment tip for the week here is if you wouldn't have called this person yourself for a job, don't offer them that career path. If and that can be with internal employees wanting to shift departments and everything like that, is that if you wouldn't have done that yourself, keep them where they are.

SPEAKER_01 11:35

Yeah. And just please keep in mind that if you're thinking of doing this, you are giving them a fish and you can help them out way more if you teach them how to fish.

SPEAKER_00 11:47

You're not a charity, you're a business. You could be a charity. Well, you could, but small businesses typically are in. So we're gonna make the assumption that you're not a nonprofit organization, so you're not a charity, that you're a business, right? And you know, while compassion belongs in life and is very important, it does not belong in your hiring decisions.

SPEAKER_01 12:10

Couldn't have said it better myself. Thank you for joining us for this episode of Growth by Design, where we remind you that growth does not happen by accident, it happens by design. We will see you next time.