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You’re sitting across from a potential hire, and a gnawing feeling in your gut tells you that they aren’t a good fit.
What should you do?
Large companies can afford to make hiring mistakes, but startups are a different story.
One wrong hire could have an outsized impact on your company. Though most founders and HR leaders know this, the numbers show that startups are often terrible at hiring, with attrition rates of 25%, well above the 13% average. Why? Inexperience could explain it, as well as a lack of strategy, hiring for the wrong need, or inconsistent recruitment practices.
In this guide, I’ll walk you through seven common red flags that I see in the startup hiring process, so you can learn to spot them and weed out bad-fit candidates.
Why Hiring Matters for Startups
Fast-growing startups everywhere look to hiring as a solution to meet demand and maintain growth. But hiring just anyone will not help your company nearly as much as hiring the right people.
Studies show 60% of companies fail because of internal, team-based problems rather than external challenges related to the business. And survey after survey paints a stark and often grim picture of today’s recruitment landscape:
- In a survey conducted by CareerBuilder involving 2000 hiring managers, 74% acknowledged having hired the wrong person for a position at least once, while 41% reported that such hiring mistakes had cost them over $25,000.
- A study by Harvard Business Review revealed that 80% of employee turnover can be attributed to flawed hiring decisions.
- A survey by the national recruiting firm Robert Half of 1000 employees indicated that 39% would consider resigning if their manager hired someone who was a poor fit for the team.
Beyond those statistics, bringing the right people into your company matters because each new hire will have a substantial impact on your company culture, product innovation, growth trajectory, and precedents for future hiring decisions.
Fortunately, the “red flags” of bad fits can be easy to spot once you learn to recognize them.
7 Red Flags to Watch Out for When Hiring
I’ve found the following to be common signs that signify the candidate you are speaking with may not be a good fit for your startup:
- They focus too much on pay
- They have an employee mentality
- They’re in it for the startup perks
- Zero (or minimal) startup experience
- Culture mismatch
- They don’t ask questions
- Negative attitude toward past employers
I’ll walk you through each one in more depth so you can recognize them.
They Focus Too Much on Pay
I’ve always advocated for pay transparency and recognize that pay matters to people who work hard in their roles. Candidates are entitled to care about pay and bonus structures, but at the same time, many flock to startups seeking high salaries, equity, and bonuses, and so they prioritize those things above everything else.
For early-stage companies, your equity may never amount to anything. If someone is seeking a startup role purely based on pay and benefits, they may have unrealistic expectations about the future of the company and may not be ready to handle the inevitable storms that come with startup life.
A common phrase thrown around these circles is that you don’t join a startup waiting for it to work; you join one to make it work. It’s not that candidates shouldn’t care about their salary, but if that is the primary motivator, then they may be better off in a more stable environment.
They Have an Employee Mentality
While you are hiring for specific roles in your company, in reality, the demands on each person can (and probably will) change. Because of this, each person you hire needs to have an ownership mindset rather than an employee mentality.
Candidates with an employee mentality often operate within strictly defined boundaries, expect detailed direction, and hesitate to take initiative beyond their formal responsibilities. They may view problems as “someone else’s job” rather than opportunities to contribute value.
That may work in a large company with clearly defined roles, but your startup needs people who proactively identify problems, suggest solutions, and take ownership of outcomes without constant supervision or explicit permission.
They’re in it for the Startup Perks
Who hasn’t heard of HubSpot’s candy wall or Google’s on-site dry cleaning service?
Like the allure of equity, many flock to startups for the perks. While workplace culture matters, candidates fixated on perks often underestimate the intense work, resource constraints, and uncertainty that come with a startup.
When the rubber meets the road, ping pong tables can only go so far to motivate employees unprepared for the grueling uphill climbs they face. Should your startup enter a rough patch and be forced to scale back on perks (building a sustainable benefit strategy is a topic for another post), these same candidates will be disenchanted and more likely to leave.
Zero (or Minimal) Startup Experience
Who’s the better hire: someone who’s spent over a decade at a single large company, or someone who’s gained experience across multiple startups during that same period?
Almost exclusively, it’s the latter.
Candidates coming from established corporations might expect resources, processes, and stability that simply don’t exist in early-stage companies. They may become frustrated by the ambiguity, rapid pivots, and need to operate effectively with limited resources. Without proper expectations, these candidates might burn out quickly or require excessive onboarding time that you can’t afford.
Culture Mismatch
Cultural alignment is particularly crucial in startups in which teams work closely under pressure.
A candidate whose values, communication style, or work preferences clash with your company culture can disrupt team dynamics and productivity. These misalignments often become magnified in the high-stress, collaborative environment of a startup. Even technically strong candidates can become net negatives if they require the team to work around their incompatible approaches or attitudes.
They Don’t Ask Questions
Life changes fast in startups. Assumptions made last week could be proven wrong in the next, meaning team members must continually learn, adapt, and solve novel problems.
It’s important to hire candidates who are curious and aren’t afraid to ask “why” as they pull on threads. A lack of questions can indicate passivity, disinterest in understanding the business deeply, or overconfidence that prevents growth.
In the early stages, you need people who constantly question assumptions, seek to understand context, and actively engage with decisions. Some of the best employees, regardless of their level or job description, are self-described lifelong learners who live to innovate, refine, and continually seek to make things better.
Negative Attitude Toward Past Employers
Presumably, you are interviewing someone who either holds a full-time position or left one, and they had very good reasons for wanting a change.
At the same time, how candidates discuss previous employers reveals much about their accountability, resilience, and interpersonal skills.
Candidates who consistently blame external factors for past challenges (difficult bosses, unreasonable expectations, incompetent colleagues) may struggle to take ownership of outcomes in your startup. While candid acknowledgment of difficult situations is appropriate, a history of negativity suggests the candidate may bring similar attitudes to your team.
Hiring is Just One Piece of HR: Download the Startup HR Survival Guide for the Rest
Hiring is a key piece of your startup’s success, but it’s only one element of HR.
The most successful startups know that their path to scaling from 7 to 9 figures will be made possible by the practices they follow to attract and retain top performers in their company.
I mapped out this and more in my Startup HR Survival Guide. In this free guide, you will learn:
- How HR can drive growth
- How to hire
- How HR evolves as your company grows
- And more!
Fill out the form below to download the free guide and put your company on the path to hypergrowth.
Nahed Khairallah