3 Overlooked Reasons Why Half of All Leadership Hires Fail Within 18 Months

Did you know that 50% to 70% of leadership hires fail within the first 18 months? This turnover trend costs companies an average of $14,900 per bad hire. For executive hires, it is estimated to be more than $500,000 or 2.5 times the salary. This does not include organizational, opportunity, productivity, and transitional costs for the new executive. It impacts finances, decreases productivity by 37%, and affects team morale. The tangible costs are staggering, underscoring the business imperative to improve hiring practices. In this article, I’ll explore why leadership hires fail, the associated costs, and strategies for improving hiring practices.

1. Flawed Evaluation Practices

Flawed evaluation practices are a major contributor to the high failure rate. Many companies depend excessively on subjective impressions, such as first impressions, personal likability, or even hobbies and interests. These subjective factors often overshadow the objective evaluation of crucial aspects like personality traits, motivators, unconscious biases, and cognitive abilities.
Additionally, there’s often a lack of rigorous analysis of cognitive abilities, which are crucial for leadership roles.

Effective evaluation practices involve a comprehensive understanding of a candidate’s personality, motivators, and cognitive abilities. Here are some actionable methods: Behavioral Interviews: This can reveal a candidate’s problem-solving abilities, interpersonal skills, and adaptability. Psychometric Tests: Provides insights into a candidate’s personality traits, motivations, and cognitive abilities. 360-Degree Feedback: This offers a holistic view of a candidate’s performance, including their strengths and areas for improvement.

2. Failure to Predict Leadership Traits

Another common pitfall is the failure to accurately predict leadership traits. Common strategies such as identifying strengths and emotional intelligence are often ineffective, discounting the potential cultural contribution capabilities of candidates. Leadership traits go beyond skills. They encompass a leader’s ability to inspire, motivate, and guide their team. Here are a few tools to assess these traits: Instinctive Action Assessments: These can measure a candidate’s natural instincts and how they approach problem-solving, decision-making, and goal achievement. Leadership Style Assessment: This tool identifies a candidate’s preferred leadership style and how it aligns with the company’s culture. A candidate’s potential cultural contribution is crucial.

The following frameworks can help companies quantify these traits throughout their searches.: Cultural Fit Assessment: This assessment evaluates how well a candidate’s values, beliefs, and behavior align with the company’s culture. Diversity and Inclusion Metrics: These metrics can measure a candidate’s potential contribution to enhancing diversity and inclusion within the company.

3. Costly Leadership Derailments

Leadership derailments can be costly. When there’s a mismatch of competencies to responsibilities, or when poor succession planning disrupts transitions, the effects can be detrimental to the entire organization.

Effective leadership development involves addressing skill gaps, providing early coaching, and nurturing leadership capacity. The strategies below can help companies ensure that leadership hires get a strong start in their roles:

Onboarding Programs: Such programs can help new leaders understand their roles, responsibilities, and the company’s expectations.

Mentorship and Coaching: Provides new leaders with guidance and support during their transition.

Leadership Training Programs: These can help leaders develop essential skills and competencies for their role.

Key Takeaways

What can be done to improve the success rate of leadership hires? A thorough assessment that predicts leadership success is key. It’s not just about skills - a holistic understanding of the candidate is crucial. This includes their personality, motivators, cognitive abilities, and potential cultural contribution.

Metrics for success

Measuring the success of leadership hires involves tracking engagement, performance, and retention rates. Here are some metrics:

  • Engagement Metrics: Such metrics can measure a leader’s ability to engage and motivate their team.

  • Performance Metrics: These can assess a leader’s contribution to the company’s goals and objectives.

  • Retention Metrics: To evaluate a leader’s ability to retain talent.

In conclusion, by addressing these overlooked areas, you can significantly increase the success rate of your leadership hires and set your organization up for long-term success. Remember, successful leadership hiring is not just about finding the right skills, but also about finding the right fit for your company’s culture and values


Samir Wagle