How to avoid bad hiring decisions when it matters most, according to this Houston expert

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Despite the inevitability of bad hires, recruiters equipped with proper tools and training can identify red flags and take preventive measures. Photo by Tima Miroshnichenko from Pexels

Hiring the right people for the right roles is ideal and can make an organization reach new heights. The reality is every business has made a bad hire.

Finding the wrong fit for a team or organization is not uncommon, but it is important to know what it costs the organization, which can be detrimental to company finances and its workplace culture, especially small businesses and startups where the impact is magnified.

The U.S. Department of Labor reports a bad hire can cost up to 30 percent of the employee’s wage, which would be approximately $18,000 since the average American wage is $60,000. In addition, there are soft costs of managers and leadership time during the hiring and training process, which adds up quickly.

Bad hires explained

A bad hire can simply be someone who is not the best fit for the position or the company. The quality of work may not meet expectations; however, there are behaviors that can point to a bad hiring decision. New hires who were recruited due to specific knowledge or a skillset, but they do not deliver, have a negative attitude, or are disengaged, are all signs of a bad hire.

Even though hiring the best people for the job should be every recruiter’s goal, they are sometimes pressured to quickly fill the role. Once a new hire starts, it does not take long to find out if they are a bad hire. Recruitment is vital to a company’s success, so it is important to know how to identify a bad hire before they join the organization, the red flags, and the lasting impacts to the workplace culture.

Right turns, wrong fit

Business leaders most certainly think they are bringing in the right person for the job, but the wrong fit can significantly impact the organization.

Suffering morale and reduced teamwork: Incompetent employees force team members to cover their work, negatively impacting morale. If these issues persist, it signals to existing employees that suboptimal work is acceptable, which adds stress, distraction and reduced engagement.

Unmet expectations: When a new employee exaggerates their qualifications, they may struggle to meet expectations, resulting in slow or inadequate work product, which can be especially detrimental in a small business setting. This not only impacts the company financially but also demands managers’ time for oversight and performance issue resolution.

Weakened employer reputation: Startups and small businesses depend heavily on their hard-earned reputation and brand. Employees represent a company’s values, and when they fail to embody them, it can negatively influence sales, vendor relationships and recruitment efforts. Actions of employees, both in-person and online, significantly shape public perception.

Client attrition: Poor performance or unprofessional behavior can damage client relationships, leading to business losses. These client experiences may lead to lasting consequences for the company’s reputation, affecting potential clients and key partnerships, and its bottom line.

Recruiting and training challenges: The recruiting process usually spans four to six weeks, involving tasks such as drafting the job description, obtaining approvals, posting ads, resume screening, candidate communication, interviews and offer negotiations. After accepting an offer, new employees, regardless of experience, require time to familiarize themselves with the organization, its processes and job responsibilities. If a poor hiring decision is made, the recruitment process may persist, leading to extended periods of onboarding.

Preventing bad hires

Experienced recruiters can still make bad hires, but certain measures can help mitigate risks:

  • Fine-tune job descriptions. Clear and concise job descriptions aid in identifying suitable candidates and provide a better understanding of position expectations.
  • Take sufficient time. Resist the pressure to fill the role; prioritize finding the right candidate to avoid subsequent costs.
  • Standardize the interview process. Employ set questions for consistency and involve team members in behavioral and peer-to-peer interviews to assess cultural fit.
  • Check references. Verify candidates’ honesty, skills, attitude toward work, and work ethic through thorough reference checks.

Despite the inevitability of bad hires, recruiters equipped with proper tools and training can identify red flags and take preventive measures. This proactive approach ensures better preparation for attracting top talent and minimizes the impact of suboptimal hiring decisions on the company.

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Karen Leal is performance specialist with Houston-based Insperity, a provider of human resources offering a suite of scalable HR solutions available in the marketplace.

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Houston space tech companies land $25 million from Texas commission

Out Of This World

Two Houston aerospace companies have collectively received $25 million in grants from the Texas Space Commission.

Starlab Space picked up a $15 million grant, and Intuitive Machines gained a $10 million grant, according to a Space Commission news release.

Starlab Space says the money will help it develop the Systems Integration Lab in Webster, which will feature two components — the main lab and a software verification facility. The integration lab will aid creation of Starlab’s commercial space station.

“To ensure the success of our future space missions, we are starting with state-of-the-art testing facilities that will include the closest approximation to the flight environment as possible and allow us to verify requirements and validate the design of the Starlab space station,” Starlab CEO Tim Kopra said in a news release.

Starlab’s grant comes on top of a $217.5 million award from NASA to help eventually transition activity from the soon-to-be-retired International Space Station to new commercial destinations.

Intuitive Machines is a space exploration, infrastructure and services company. Among its projects are a lunar lander designed to land on the moon and a lunar rover designed for astronauts to travel on the moon’s surface.

The grants come from the Space Commission’s Space Exploration and Aeronautics Research Fund, which recently awarded $47.7 million to Texas companies.

Other recipients were:

  • Cedar Park-based Firefly Aerospace, which received $8.2 million
  • Brownsville-based Space Exploration Technologies (SpaceX), which received $7.5 million
  • Van Horn-based Blue Origin, which received $7 million

Gwen Griffin, chair of the commission, says the grants “will support Texas companies as we grow commercial, military, and civil aerospace activity across the state.”

State lawmakers established the commission in 2023, along with the Texas Aerospace Research & Space Economy Consortium, to bolster the state’s space industry.

Houston experts: Can AI bridge the gap between tech ambitions and market realities?

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Despite successful IPOs from the likes of Ibotta, Reddit and OneStream, 2024 hasn’t provided the influx of capital-raising opportunities that many late-stage tech startups and venture capitalists (VCs) have been waiting for. Since highs last seen in 2021—when 90 tech companies went public—the IPO market has been effectively frozen, with just five tech IPOs between January and September 2024.

As a result, limited partners have not been able to replenish investments and redeploy capital. This shifting investment landscape has VCs and tech leaders feeling stuck in a holding pattern. Tech leaders are hesitant to enter the public markets because valuations are down 30 percent to 40 percent from 2021, which is also making late-stage fundraising more challenging. After all, longer IPO timelines mean fewer exit opportunities for VCs and reduced capital from institutional investors who are turning toward shorter-term investments with more liquid exit options.

Of course, there’s always an exception. And in the case of a slowed IPO market, a select slice of tech companies—AI-related companies—are far outperforming others. While not every tech startup has AI software or infrastructure as their core offering, most can benefit from using AI to revise their playbook and become more attractive to investors.

Unlocking Growth Potential with AI

While overall tech startup investment has slowed, the AI sector burns bright. This presents an opportunity for companies that strategically leverage AI, not just as a buzzword but as a tool for genuine growth and differentiation. Imagine a future where AI-powered insights unlock unprecedented efficiency, customer engagement and a paradigm shift in value creation. This isn’t just about weathering the current storm of reduced access to capital; it’s about emerging stronger, ready to lead the next wave of tech innovation.

Here's how to navigate the AI frontier and unlock its potential:

  1. Understand that data is the foundation of AI success. AI is powerful, but it’s not magic. It thrives on high-quality, interconnected data. Before diving into AI initiatives, companies must assess their data health. Is it structured in a way that AI can understand? Does it go beyond raw numbers to capture context and meaning—like customer sentiment alongside sales figures? Rethinking data infrastructure is often the crucial first step.
  1. Focus on amplifying strengths, not reinventing the wheel. The allure of AI can tempt companies into pursuing radical reinvention. However, a more effective strategy is to leverage AI to enhance existing strengths and address core customer needs. Why do customers choose your company? How can AI supercharge your value proposition? Consider Reddit’s strategic approach: They didn’t overhaul their platform before their 2024 IPO. Instead, they showcased the value of their vast online communities as fertile ground for AI development, leading to a remarkable first-day stock surge of 48 percent.

  2. Use AI as a customer-centric force multiplier. Companies with a deep understanding of their customer base are primed for AI success. By integrating AI into the very core of their product or service—the reason customers choose them—they can create a decisive competitive advantage based on delivering tangible customer value.

From Incremental Gains to Transformative Growth

This practical, customer-centric approach has the potential to help companies generate immediate growth while laying the foundation for future reinvention. By leveraging AI to optimize operations, deepen customer relationships, and redefine industry paradigms, late-state tech startups can not only survive but thrive in a dynamic market. The future belongs to those who embrace AI not as a destination but as a continuous journey of innovation and growth.

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Hong Ogle is the president of Bank of America Houston. Rodrigo Ortiz Gomez is a market executive in Bank of America’s Transformative Technology Banking Group as well as the national software banking lead for the Global Commercial Bank.

Houston joint venture secures $5.2M for AI-powered methane tracking tech

Fresh Funds

Houston-based Envana Software Solutions has received more than $5.2 million in federal and non-federal funding to support the development of technology for the oil and gas sector to monitor and reduce methane emissions.

Thanks to the work backed by the new funding, Envana says its suite of emissions management software will become the industry's first technology to allow an oil and gas company to obtain a full inventory of greenhouse gases.

The funding comes from a more than $4.2 million grant from the U.S. Department of Energy (DOE) and more than $1 million in non-federal funding.

“Methane is many times more potent than carbon dioxide and is responsible for approximately one-third of the warming from greenhouse gases occurring today,” Brad Crabtree, assistant secretary at DOE, said in 2024.

With the funding, Envana will expand artificial intelligence (AI) and physics-based models to help detect and track methane emissions at oil and gas facilities.

“We’re excited to strengthen our position as a leader in emissions and carbon management by integrating critical scientific and operational capabilities. These advancements will empower operators to achieve their methane mitigation targets, fulfill their sustainability objectives, and uphold their ESG commitments with greater efficiency and impact,” says Nagaraj Srinivasan, co-lead director of Envana.

In conjunction with this newly funded project, Envana will team up with universities and industry associations in Texas to:

  • Advance work on the mitigation of methane emissions
  • Set up internship programs
  • Boost workforce development
  • Promote environmental causes

Envana, a software-as-a-service (SaaS) startup, provides emissions management technology to forecast, track, measure and report industrial data for greenhouse gas emissions.

Founded in 2023, Envana is a joint venture between Houston-based Halliburton, a provider of products and services for the energy industry, and New York City-based Siguler Guff, a private equity firm. Siguler Gulf maintains an office in Houston.

“Envana provides breakthrough SaaS emissions management solutions and is the latest example of how innovation adds to sustainability in the oil and gas industry,” Rami Yassine, a senior vice president at Halliburton, said when the joint venture was announced.

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This story originally appeared on our sister site, EnergyCapitalHTX.com

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