New Hires Create More Anxiety at a Midsized Company

My company keeps growing. We add clients, revenue, profit, and of course, we need to add people when some of us are too busy to handle the added workload. But I’ve noticed a pattern over the past few hires: the very people who would benefit most from additional help at first resist the idea of a new arrival. Initially, I was surprised by this phenomenon, but I’ve since recognized that it’s not an uncommon response.

Many articles have been written about why employees resist change and how to overcome that fear and defensiveness. Most refer to organizational changes such as restructuring, mergers, acquisitions, downsizing or moving locations, all of which may result in abrupt shifts in reporting lines, job responsibilities, or the physical environment. Having spent my entire (long) career since college working for only three companies, including ten years at the one I co-founded, I am an Exhibit-A creature of habit, who has problems with any change whether it’s moving the position of my PC or adding a security code to our elevator. These small changes pale in comparison with adding a new senior member to the team.

However, as the CEO of a small investment firm, I am in a position to observe when it’s time to hire someone new. I realize that mostly often, it’s the anticipation of the unknown that creates the stress. However, I never expected resistance to the idea of a new hire from the very people who need relief.   (We have not added layers above our current team — it’s either someone hired to work under our current managers or a person coming on board to a new role, made necessary because of growth.)

To shed some light on this mystery, I surveyed 60 top-level executives, most of whom had also founded their company, to ask about resistance to hiring.   All but one were involved with personnel decisions, the vast majority were currently hiring someone (76%) and 84% of the time it was because of growth in the company’s business or expansion of the skills required.

I was sure my fellow CEOs would share their own experiences with   executives who were hesitant about hiring. However, it didn’t quite turn out that way.   Only 22% reported that they encountered resistance among their existing team compared to 78% who found none. I was amazed to see those numbers until I looked more closely at one important factor: size of the company.

The majority of CEOs from my survey pool led corporations with over one hundred employees, and experienced very little push back in adding personnel. The same was true with very small companies. However, half of the CEOs of businesses with between 12 and 55 full-time staff responded that they faced resistance.

The CEO respondents believed that the reason was concern about change in job responsibility and the company culture. This was true across a wide range of industry sectors and longevity of the enterprise. Two technology CEOs, Jeff Flowers and David Friend, the co-founders of several companies including Carbonite and Storiant, told me that original members of growing organizations may become anxious about losing influence and power when they hear about new hires, until they feel secure enough in a larger corporate setting.

At a small, brand-new company, everyone realizes that growth is an important part of success. At a large company, there may be one or two who might be nervous about any one hire, but not the management team overall. In the middle are firms such as mine, where each senior partner or executive has carved out an area of her or his expertise and responsibility, and any bad hire could affect the firm culture or cause an uncomfortable shift in job function. (Interestingly, there were very few mentions of compensation as a factor in discontent.)

Leadership consultant Sam Bacharach points out that when any job responsibility status quo is threatened, employees at every level may panic. He and others recommend implementing change slowly, but it’s pretty tough to hire a person in increments.

What you can do is introduce the idea of a new person slowly, letting it sink in with one or two other executives, and listen to their thoughts and concerns – which is what I’ve begun doing. From there, we build a very specific job description, including input from several members of our team who would like to offload some responsibilities. It’s critical that they feel secure that they will retain control over the essential elements of their work.

As I’m considering the type of person we need for our next professional, I am compiling a very specific list of tasks that we would like this individual to perform, with help from those who are stretched to the limit. As CEOs and leaders of enterprises, we need to add new members to our team carefully, paying attention to both the organizational needs and the points of resistance so that we manage our growth with everyone in mind.

Karen Firestone is the President and CEO of Aureus Asset Management, an asset management firm which serves as the primary financial advisor to families, individuals, and nonprofit institutions. She cofounded Aureus after 22 years as a fund manager and research analyst at Fidelity Investments. She’s the author of Evening the Odds: Reassessing Risk in Business, Investing, and Life (Bibliomotion, forthcoming April 2016).