Executive Hiring: One of the Costliest Mistakes Most Companies Keep Making

Nicki Crossland
Sep 30, 2025
3 min read

Executive hiring is one of the most critical — and most frequently mishandled — processes in business.

Failure rates remain alarmingly high, and the consequences extend far beyond recruitment fees, which, let’s face it, are not insignificant — especially for the most senior positions.

Harvard Business Review and others have been pointing this out for years. Research shows that 40–60% of executives fail within 18 months of being hired or promoted (Fernández-Aráoz et al., HBR 2009; Carucci, HBR 2017). Almost a third of promising hires leave within three years. And yet, very little has changed.

It’s extraordinary when you think about it. At exactly the level where the stakes are highest — where one wrong appointment can stall transformation, damage culture, or even threaten the survival of the business — the process is often at its weakest.

Where it breaks down

Too often, organisations outsource to search firms and assume the problem is solved. But search firms can only work with the brief they’re given. If the organisation hasn’t done the work needed to define the role and align stakeholders, the outcome will fall short.

Even when candidates are identified, the selection process is rarely structured. The success criteria are frequently unclear, the decision-making inconsistent, and interviews often default to uncoordinated conversations where each leader asks whatever happens to be on their mind. That is no way to fill the most important roles in a company — but it is alarmingly common practice.

And let’s be honest — most organisations significantly underinvest in their own executive hiring capability. Senior HR leaders are increasingly stretched — the executive hiring process is both complex and time intensive — and HR leaders don’t always have the requisite experience to define and manage complex leadership assessment. CEOs and Boards, meanwhile, may be outstanding business leaders, but few are genuinely skilled in evaluating leadership capability, cultural fit, and potential. Instead, decisions are too often based on gut instinct, recycled CVs, or an overly narrow view of “who’s done this before.”

The cost of getting it wrong

When the wrong executive is appointed, the cost runs deep:

Yes, the recruitment fee is wasted — but that’s not the real cost. The effects ripple across the business. Strategy slows down. Shareholder confidence drops. Value is eroded. Employees lose trust, stress levels rise, and voluntary turnover often follows. Customers feel it too — in missed deadlines, weaker service, and the frustration of dealing with a business that has lost its grip. In some cases, the impact of one bad appointment is still being felt years later.

The weakest links

Across organisations I’ve worked with, the same weak points show up time and again:

Roles aren’t defined with enough rigour. Context is skimmed over or not even considered, and person specifications end up as vague bullet points that don’t describe what success really looks like.
Stakeholders aren’t aligned on what “good” means. Different decision-makers hold different views, and those conflicts surface too late in the process.
Assessment isn’t disciplined or consistent. Too often it’s a series of uncoordinated interviews, each based on personal style or instinct.
Decisions aren’t evidence-based. Bias, convenience, or “who’s done this before” carry more weight than structured evaluation.
Onboarding isn’t structured. Beyond managing basic hygiene factors and arranging rounds of “meet and greets” with no real purpose, leaders are left to sink or swim — with little done to actively set them up for success from day one.