"Shark Tank" investor Kevin O'Leary advises founders to abandon traditional employment offers in favor of a "tryout" period.
In a recent video on X, O'Leary detailed his "hire slowly" philosophy, specifically targeting the onboarding of new C-suite leaders. Rather than handing over a full compensation package on Day 1, O'Leary suggests a six-month trial by fire.
O'Leary's method involves bringing on a new executive as a contractor rather than a full-time employee. To sweeten the deal, he recommends paying them 30% above their standard market rate in cash.
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The catch is that there would be zero stock options or benefits during the trial period, a strategy he learned from the Swiss.
"Give them a contract for six months," he said. "Negotiate their deal if they're successful, then throw them into the fire with the team and see if it works out for them and for the team."
O'Leary's approach forces the executive to prove their worth immediately. If the executive fails to mesh with the culture or deliver results, the relationship can be severed without the legal and emotional mess of firing a full-time employee.
Among the benefits of "contractor" status is that it saves the executive from a career-damaging scar, O'Leary said.
"You're not hurting their chances to do something great somewhere else because it's not a blemish on their resume, just a contract they had," he said.
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If the fit isn't right, the executive can walk away, saying they completed a short-term consulting contract while leaving their professional reputation intact.
And the company avoids wasting money on unproven talent.
While some of O'Leary's followers touted the benefits of the trial period, with one posting "Never buy a car without a test drive," others said it limits the talent pool.
"Terrible idea to make it a policy," one recruiter posted. "1) Nobody employed is leaving for a six month contract. Shrinks your pool hugely. 2) Good people have multiple offers. A contract offer automatically goes to the bottom of the pile.
"A ‘star' has options and won't put up with those terms."
Another follower said that employers using the strategy signals a bad job market.
"I got offered a one month work trial in the US," she wrote. "Given how awful the market is for workers now, companies can get away with this."
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