Editor’s note: This is a guest column by Patrick Goodness, CEO of The Goodness Company.

I’m not one to air dirty laundry in public, but if you are a business owner in Costa Rica, this story is important enough to share.  

About 6 months ago, our leadership team decided that our company was ready to invest for growth.  As an overworked CEO, I realized that we needed the help of an operations manager.  As luck would have it, without even posting an ad, I received an email from a promising prospect, interested in leadership and a new business development position with the company.  Perfect timing…I thought.

Conduct a Thorough Local Search

Our company is located in Costa Rica, so it’s difficult to find qualified English-speaking business professionals.  Honestly, I didn’t even bother to consider filling this role locally.  Mistake #1. (Always conduct a thorough local search for quality local talent before seeking outside talent.)

Get Strong Personal & Professional References

When I received the first email from Leonard “Len” (not his real name) from Idaho…with his interest in moving to Costa Rica to join our firm…I was excited.  Finally, I’d found a candidate to help us grow. So, Len and I continued to talk and get acquainted online and by telephone.  He sounded good.  He had lots of good ideas and seemed energetic about making the move to Costa Rica.  

After 2 months of occasional phone calls, he advised that he was ready to move to Costa Rica in 2 weeks…and asked if I was interested in hiring him.  He emailed a handful of references. I was only able to reach one reference, but I felt good about it, so I gave him a resounding “Yes” and sealed the deal.  Mistake #2. (Always get at least 4-5 quality, strong personal and professional references, and ask tough questions.  If you don’t get the answers you want, keep looking. If 4 out of 5 references never return your email or phone calls, as in my case, walk away from this candidate. Silent references speak volumes.)

Ensure the Candidate is Qualified for the Role

In my excitement to find someone that sounded like a winner, I failed to thoroughly review his resume and professional history. As a marketing company, we are best served by hiring employees with marketing or advertising industry experience.  One month later, when I began to grow concerned about Len’s contributions, I took another look at his resume, only to discover that his work history was littered with short term jobs and failed relationships.  His longest job was as a car salesman.  (Mistake #3: In my zeal to hire him, I overlooked critical details that revealed that Len was not a good fit for our company.  I ignored them.  This mistake cost my company a great deal in wasted time, lost energy and a hit to our company morale.)

Employees Must Find Their Own Living Arrangements

Two weeks later, Len arrived in Costa Rica, and since he didn’t have a place to stay, I let him live in a guest suite on my property.  Mistake #4. (Never let an employee live with you…under any circumstance.  It reduces your ability to make smart business decisions and creates added drama if/when you terminate the relationship.)

Establish Clear Work Schedules

I let him take two weeks to get settled in before starting his role.  The first morning of work, I was in the office by 7am and ready to greet our new operations manager at 8am.  When 9am arrived and he hadn’t arrived for work, I was concerned.  He strolled in at 9:30am and said that he has been working on a few things at home.  I let it go and assumed he was doing as he said. Mistake #5: (Always be clear about work schedules and office hours’ expectations.  My failure to clarify our company policy allowed this new manager to feel that he could set his own hours. This negatively impacted our other teammates who always arrived for work on time. A manager must set the proper tone and must follow the same rules as every other employee.  To have a different set of rules for select employees is dangerous for employee morale.)

Set Clear Deliverables & Deadlines

Len and I talked for two hours about the company needs and top priorities.  We discussed the importance of having a clear plan of action.  He advised that he would get started immediately on an organizational chart and an action plan for our top priorities.  When I terminated his employment almost 4 months later, he had not completed a single deliverable for the company.  Mistake #6: (Always set clear goals for deliverables with clear deadlines for delivery.  If any employee does not meet this deadline, try to find out why.  If the employee simply needs more time, agree on a new delivery date and follow up. If the employee still does not deliver, cut your losses and move on.  Don’t waste 4 months of precious time and money like I did, waiting for promised deliverables.)

Implement Employee Oversight: Trust but Verify

Instead of delivering the agreed projects, Len was out “building vendor relationships” for the company.  I trusted him and believed that he was keeping track of all of these meetings and working in our best interests.  Instead, he was laying the groundwork for building his own company. He provided us with no meeting reports, no meeting schedules and no contact information for his new vendors.  Lots of red flags.  I ignored them all because I wanted to believe that he simply needed to do things “his way”. Mistake #7: (“Trust but verify,” is my new motto.  It’s important to be able to trust employees.  But trust is earned, not given.  I forgot this along the way and let a manipulative employee operate without oversight. He was building his new company right under my nose, and I didn’t notice until it was too late.)

Sign Confidentiality & Non-Compete Agreements

It was clear that Len was planning to create his own company using my money, my clients and my vision.  It was time to terminate his employment.  I asked our office manager to show me his agreement, non-compete and confidentiality agreements that we have every employee sign. However, in my rush and excitement to hire this candidate, we had overlooked these critical documents.  As such, our rogue operations manager was gathering intel, talking with our clients and planning to launch his new digital marketing company while he continued to receive a paycheck from us. We learned that Len had already approached several clients for work “on the side”.  (Mistake #8: Always sign clear agreements and insist on non-compete and confidentiality agreements.  You simply cannot trust that your employees will respect common business ethics. Most employees are good and honest.  These agreements are meant to remind the “not so good” employees about their responsibilities and obligations during and post-employment.)

Have a Good Labor Attorney

We terminated Len’s employment and moved on.  Or so we thought.  Our termination of his employment unleashed a torrent of other problems.  He began to call our employees, current clients and vendors to malign us. While initially damaging, this turned out to be good news, because our loyal employees and clients immediately notified us of his comments.  Sadly, what Len didn’t realize, is that this kind of negative mud-slinging reflects negatively on the person spreading the lies.  In the process we learned the importance of Costa Rica slander laws.  Slander and defamation are serious crimes in Costa Rica that carry large fines. Slander and defamation once carried prison sentences, but the penalties have been reduced to fines. (Mistake #9: Make sure to have a good, trustworthy attorney on your side. Thankfully, with the advice of our attorneys at Arias & Munoz, we were able to respond to these slanderous comments quickly.  It’s hard to know the long-term damage from such acts, but we are confident that our 22+ years of good business will offset a couple of negative phone calls.)

Safeguard Important Documents

One week after Len’s departure from our company, we discovered that critical company documents kept in well-marked binders in our office manager’s office had been removed.  We suspect that Len had been going through client agreements, employee contracts and other confidential documents and simply removing them for his use.  We realized this too late and have lost come critical client documents.  (Mistake #10: Keep all important company documents in a locked safe, make digital copies and store them in a safe offsite location.  The company must protect sensitive information from rogue employees.)

There were many lessons learned from this recent hiring debacle.  Good hiring starts with clear expectations, honest communications and thorough research.  During this difficult process and subsequent self-examination, I have recognized my tendency to make quick hiring decisions based on incomplete information and overly-hopeful expectations. This sets the company up for failure and alienates clients that desire consistency with their account management team. Firing an employee is always difficult and has a negative impact on employee morale. Implementing smart hiring practices will minimize drama and help build a team of loyal, motivated employees that are a solid fit for your corporate culture.

I’ve made my share of mistakes, but I continue to learn and adapt to the nuances of doing good business in Costa Rica.  We used this hiring disaster as an opportunity to sit down with our team to discuss my mistakes and how to improve the company hiring process.  I shared my failings and am more open to the input of our team for future hiring decisions.  Post Hurricane Len, our team is stronger, more loyal and more dedicated to the company and to each other than ever before. What doesn’t kill you makes you stronger…and hopefully smarter.   

Patrick Goodness, CEO
The Goodness Company
www.goodnesscompany.com