"Fester like cancer" — Shark Tank's Kevin O'Leary shares how he avoids bad hires through trial onboarding

On May 21, 2025, Shark Tank investor Kevin O’Leary shared on Instagram a way to avoid bad hires by first giving candidates short-term contract work. He said finding the right employees is a big challenge for startups and growing businesses.

According to Kevin,

“It’s a whole lot better than hiring them and having something faster like a cancer in your company because they’re not a good fit.”

The Shark Tank investor explained that this approach involves testing new hires temporarily before offering full-time roles.

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Shark Tank investor Kevin O’Leary’s strategy for preventing bad hires through the 'apprentice period'

The rationale behind contract-based trial periods

Kevin O’Leary emphasized the risk inherent in startup hiring and recommends starting with contract work before committing to a full-time position. He noted,

“When you’re doing a startup, you’re taking a lot of risk, and the people you hire, they’ll not all make it.”

He noted that this approach allows companies to evaluate skills and cultural fit without immediately offering benefits or permanent status. O’Leary advised,

“Doing an apprentice period with somebody, maybe three months, four months, or up to six months, where you pay them 30% more than the salary was going to give them, but they have no benefits.”

The Shark Tank investor underscored that this contract period serves as a probationary phase where both parties assess if they want to continue working together.

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Process and communication during the onboarding trial

The trial onboarding period includes clear communication about expectations and evaluation criteria. O’Leary recommended honesty up front with candidates regarding the temporary nature of the contract and the assessment process.

“You tell them, you’re honest, you say, look, everybody on the team wants to work with you to see if you’re the right fit,” he says.

This transparency helps set clear goals and creates an environment where new hires understand they are being evaluated on skills and how well they integrate into the team. O’Leary added,

“I think you would want to take advantage of this yourself because we’re going to pay you very well with this period of integration.”

Kevin mentioned that offering a higher pay rate during this trial incentivizes candidates to perform while protecting the company from long-term commitments if the fit is poor.

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Benefits of cutting ties early if needed

One key advantage of the contract trial is the ability to part ways with underperforming or incompatible hires without the complications of firing a full-time employee. O’Leary explained,

“Sometimes you realize in a matter of weeks that they’re one person, you just say, look, it’s not working out.”

The company often pays out the full contract period and ends the relationship amicably. The Shark Tank investor stated,

“Very often what we’ll do is we’ll pay them out the full four months or whatever it is and just part ways."

Kevin cited that this approach minimizes operational disruption and financial risk compared to terminating a permanent employee, which can involve legal and procedural hurdles.

By using contract work as a preliminary step, companies can avoid prolonged internal issues caused by poor hires. O’Leary highlighted that bad hires “fester like cancer” in a company, negatively affecting morale and productivity.

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New episodes of Shark Tank air Fridays at 8 PM ET on ABC and are available for streaming on Hulu the following day.