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Costly Hiring Mistakes and How to Avoid Them · The Science of Leading

• 0:00
  Hey everyone, welcome back to The Science of Leading.
• 0:02
  I'm Claire Monroe, and as always,
• 0:03
  I'm joined by the ever-wise Edwin Carrington.
• 0:06
  Edwin, how are you doing today?
• 0:06
  Doing well,
• 0:08
  Claire.
• 0:09
  Always glad to be here, especially when we're tackling a topic that,
• 0:12
  frankly, every leader dreads-hiring mistakes.
• 0:15
  It's one of those things that can quietly unravel a team if you're not
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  careful.
• 0:19
  Yeah, and I think a lot of people underestimate just how much
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  damage a single bad hire can do.
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  I mean, it's not just about the money,
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  right?
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  There's this ripple effect-morale,
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  productivity, even your company's reputation can take a hit.
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  I remember early in my career,
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  we rushed to fill a role in my department.
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  On paper, the candidate looked great,
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  but within a few weeks, things started to go sideways.
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  Projects stalled, people got frustrated,
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  and honestly, it took months to recover.
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  It was like this invisible tax on the whole team.
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  That's a classic scenario,
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  Claire.
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  And you're not alone-according to SHRM,
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  a single bad hire can cost up to 30% of that person's first-year salary.
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  But that's just the visible part.
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  The real cost is often hidden: lost productivity,
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  onboarding expenses, the time managers spend correcting mistakes,
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  and the emotional toll on the team.
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  I've seen small businesses lose momentum for half a year because of one
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  misaligned hire.
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  It's not just about the dollars-it's about lost opportunity and trust.
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  And
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  it's so easy to fall into those traps,
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  right?
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  Like, you're under pressure to fill a seat,
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  maybe the job description is a little vague,
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  or you skip a reference check because you're in a rush.
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  Suddenly, you're dealing with way more than you bargained for.
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  I think a lot of leaders don't realize how those little shortcuts can
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  snowball.
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  Absolutely.
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  Most bad hires aren't just "bad luck"-they're the result of gaps in the
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  process.
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  Whether it's unclear expectations,
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  skipping structured interviews,
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  or just moving too fast, those shortcuts come back to haunt you.
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  And the impact isn't isolated.
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  High performers end up picking up the slack,
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  morale drops, and sometimes your best people start looking elsewhere.
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  It's a chain reaction.
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  So, it's not just about avoiding a headache-it's
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  about protecting your team's energy and your company's growth.
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  I think that's a good place to start,
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  because if you don't understand what's really at stake,
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  it's easy to repeat the same mistakes.
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  Exactly.
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  And as we've discussed in previous episodes,
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  the first step is always awareness.
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  If you know what leads to a bad hire,
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  you can start to build a process that actually works,
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  not just for the role, but for the whole organization.
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  So,
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  Edwin, let's dig into what actually causes these costly mistakes.
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  I know culture fit is a big one.
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  I read that SHRM found 89% of new hire failures are because of poor fit,
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  not lack of skills.
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  That's wild.
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  Why do you think so many companies still overlook this?
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  It's a great question,
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  Claire.
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  I think there's a tendency to focus on what's easy to measure-skills,
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  experience, keywords on a résumé.
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  But culture fit is harder to quantify,
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  so it gets pushed aside.
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  The irony is, it's usually the most expensive mistake.
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  When someone doesn't align with your values or work style,
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  it creates friction.
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  Communication breaks down, collaboration suffers,
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  and before you know it, you're repairing morale and trust,
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  not just replacing an employee.
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  And then there's the automation piece.
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  I mean, AI tools are everywhere now-screening résumés,
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  ranking candidates.
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  It sounds efficient, but I've heard stories where great people get filtered
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  out just because they don't have the "right" keywords.
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  There was that Harvard Business School study-over 10 million qualified
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  workers overlooked by automated systems.
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  That's a huge loss of potential.
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  That's right.
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  Automation can be a double-edged sword.
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  I had a client who automated their entire screening process.
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  The system was fast, but it missed their eventual top performer-a candidate
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  with a non-traditional background.
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  The only reason she made it through was because a recruiter took a second
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  look and saw something the algorithm didn't.
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  If they'd relied solely on the AI,
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  they would've missed out entirely.
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  Automation is a tool, not a decision-maker.
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  It can help with logistics, but it can't replace human judgment,
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  especially when it comes to soft skills and fit.
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  And then there's the
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  pressure to move fast.
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  I get it-sometimes you just need someone in the seat.
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  But when you rush, you skip steps.
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  Maybe you don't do a behavioral assessment,
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  or you cut the interview short.
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  And then you're right back where you started,
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  only now you've got a demoralized team and higher costs.
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  It's like, the faster you try to go,
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  the longer it actually takes in the end.
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  Exactly.
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  Rushed decisions almost always backfire.
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  The cost isn't just financial-it's emotional fatigue for the team,
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  lost productivity, and sometimes even damage to your client relationships.
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  I always tell leaders, "It's better to wait for the right person than
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  to hire the wrong one quickly." And as we've seen,
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  the data backs that up.
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  The average cost of a bad hire can be up to 30% of their first-year earnings,
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  and for leadership roles, it can be three to five times their salary.
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  For a small business, that can be devastating.
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  So,
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  whether it's ignoring culture fit,
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  over-relying on automation, or just moving too fast,
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  the risks are real.
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  And honestly, most of these mistakes are preventable if you slow down
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  and use the right tools.
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  That's the key-intentionality.
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  If you're clear about what you need,
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  and you're willing to invest the time up front,
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  you can avoid most of these pitfalls.
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  It's not about making the process longer-it's about making it smarter.
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  Alright,
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  let's get practical.
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  If someone's listening and thinking,
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  "Okay, I get it-bad hires are expensive.
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  But what do I actually do differently?" Where should they start?
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  First,
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  write precise job descriptions.
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  Be clear about what success looks like,
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  not just the tasks.
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  Define the outcomes, the behaviors,
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  and how the role fits into your strategy.
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  That's your foundation.
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  Then, use behavioral assessments-like OAD-to get a deeper read on candidates.
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  These tools help you see beyond the résumé,
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  into how someone will actually show up on your team.
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  And structured interviews,
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  right?
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  We talked about this in a previous episode-having a consistent set of
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  questions, scoring candidates objectively.
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  It's not just about "vibes" or gut feeling.
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  It's about making sure you're comparing apples to apples,
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  and reducing bias wherever you can.
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  Exactly.
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  And don't forget about the candidate experience.
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  Communicate clearly, give feedback,
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  and treat every candidate with respect.
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  A poor experience can drive away top talent and hurt your reputation.
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  According to CareerPlug, nearly 60% of candidates have declined a job
• 6:43
  offer because of a bad hiring experience.
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  That's a huge missed opportunity.
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  And the cost of a bad hire isn't just
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  theoretical.
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  For leadership roles, it can be three to five times their salary.
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  I mean, if you hire someone at $80, 000 and it doesn't work out,
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  you could be looking at $240, 000 or more in total costs.
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  For a small business, that's a game-changer.
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  It really is.
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  So, the question for leaders is: How do you balance urgency with quality?
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  My advice-build in time for reflection.
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  Use scorecards, assessments, and structured interviews.
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  And always ask yourself, "What one change would make the biggest impact
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  on our next hire?" Sometimes, it's as simple as slowing down and asking
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  better questions.
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  I love that.
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  And I'd add-don't be afraid to revisit your process after every hire.
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  What worked?
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  What didn't?
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  Continuous improvement is how you avoid repeating the same mistakes.
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  And if you're not sure where to start,
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  tools like OAD can help you see the patterns and make smarter decisions.
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  That's
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  right.
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  Hiring isn't just about filling seats-it's about building the future
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  of your business.
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  When you invest in the right people,
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  you're setting yourself up for growth,
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  not just survival.
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  Well, that's a wrap for today.
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  Thanks for joining us on The Science of Leading.
• 8:02
  Edwin, always a pleasure learning from you.
• 8:02
  Likewise,
• 8:06
  Claire.
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  And thanks to everyone listening.
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  Remember, every hire is a chance to build something better.
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  We'll see you next time.
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  Take care,
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  everyone.
• 8:13
  Bye for now!