Dick "da wizard" Costolo, CEO of FeedBurner, has a great post up contrasting two schools of thought around hiring:
Briefly, the "No False Positives" school of hiring says that bad hires are worse than no hire because bad employees infect the company with all sorts of issues. Better to march on with nobody filling an important slot than to bring in a sub-par performer.
The hire fast, fire fast approach basically can be boiled down to "it’s really almost impossible to understand whether a person is going to be a killer A+ match before they start working with you day to day, so best to find somebody that seems close enough, and then remove them quickly if they don’t work out."
Dick offers some useful observations and concludes that the "Hire Fast, Fire Fast" approach only really works when hiring salespeople. For all other positions, it’s better to not hire than hire someone who might be bad.
The NFP style makes you wait into infinity as you look for the apt guy.
The HF/FF theory is suicidal in that when you finally keep a hire, you’re also sending out signals to headhunters.
Warren Buffet faced this problem too. He says he’s got three people lined up as his successors but wouldn’t name them for now.
Follow the sage. Keep the bench full with a mix of winners and mediocres – make the most of winners while hope for the best from others. The headhunters ? Keep’em guessing.