Hiring Tips for Startups

Finding the right employees is complicated and it takes time. But due to the pressure of getting things done, it can be tempting to give way and hire the first decent candidates you come across as opposed to the right ones. Although this might seem like a quick fix at the beginning, hiring the wrong people in your organisation does have a cost! The cost of attrition. The loss of productivity. The impact on your culture and employee satisfaction. In any case, hiring the wrong people is too high a cost to pay. 

The average cost of a bad hire is 2-3 times the person’s salary! Direct costs include recruitment, interviewing, training, bonuses and severance. Indirect costs result in losses in productivity, morale, job knowledge, reputation, work quality, and customer satisfaction.

Remember that the employees of today will be defining the organisation of tomorrow, so you definitely want to have this right as soon as possible! In instances when you desperately need the manpower but cannot find the right candidate in time, look for flexible solutions. Consider alternatives such as hiring a contractor, a part-timer, an intern or a consultant until you find the right match. This will prevent the damage that hiring an average candidate as full-time employee could result in.

So, what does it take to hire the right people into the right roles at the right time?

As you get started, you and your managers are probably handling recruiting yourself. It is faster and more efficient. Plus, you do not have the right capability in your HR team to perform proper research. Your first HR manager is usually a junior generalist and mostly supports with the operational side of recruiting such as:

• Writing the job description
• Posting the job description online
• Reviewing the incoming applications and sending for review to the hiring managers
• Possibly running the first interview screen to validate interest, culture fit and salary level
• Scheduling interviews with the business
• Preparing the offers and the employment contracts
• Sending welcome emails.

But at some point you need more than just operational capability. If not enough quality applications are coming in when you have already tapped into your network, you need to upgrade your recruiting practices. It is not just about processing applications anymore; you need a strategy to find the talent, to find these people fast and to convince them to take your offer over the other offers they may have.  

Whereas the operational side of recruiting can be handled by a junior HR manager, the profile required to perform qualitative end-to-end recruitments is different. You need someone who can: 

• Search and source talent instead of waiting for applications to come in
• Sell your startup as an employer of choice (without overselling!)
• Ensure all candidates have a positive experience (even those who are rejected) and become positive advocates for your startup
• Manage their hiring managers’ expectations and support them in the definition of the profile needed (a good recruiter suggests new strategies that managers may not have thought about)
• Develop a strong understanding of the market, the roles and salary levels
• Grow a network of strong professionals and talent relevant to your industry and market
• Build pipelines and talent pools for the future
• Ensure that all candidates pass the hiring bar and fit the culture
• Support and advise you and managers in your hiring decisions
• Develop the employer brand
• Identify new sources of talent and opportunities for partnership (universities, job fairs, etc.)
• Select the right external providers

This is different to an HR operations role. Whereas HR operations are administrative roles that follow processes and procedures, a well-rounded recruiting professional develops a strategic plan to bring the right people into the right roles at the right time.

1. Building your hiring capabilities in time: 

First, identify your recruiting needs for the next 12 months. Hiring takes time and requires anticipation and planning. The outcome of these should be a manpower plan stating the number of headcounts to hire in the next 12 months, the types of roles and the levels of seniority. This will not only help with your budgeting, but it will also define how many recruiters you need to deliver those hires in time. 

Second, you need a dedicated team. An in-house recruiter will allow you to grow expertise on the market and help you make the right decisions on salaries. Your recruiter will also grow strong knowledge of your business, your roles, your culture and be able to advise on profiles. They will build a network of potential candidates for your teams and be able to create pipelines for the future. And last but not least, an in-house recruiter will save you the high cost of using agencies. There are excellent recruiters with only two or three years’ experience. I was a headhunter for three years before joining Google and it did not take me long to learn the ropes and be excellent at my job! 

2. Building the engine for scale:

 As your startup grows, you need some processes to ensure both effectiveness (getting the right people into the right jobs) and efficiency (total systems cost and timeliness). These processes will increase productivity and efficiency. They will also help all stakeholders (recruiters, hiring managers, interviewers) have clarity on what their roles and responsibilities are throughout the recruitment process: who is checking the candidate’s motivation, salary expectations, work requirements? Who is assessing the candidate’s technical fit? Who is checking on cultural fit? And so on. Clear processes will also ensure a smooth experience for both candidates and hiring managers, and avoid dropouts.   

As you start building the processes, you will also assess the need for an applicant tracking system (ATS). An ATS is similar to a CRM for salespeople. It allows you to track candidates. I've too often seen candidates being contacted several times by the same company (even sometimes the same recruiter) a few months apart. Obviously, this does not look great, not just from the candidate’s perspective that your company doesn’t know who you’ve interviewed in the past, but also internally in the company, as you waste time reaching out to candidates whom you should know from previous interviews are not a fit for a role or the culture. But if you don’t track who you speak to and why you did not proceed with them, it will happen. Unfortunately, a lot of HRIS have a pretty bad recruiting module. There are a lot of softwares on the market that are inexpensive or free. Check what your peer founders use and ask how it works for them. That will save you a lot of time as there are thousands of ATS to choose from, so doing exhaustive comparative research is close to impossible anyways!

📌  IMPORTANT!

Your recruiting engine needs to be in place BEFORE you reach hyper-growth. Once hyper-growth hits, you will have so many roles to fill that you won’t have time to build the engine right. From the moment you hire more than 50 people in a year (and plan to do more in the subsequent years), getting an in-house recruiter is a no-brainer. Besides hiring, your recruiter will have to set up processes and train managers and interviewers, so factor in the time to do this properly ;-)

Additional Resources:

👉 Interview Tips To Hire The RIGHT Candidates In Your Teams

👉 HIRING: The Common Mistakes Leading To BAD HIRES

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About the author:

Anne Caron is an international speaker, author and People Strategy expert. Drawing on her 10 years' experience as a senior HR executive at Google, she set up her consulting practice in 2015 to support leaders in building high performing and positive organisations. Through her experience working with entrepreneurs, she developed a practical methodology for startups to grow the right organisation and teams, which she describes in her book From Zero to 1,000: The Organisational Playbook For Startups.

Find out more about Anne Caron: www.annecaronconsulting.com