A couple of weeks ago, David Crow had a post in StartupNorth about the importance and challenging that startups face when it comes to hiring.
The post came to mind during a conversation with a startup entrepreneur looking to aggressively hire. A key point was how hiring has to be seen as a strategic rather than administrative process. It makes sense given how a bad hire can penalize a lean and mean startup that needs to operate as efficiently and effectively as possible.
As much as startups recognize the importance of making good hiring decisions, the reality is the process can be time-consuming and, frankly, it’s grunt work.
Many startups look to short-circuit things by hiring friends, or asking friends and employees for referrals. The next stop is job boards or Craigslist. If that doesn’t work, they may tap a headhunter, which is the most expensive option.
An element that goes missing in these situations is looking at hiring as a strategic process. Each person that a startup bring into the fold is important - be it a developer, designer, marketer, salesperson, account manager, customer service rep or admin.
It means that startups need to have a structured approach to hiring as opposed to doing things ad hoc. It may require them to be patient and conduct multiple interviews before making a decision. It may mean avoiding the temptation to take the easy route by hiring friends.
Taking hiring seriously and strategically is a big challenge given the hiring marketplace is red-hot. Many startups find themselves scrambling for talent to support growth, even if it means hiring someone who might not be ideal. It’s a situation in which startups can make mistakes because there is pressure to make a hire.
The question that needs to be asked is not hiring someone worse than a mediocre or bad hire? It may mean the founder still needs to be the lead salesperson and/or the head of marketing, or that the lead developer still handles customer service. The other side of the coin is by not making a bad hire, a startup can avoid taking one step forward and two steps back.
From your experience, what are the key considerations for startups in the hiring process. How do they improve the chance of making the right decision?
More: NextMontreal has a post on how lean startups should make their first few hires.
The challenges with hiring as a startup don’t stop with the first few people – we have seen numerous examples where a start-up gets Venture Capital funding and then they go out and hire executives of every possible department they have in their organization. In every case, this creates a very top heavy org-chart with an executive-to-employee ratio that is wildly unbalanced. This gets compounded when these executives then hire the “doers” required to execute and get things done. When financial realities start kicking in, the Start-up then find themselves in a situation where they need to consolidate headcount and executives resulting in the org chart they should have had in the first place.
Also many Start-ups will hire seasoned executives who gained their experiences in larger organizations and have never previously been an executive at a Start-up before. Although there are exceptions, this often can be a damaging mistake. These people are used to working for larger organizations with an entourage to get things done. Instead, Start-ups need people with good experience but who understand the constraints of a Start-up and who are willing to roll up their sleeves and get stuff done.
The time spent on recruiting the right fit for the organization is much better spent than the time spent recovering from selecting a poor fit. Unfortunately, that is often a lesson that has to be learned the hard way.
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