5 Strategies to Help Startups Hire Post Raise

Startups offer candidates the ability to learn in fast-paced environments filled with opulent growth opportunities. With an emphasis on collaboration and adherence to stretching every dollar, a startup can be an excellent place for the right person. After raising your first funding round, hiring will most likely be a top priority. Hiring the right people that align with your company's values, ambitions, and goals will be one of the make or break decisions that you have to make. The wrong people will waste resources, delay productivity, and ultimately set the wrong kind of tone for your company.

1. Don’t Hire to Fill the Job, Hire to Build the Company

Startup hiring is different than hiring at an established enterprise company. A wrong hire costs startups, on average, around $50k. Therefore, every hire must be made with the future as the north star. You want those that aren't only great on paper, but candidates that are ready to roll up their sleeves and go beyond the scope of their job description. Thus, startups are often not the right fit for those that require stability and highly structured work.

2. Hire for Culture, Train for Skills

We spend half of our lives at work. Therefore, finding a candidate with the personality and values that align with your own is very important. The right culture fit will not only ensure less conflict down the line but will aid fostering an environment where people look forward to coming into work. While every company culture is different, people with a growth mindset are often most valuable. You want those that can not only do the job but aren't afraid to speak up and can do so honestly and with empathy for their colleagues. A focus on fundamental personal qualities (intelligence, diligence, etc.) can help you weed out the wrong candidates far more than any questionnaire or standardized tests. Aside from fairly technical roles (i.e., a mid-level VR developer), you can teach almost any skill a potential employee may lack. While candidates should have a basis of knowledge and experience for the role they are applying for, knowledge of a specific analytics platform or P&L management can be taught. However, ethics, emotional intelligence, motivation, and attitude are intangible qualities that are much harder to instill. Lastly, be wary of those that speak ill of their past employers and colleagues. Unless for some extenuating circumstances, chances are they may speak ill of you later.

3. Hiring is a Skill, Treat it as Such

Hiring the right people is a skill, and chances are there is one person in your startup that is best at it. Having such a person as a dedicated owner of these tasks can help streamline the process. This person needs to facilitate defining the role, understanding it's fit in the company, and how it will be filled. To sustain this, you must develop a rigid structure for hiring and onboarding new employees. Establishing a hiring process that is routine and transparent will not only streamline the hiring process, but it also may prevent potential lawsuits from disenfranchised employees or even the government for income tax reporting mistakes.

4. Hire Smart, Not Fast

Many companies that grow too quickly and fail tend to attribute their failure to a myriad of factors. However, a lot of times, these "factors" were merely symptoms of hiring too quickly, draining resources, and polluting the existing culture. Before just hiring 20 new full-time employees, questions need to be asked, such as:

  • Do you need a full-time employee, or would a vendor make more financial sense?
  • How will this job relate to the company as a whole?
  • Do we need to hire management staff?
  • Do we have the right people in place to support the new hires?

Another big part of hiring smart is researching the roles you may not be familiar with. For example, if no one on your team is a technical person, employing a "developer" isn't so clear cut. There are various types of developers that know different programming languages and build different products. Often products require different types of developers with complementary skills to help each other. Understanding what those are and getting help with the process (especially for such high paying roles) is crucial. If you have raised money, tapping into your investors' networks may be a solution. Otherwise, try to find people to speak with that are already in a similar position. They may provide insight or even a referral to a potential candidate.

5. Manage Expectations Properly & Empower

Prospective employees should understand the type of environment they are signing themselves up for. This is especially true for candidates that have never worked at a startup. While rewards for working at startups are high, the risk can be quite high as well. Therefore, never guarantee anything you cannot deliver on to a potential employee. Doing so will reduce turnover and create a more positive working environment. While startups often cannot afford to pay as much as established brands, great startups don't let that hold them back from getting the best talent. Offering equity, stock options, and growth opportunities presented correctly can go a long way. Flexible work hours for employees and work from home options to those whose job is almost entirely digital can also be enticing.

Ultimately, people will make or break your company. While corporations can afford to have departments of free riders and superfluous positions, just one wrong hire can sink a young startup. Paying close attention to the total package and staying true to your company’s mission and values will play instrumental roles in not only hiring right but setting the entire course for your firm’s future.

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