Hiring is one of the most critical—but least addressed—components of building a startup. The old saying “a company’s success depends on its people” is so much more relevant to a startup; one wrong hire can derail it, impacting productivity and culture, wasting time, and depleting resources.
Hiring is typically a part of the people operations function in a startup. But if you’re a founder without a people operations leader, you may need to take on some of the recruiting yourself. And it's a difficult task! Here are some data points that convey how difficult it can be:
According to research by CB Insights, 23% of startups fail because they don't have the right team.
The U.S. Department of Labor estimates that the cost of a bad hire can equal 30% of that employee’s first-year earnings.
A study by CareerBuilder found that 74% of employers admit to hiring the wrong person for a position.
According to the Society for Human Resource Management (SHRM), filling a position takes about 42 days.
Research by Harvard Business School indicates that as much as 80% of employee turnover is due to bad hiring decisions, which often stem from poor cultural fit.
How can you buck these startup hiring trends? We’ve shared resources about hiring in previous posts, but here are ten clear and concise strategies to help startup founders attract and retain the best talent.
1. Define your company culture
Define your company culture and values very early on. Along with the problem the company is solving or the impact their work will have, candidates increasingly seek out workplaces where they feel empowered and aligned with the mission and culture. Company culture can be around common goals, values, expectations, mission, and the physical work environment. Creating an environment that your employees appreciate will automatically boost productivity. Ensure your job postings, website, and social media authentically reflect this culture. Engage with a human resources professional who can help draft your employee handbook and mission statement.
2. Take your time in forming the founding team
Be studious and careful when creating the initial team. While it may be easy to find people by tapping into your network, people who can stand the rigor, uncertainty, and intensity of startup life are rare. Clearly communicate your goals and expectations as you evaluate your network and reach out to connections. Attend industry events and networking meetups to build relationships with potential candidates, and work with a recruiter to gather talent insights and interview a diverse pool of candidates before forming your founding team.
3. Get creative with your total compensation package
While startups don’t have deep pockets and cannot match the salaries of large corporations, they can be creative by offering competitive compensation packages that include equity, performance bonuses, and other benefits that encourage retention and work-life balance. Also, be sure to illustrate your startup's long-term potential and growth opportunities.
4. Highlight growth opportunities
Talented professionals are often attracted to startups for the chance to build, grow, and take on new challenges. Highlight the potential for career advancement, skill development, and the chance to significantly impact the company's success.
5. Use social media for continuous sourcing
Candidate sourcing is an ongoing process — not just for when you have an open job. To get ahead of the curve, leverage social media platforms to showcase your company culture and highlight team achievements and the progress you are making. Use platforms like LinkedIn, Twitter, and Instagram to reach a wider audience and engage with potential candidates.
6. Collaborate with Universities
For entry-level roles, partner with universities and coding boot camps to tap into a pool of fresh talent. Offer internships, participate in career fairs, and host workshops or hackathons to attract and identify promising candidates.
7. Be open to hiring independent contractors
Hiring full-time employees is a time-consuming process. Especially if you don’t have a people operations function to maintain their needs. For immediate work or short-term projects, be open to hiring an hourly or contractual freelancer to keep the work going. Consider time and money or fixed-price assignments.
8. Be transparent
Transparency is critical in the hiring process. While working in a startup requires a person to wear many hats, don’t leave things a surprise; try to outline and communicate the roles, responsibilities, and expectations for each position. Be honest about the funding, challenges, and opportunities within your startup. Transparency builds trust and helps set the right expectations from the start.
9. Streamline your hiring process
Whatever hiring process you define, stick to it and communicate the process to candidates. Outline the process on your careers page, define your timelines and a feedback mechanism, and communicate to the candidate. Evaluate the process often and make amendments as needed. Gather feedback from the hiring team and candidates regularly and make any adjustments to the process.
10. Invest in Onboarding
Onboarding should start the day after the candidate accepts the offer. Ensure you have a cadence where someone from the team communicates with the future hires regularly until they start. Make the new hires feel welcomed and connected. Send them reading material so they can acclimate to your company, their role, and culture. Prepare a checklist and create a 30/60/90-day onboarding plan. A strong onboarding program helps with employee retention.
Recruiting for a startup can be challenging, especially those too small to have a dedicated people operations team. But with the right strategies, founders can attract and retain the talent needed to drive your company's success with the right strategy.
Focus on building a solid company culture, leverage social media for ongoing candidate sourcing, offer competitive compensation, and promote transparency throughout the hiring process. By investing in your team, you lay the foundation for your startup's growth and innovation.
For more tips on people operations functions and topics, check out How to Master People Operations for Startups: A Beginner's Guide.
Another great piece of advice for those looking for their next startup-related opportunity in New England — come get involved with us at Startup Boston! It’s the perfect place to network, learn about new job opportunities, and share your knowledge and experience with the startup community’s movers and shakers.
About the Author: Aruna Mandulapalli is a seasoned recruiter who has worked across industries and has recruited for several reputable companies in the US. She founded her own recruiting company HireSimplified with a mission to bring her expertise to scaling startups.
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