How to Hire the Right People for your Startup

In a previous article, I had outlined the three key things to focus on when hiring for startups vs established companies. Click here to read the article. As a quick recap, here are the three focus areas.

• Hire for Competence, Not Potential
• Hire for Independent Solution Finders
• Hire for Openness and Adaptability

Since the article, I have received a number of requests asking me to elaborate on HOW to assess for the above qualities in potential hires. Therefore I've decided to write an evidence based guide to support your hiring efforts.

Before we start with specifics, let me share with you some golden rules that we follow as assessors. These can be used as a great checklist if you want to review your assessment process for hiring.

• Golden Rule 1: Seek a variety of data points from different perspectives

To get a holistic view of a person in terms of experience, competencies (how they work), skills (what they need to know), culture fit, team fit, motivation, derailers (what goes wrong in stressful situations), you need to go to different sources to get the data that you need. Some include: resume screening, semi-structured interviews, referrals, job simulation exercises (e.g. coding challenges), personality assessments, culture fit assessments, role plays and more.

• Golden Rule 2: Use a standardized assessment process for all of your candidates

There are two reasons for this. Firstly, it is to make sure that your assessment is objectively comparable across all candidates. This way, you can truly use the data available to pick the best candidates! Secondly, it allows you to collect data on your assessment process across time. If you can compare a candidate's assessment results with their performance in the company, you will be able to know better what to hire for, and what data points are key risk factors.

• Golden Rule 3: Use the assessment results to inform development planning once hired

The assessment process allows you to obtain a comprehensive picture of your new hire. Use the information. You now possess the cheat sheet to understanding what motivates and engages your new hire. You also know what development efforts (e.g. trainings, mentorship, feedback topics) you can implement to ensure he/she is successful. A great way to do this is to integrate the assessment results into your comprehensive HR management tool such as OrgOS, or BambooHR to name a few.

Now to dive into the specifics on how to assess for the following qualities. The methods build on each other, so be sure to read from the top.

#1 Hire for Competence, Not Potential

When evaluating competence, there are a number of different methods to do so. However, before we jump into assessing competence for a role, it is important to do an analysis for current role requirements and future role requirements when the startup has scaled. I'm not a proponent for startups to conduct the rigorous job analysis that large companies do, but role requirements guide the criteria through which candidates are assessed, the expectations of a candidate to their role, and your company's talent planning process to support your growth. Therefore whether it's through interviews, questionnaires or a powerful critical incident analysis, it's worth putting some groundwork in. With your analysis done, you can then extract the technical skills (WHAT they need to know), the competencies (HOW they work), and the experience required from the candidate.

• Method 1: Resume Screening (Technical Skills and Experience)

Famously known to most recruiters already, resume screening allows you to do a preliminary check on whether the candidate has the technical skills and experience required. There are great tech tools now called Application Tracking Systems (ATS) to remove the manual component of this process, some even have AI to provide data driven recommendations and predictions for your hiring process. Some of these include OrgOS and BunchAI.

• Method 2: Referrals (Technical Skills and Experience)

Another tried and tested method of recruiters, but vitally important to keep in mind. A resume is one data point that sheds insight on your candidate's technical skills and experience. Referrals provide another data point from the perspective of a past employer. A strong alignment between resume and referral bodes well, and a disconnect may be worth investigating further.

• Method 3: Semi-Structured Behavioral Interview (Experience and Competencies)

Research shows that an improperly designed unstructured interview has been proven to be pretty much useless at assessing competence. However, a properly designed behavioral based interview with questions targeted at assessing the competencies identified is one of the best predictors of job performance. These are great resources on how to build behavioral interviews: How to build custom behavioral interview questions and How to conduct the interview. An easy way cost effective way to build behavioral interviews into your hiring process is to hire a professional to develop a interview guide tool kit for you corresponding to all your assessed competencies. When you have to assess for a new role, simply choose from your tool kit. Contact me if this is something you might be interested in.

• Method 4: Assessments to Observe Candidate Behavior when Doing a Typical Work Task (Competencies)

After interviewing and assessing hundreds of candidates from entry level graduates to senior leaders I can safely say that the research is right, people perform better in interviews than in action. The reason is simple, it's easy to talk, performing is slightly harder.

We call such opportunities to observe behavior in a structured manner Assessment Centers. I won't go into too much detail on how to build one, see here for a really useful guide. Assessment Centers are extremely useful tools to evaluate competence. They normally consist of a standardized set of tasks important to the role (e.g. A startup founder pitching to investors, resolving a difficult customer complaint), accompanied by a checklist of competencies and their corresponding effective behaviors. The candidate is observed by their line managers, HR, and usually a qualified psychologist who rates them on their performance i.e. display of effective and ineffective behaviors when accomplishing the task. The benefit of assessment centers is that you can assess HOW your candidate accomplishes tasks e.g. Can they inspire and motivate teams? Can they handle a difficult client situation without burning bridges? Are they able to balance the short term and long term when planning?

#2 Hire for Independent Solution Finders

When we describe a candidate as an Independent Solution Finder, we are describing HOW we would like them to work. Therefore we need to assess a certain set of competencies. To do so, we will employ Methods 3 and 4 as discussed in How to Hire for Competence, Not Potential.

Independent Solution Finders would possess the following competency. For the shared knowledge of everyone, I am using open source competencies from the Harvard University Competency Dictionary linked here.

Competency: Initiating Action (pg. 46) Taking prompt action to accomplish objectives; taking action to achieve goals beyond what is required; being proactive.

Method 3 (Interview): Ask questions such as

• Describe a situation where you saw something go wrong in your workplace
• What were your initial thoughts?
• What did you do?
• Why did you take those actions?
• What was the outcome of your actions?

Observe for the following behaviors

• Identified what were the root causes of the issues
• Questioned problematic processes or methods
• Identified what measures could improve the situation
• Suggested ways to improve the situation without being asked
• Volunteered to take proactive action

Potential red flags (to name a few)

• None or a few behaviors observed in answer
• Someone that only escalated the problem to upper management
• Remarks like "It was not within my job scope"

Tips for interviewing

• Have more than one interviewer, ideally HR and the line manager to be
• Always probe for specific examples
• Never ask what you are looking for outright i.e. resist the temptation to ask "Tell me about an innovative solution you came up with". This just sets the candidate up to confirm what you are looking for
• Feel free to probe for details, but always come back to the questions designed. This ensures the process is standardized across all candidates, and lowers opportunities for bias
• Always refer to the behavior checklist, this shows HOW the candidate performed in the past. The behaviors anchor the hiring discussion on actual performance and not gut feeling.

Method 2 (Assessment Center)

• Build a group exercise where the group has to solve a problem. See here for an example.
• Observe the behaviors identified above

Tips for the Assessment Center

• Have more than one observer, ideally HR and the line manager to be
• Always refer to the behavior checklist, this shows HOW the candidate performed.

#3 Hire for Openness and Adaptability

I've already shared a number of different methods to assess for Openness and Adaptability. Since these are competency related traits, Assessment Centers and Interviews will work. However, a more powerful method for this will be the personality assessment.

With personality assessments, be careful as there are many out there that claim they are evidence based but are not actually supported by strong science. Some notorious offenders are Meyers Briggs, or the Colour Code method. However, despair not as there are assessments that are validated and reliable such as the NEO-PI which has the OCEAN model underpinning it, and HOGAN Personality Assessments which examine personality from both external and internal perceptions.

Personality Assessments can be powerful because they reveal inner drivers and auto-pilot behaviors which underpin our actions such as openness to feedback, new ideas, questioning traditional methods etc. See Openness on the OCEAN model for more details. They also reveal our emotional reactions to change, challenges and how we react in situations of stress. See adjustment on HPI and HDS on the Hogan Personality Assessments.

In Conclusion

There is so much to share regarding assessing for talent within startups. I have only touched the tip of the iceberg today. Please message me if you have any questions, or article wishes. My mission is to find ways like the interview tool kit discussed in Method 3, or easily adaptable assessment centers to help startups assess smartly but in a resource and cost effective way.