How to Hire for Start-ups: Insider Guide

We get it, most of us have been there through the hard work, the late nights pouring over cashflow projections and sharpening that business plan. The angst of identifying potential investors, securing the finance and actually getting the business on its feet.

You’ve got a great idea, identified a niche in the market or are just going to replicate an existing business model but do it better — Sir Richard Branson’s favourite approach.

Then you need the team, a great team, not just any old team. Where do you begin? You could hire some of your former colleagues, friends or family, but is that really the recipe for success?

You could just go out and do the hiring yourself of course. But is that really the best place to spend your time?

Whether you’re a product innovator, a genuinely experienced entrepreneur or someone with exceptional brand marketing experience, that’s where the investors expect your focus to be — not spending hours writing job descriptions, developing an employer brand, crafting job adverts and interviewing loads of candidates. Candidates whom you know, immediately upon meeting them, aren’t the right fit.

After all, how do you even know what the ‘right fit’ looks like?

There are no shortcuts to hiring the right people, the first time, every time. When you are rolling out a new start-up it’s critical to hire professionally and accurately. The implications of not doing so can be the difference between success and failure.

Research findings vary, but having the right team in the right place at the right time is vital. Failed business autopsies suggest that between 18 - 25% of start-up failures are directly linked to hiring the wrong people and poor retention meaning targets are missed and growth can be derailed.

If you add in issues around team cohesion it's well above 30%. Especially during those chaotic scale-up phases when a business accelerates quickly and it's all hands on deck.

So, my advice is to start planning before you get to that phase. Find a truly consultative recruiter whom you, your co-founders and maybe even your investors trust implicitly. Get them involved sooner rather than later.

Why it’s critical to secure the very best recruiter for your start-up hiring:

There are few things in recruitment as exciting, rewarding and challenging as recruiting for a fast-growth well-funded start-up. Be cautious when selecting the recruiter you are going to work with.

The last thing you need is an order-taker. Don’t be fooled by a bubbly personality, that large corporate cheese-eating persona and loads of industry terminology.

Test and assess that you’re getting the real deal. This is my interpretation of the kind of recruiter you need.

A Start-up recruiter should look something like this:

The whole project and delivery should genuinely excite them more than the financial remuneration. If money is tight, find an independent who is commercially savvy and even consider offering them a stake in the business as part of their fee structure.

Your ideal recruiter should be enthralled at the fact there is no pre-defined culture or template of what this organisation will look like, how it feels, communicates and functions.

To use the phrase made popular by eminent philosopher, John Locke, what you and your recruiter have to work with is ‘tabula rasa’- essentially a blank slate.

Your recruiter will get to play an intrinsic part in defining what that culture will be, they'll be able to work with you, guide and advise you on developing a coherent, tangible employer and employee brand that is relevant and attractive to the target audience.

Having that kind of input, identifying and creating those elements combined with the opportunity of looking back 1 year, 2 years and 5 years later, and hopefully seeing a thriving, successful environment and organisation, is extremely rewarding.

It isn’t for weak recruiters

Hiring for start-ups is not for the faint of heart, and it certainly isn’t for anyone other than a recruiter with a full-compliment of sharply honed skillsets including acute consultancy skills, a high level of tenacity and commitment.

Test that your recruiter has the commercial perspective to plan and define what the organisational structure will look like, including reporting lines to avoid bottlenecks in decision making.

It's important that they can define role specifications, understand what the right experience and personality traits are for your business now and into the future, stability is the key and they may need to find people who have more experience than the business needs right away, they'll grow or adapt as the business develops.

That’s why it’s challenging, that's why you need more than a transactional recruiter, that's why you shouldn't undertake this project yourself as the business founder.

Every aspect from positioning the employer brand, the benefits and salary structure all the way through to candidate assessment and the selection and onboarding is critical. One false step and suddenly momentum is lost, and often opportunity and money are lost with it.

Your chosen recruiter needs to have a consummate understanding of how to identify where your target audience is, how to reach them through the most appropriate channels, where to invest accordingly across social media and professional forums, and generally how to spread the good word.

Time is of the essence so they should be adept at setting and achieving hard timelines and fast schedules and getting all the wheels aligned and in motion.

They need to be able to assess and select candidates!

You’re laughing, I can hear you. Of course, recruiters know how to assess and select candidates, it’s their job right?

Wrong.

Many recruiters have a very limited skill-set. They know very well how to qualify a candidate such as testing job location, availability and remuneration expectations. But, very few really know how to interview in-depth; how to test experience and acquire evidence of this using competency-based interviewing techniques.

Even fewer understand how to evaluate personality traits and behavioural attributes.

You need one that does.

For a start-up, you need tenacious, agile, resilient and willing employees and assessing those things requires a recruiter with excellent communication skills and emotional intelligence.

They need to be accountable for the long-term outcome

Most of the research shows that the 3rd highest reason start-ups fail is hiring the wrong people. Making the wrong hire in any organisation can be hugely costly, but bad hiring decisions can be catastrophic for start-ups.

They can derail an entire growth strategy, leave investors frustrated and even questioning their decision to back a project in the first place. Estimates vary wildly depending on the source but it's pretty much accepted that a wrong hire costs at least twice the candidate’s salary in lost productivity, cost of hire, workflow and team cohesion, among many other negative effects.

Find a recruiter who is willing to put their money where their mouth is.

How do you do that, I hear you ask? Identify a recruiter who will provide extensive long term replacement assurances of up to 1 year or even more from the point of hire.

Add retention bonuses into the reward structure for the recruiter — I know a recruiter in Malta who works with a company that pays him a % bonus in cryptocurrency when a new hire passes the 6-month point and then pays another % at the 12-month point.

That recruiter has built that business from 5 to 19 employees in 2.5 years. Think innovatively.

Pay them upfront — put some skin in the game

Yep, I saved the worst until last.

Forget about the contingency pay on success format. Recruiters, just like you, have mouths to feed and incur costs. Pay them a retainer but set conditions fixed around mutually agreed timescales, transparency and delivery.

On this basis, a good recruiter will disclose to you how much your project is costing, they’ll invest in professional copy and content writers and outsource additional expertise where necessary.

Don't be afraid of paying a retainer on a monthly basis. No self-respecting decent recruiter is in it for the short-term gain.

Put some skin in the game, you'll get a much better recruiter, significantly better results and your business will survive and very possibly thrive because of it.

If you are compelled and inspired by this article to start looking for your consultative recruiter, then ask me for guidance. The team at i-intro? work with some of the most consultative and innovative recruiters and recruitment businesses in the world.

We would be happy to recommend the ones with the right expertise for your venture.