A startup is powered by their founder’s passion and drive, with support from a few partners and some internal resources. However, there comes a time when the founder cannot be involved in all parts of the business. They must expand their team and hire for specific skills to grow.
Moreover, as startups focus on perfecting products and services, they often forget the importance of talent management. A startup needs to invest in talent — create a talent strategy. Have someone at your startup whose job is to champion the strategy and thus work for the employees of the company.
I think talent strategy has everything to do with if a startup succeeds.”— Jimmye Ahn, Crafty, head of internal operations and people
At the beginning of a startup, there is tremendous excitement at each milestone. You have many firsts — the first prototype, the first trade show, the first production model, the first round of funding, the first contract, the first office, etc. The challenge is to maintain enthusiasm in the long-run. You want to keep that excitement going when it seems like times are more onerous.
As your startup grows, various aspects of talent strategy may be quickly forgotten. Here are some areas to keep at the top of mind:
Support Your Staff
One of the significant things startups often overlook is taking care of the employees that they already have onboard. During periods of significant growth and many new hires, there is a lot of time that leaders do not have available for current employees.
Show your appreciation and recognition frequently. Continue to celebrate success — the small wins and the big wins. Celebrating your product releases and excellent customer experiences are a brilliant way to communicate the company’s values. It is about the team — not the leader.
It is therefore essential to provide the right tools and an inspirational path for current staff who are looking to grow with your startup. They need a trajectory to follow. A small in investment in an HR system ensures that things do not fall through the cracks. We support organizations with BambooHR. It is a cloud-based system, an intuitive, affordable way for growing companies to track and manage essential employee information, so it is not forgotten, in a personalized Human Resources Information System.
Every startup in its early stages does not know with any certainty what the next year will look like for its current employees. Ensure the have outcome-based goals that are tied directly to the organization’s goals. Staff needs to have goals that they are going after that will make a difference.
Sometimes, I think that especially in the startup space, that headcount growth can be perceived as the successful growth of a business. Other metrics are likely more meaningful.”— Jim Conti, the Sprout Social, director of talent
Hire people only when it’s possible to support them.
Approach recruitment as a business strategy
You will not deliver results in any area of your business without the right people in place. Recruitment is a business strategy. Finding and engaging top candidates can be a struggle. Consider why any sought-after candidate should invest their time, talent and career capital in your organization when they may not have even heard of your company. Excellent leadership talent often overlooks opportunities in unknown organizations.
What can you do to elevate your brand and compete?
Determine whom you need to hire – what kind of talent stack will fuel your growth? Assess job candidates based on how much actual building they have done, whether teams or new revenue streams. Look at their full talent stack — skills, knowledge, wisdom, behavioural traits, and accomplishments.
Since payroll cost is one of your main budget line items, recruiting must be conducted with the similar strategic thought and urgency as any other capital investment.
Research compensation trends in your area, by first identifying the type of qualities your ideal employees would require to be successful. Next, make sure your salary and benefits package offering is adequate to attract employees who can take you to the next level and beyond.
Align talent strategy with business strategy
Studies show that when companies align talent strategy with business strategy, there are definite positive results:
- A boost in morale
- Increased productivity
- Increased discretionary effort
- Lower turnover
- Higher customer satisfaction
- Improved process and machine efficiency
- Enhanced ability to be innovative across the company
- Better company financial performance
To reap these business benefits, there are a few crucial success factors. Your business strategy must be sound, and your talent strategy must be designed to support the business strategy and integrated across all human resource practices. Although it is helpful for your talent strategy to be based on best practices, research has found that aligning HR practices to business strategy has a stronger impact than best practices in achieving positive outcomes.
Starting Salary
In my experience, a startup may get fixated around salary ranges. It is overly concerned about budget restrictions when recruiting. It is crucial to exercise fiscal responsibility, however, remember that a high performer is 400% more productive than an average performer. Once you find that perfect candidate, do not cheap out. Set high expectations—bake performance metrics right into their compensation package to justify the costs. Their value outweighs what you pay them.
We hire smart people, so they can tell us what to do.”— Steve Jobs
If you employ a high-performer under the circumstances they want (this includes salary, things like flex days, vacation, or creative time to develop their projects at work), it is more probable that they will be happy and stick around. This approach can boost your bottom line. In the end, it will cost you much more to make a bad hire than to hire your top pick for the long run.
Thoughtful Recruiting
As a startup, you learn very quickly that you can not move forward without having someone to get the work done. You need to put the right people in place to perform critical business functions. It is one of the first tasks of any small business.
However, many startups make the mistake of thinking that just getting bodies in the door is all that is needed. This rush to hire someone—anyone—to lend a hand can lead to sub-optimal employee placement. In turn, this leads to rapid employee turnover. You waste both time and money—your two scarcest resources.
Link Talent and Value
What does success look like? You need to look at areas beyond the size of the company. Identifying measures of success should include talking with others who have been through similar startup situations to understand their trajectories. Reach out to people who worked at other startups to hear their experiences of growing. Then, knowing what you are aiming for, your talent leaders can focus on whom they need to hire to realize those goals. Getting the best people into the most critical roles does not happen by chance. It requires a disciplined, evidence-based look at where the organization creates value and how its top talent contributes. I provide a roadmap in How to Link Talent to Value.
When looking for talent for a startup, it is essential for you to first look in the right places. Take time to know where to look for the right people. We support organizations with JazzHR, an online recruitment platform. JazzHR is a powerful, user-friendly, and affordable recruiting software that is purpose-built to help growing companies exceed their recruiting goals. Its best-in-class software replaces time-consuming and manual hiring tasks with intuitive software designed to help you recruit, and hire the right talent, fast. It also brands your organization.
Sourcing through social media is a strategy which is increasingly popular. In fact, a June 2017 CareerBuilder study revealed that 44 percent of employers surveyed said they found information on a social networking site that triggered them to hire the candidate.
Hire Smart, Flexible People
A startup needs to hire people who can do a variety of tasks, who are also flexible and are smart. You need to look for high-potential employees. You do not necessarily know what your roles will look like six months or a year from now, so you need people who can adapt to the business. Also, you are unlikely to recruit proven talent. They are often looking for a sure thing. You are looking for someone who wants to grow with you.
Build Transparency and Diversity in Your Strategy
Be transparent with the hiring team about candidates you previously connected with or interviewed, along with information on why they were not a fit. Understand your brand perception in the market. If most candidates show no interest, you need to understand why and take immediate steps to adjust your recruitment strategy. Outsourcing your recruiting process has some drawbacks for a startup. It is expensive, you cannot fully articulate what you need in the long run, and the fit is so critical — when you hire employee number four that is 25% of your workforce. We provide tools to assist you with advanced analytics and systems, so you have tools that progressive large firms use.
Diversifying your recruitment efforts is vital to help you attract a broader pool of potential candidates. Engage current employees in promoting your open positions. It is also important to hire individuals from a variety of backgrounds. You need new hires to have different talent stack than the founders. Otherwise, your company will be full of people whom all look that same and have similar skills. A diverse group will build a unique company culture. Also, diverse companies are 30% more profitable.
Sourcing plans are the key to building robust talent pipelines for your company. You can overcome the hiring hurdles that plague so many organizations. Top talent is waiting. Now is the time to find these individuals.
Pitch Prospective Employees Like You Pitch Investors
You want to find employees who are looking for the opportunity to build. They must see joining your organization as an investment in their potential. Speak with candidates using the same language as you use with investors.
Like investors, top-level candidates will not sign up for anything if they do not have all the information. You need to be transparent about the state of your business; market opportunity; challenges you face and your strategy for tackling them. Communicate your challenges, the technical skills required of new hires, and the values and attitudes that will make them an excellent addition to your team.
When you cannot compete on brand name or salary, you need to compete on other attributes. Pitch your company as mission-driven, rewarding results, flexible and impactful – something bigger brands may not be able to offer.
Creating Culture at Your Startup
Culture is a strong differentiator for your startup when you are seeking talent. You are unlikely to have brand recognition or robust benefits offerings. Culture is something you can offer that is going to be truly unique to your organization. You need to share your dream vividly with staff and prospective employees. A new hire must see how they fit into your vision and how they will grow with the organization.
Having strong recruiting practices has a positive impact on culture. You need to recognize the role that employees play in cultivating and reinforcing your company culture. The right people will help to strengthen your culture in the right way.
Additionally, policies and processes must align with your target culture. For example, if you want your culture to be one of flexibility, then you need to have flexible workplace policies, such as telecommuting and paid time off, that reflect that type of culture.
Many people see that building an excellent company culture starts with the founders. Culture comes from the employees, and this evolves. Look for team members who can develop and transform your business and your team, and so the next iteration of what you are doing, versus just maintaining what has been before. A healthy workplace culture draws people in.
Establishing Your Brand
Establishing your brand as an employer, identifying and building your culture, and then demonstrating it to the market. We work with the founders to define the mission statement of their company — making sure that they are focused in on the things that are important to them. The next step is to create a strategy for going to market with it.
After creating a strong employer brand, you must work to preserve it. A bad reputation can be difficult to overcome if not addressed early. Small environments cannot afford toxic employees who can hurt morale. Do not be afraid of turnover. You should not delay it, either.
The first time I faced a real tough employee situation, I approached my boss and asked, “When do you know it is the right time to fire someone.” He replied, “the first time you think about it.” He went on to explain, that no one wants to fire anyone, so if you are thinking about it, you have likely exhausted all options. He asked, how long I had been concerned about the employee’s performance and what I have done. My reply was over three months, and I had a long list of intervention attempts. After that experience, I adopted the philosophy to support an employee 100%, until there is no longer a good fit. When that happens, I act quickly with compassion. You can sum this up as “always help out an employee until it is time to help them out.”
Quickly dealing with bad attitudes and poor performance is far better for all involved in the long run.
Always be in Recruiting Mode
Finding great talent is hard. It is even harder to find excellent talent that fits with your business. Often a startup thinks of hiring as a periodic "mode" that they enter when they have an immediate need for a new team member. However, if your company is successful, and planning to be in business over the long haul, you should always be in recruiting mode.
Some of the best people I have hired over the years I met at industry events. We chatted about their interests and where I was going with the organization at the time. When something came up that might be a fit for them, I gave them a call. They gain the advantage of being on my “short-list.” Even when they were not interested, they offered a lead or two of folks who may fit. We both understood it was all about fit. We provide a best-fit staffing process to ensure you get the right people on your team.
When you go to a trade show, do not look to just "sell" more of your products or services — go to scout talent. Initiate relationships with strong candidates who might one day work for your company. Similarly went you visit a customer, prospect, vendor, or supplier, be on the lookout for talent. Consider starting a relationship that over time will potentially directly or indirectly bring more proven talent to your startup.
Nurture Network and Relationships
Strategically and systematically reach out to this new network and grow your relationship. Nurturing these relationships means following and regularly reviewing their LinkedIn and other social media accounts. Talk with them from time to time in a casual yet regular way. Keep them interested in your progress.
Over time you will build a rich pool of potential hiring candidates and have an expanded recruiting network. This approach will give your company a real edge over your competitors. However, many overlook this recruiting strategy. Your investment takes time and energy. However, you can reap massive returns for your company.
Strategic Talent Insights
We are all about evidence-based decisions. Here are some of the incredible business results using best-fit staffing in different three industries.