As the startup grows, the founders need to add people to be able to implement their business plans. However, the motivation of employees is very different from that of the founders, and it’s very hard for a startup to hire quality employees!
Joining a startup is a risky choice, and good quality workers have lots of options, which means it’s hard for a bootstrapped startup to attract the right people. Initially, you will tap into your personal network, but you will quickly need to cast your net further to find the right people.
Founders try to source employees using the standard recruiting platforms, but these are designed to cater to the larger companies. Using their personal network may work well for the first few employees, but it’s hard to continue to find good people as they grow.
Using interns is a useful stop-gap measure, but you can’t run a business using only interns! Good interns prefer working for large companies, where they are assured of long-term stability and have a well-defined career path. Hiring interns will also help you become better organised, as you have to train them. This means you will need to set up SOPs, and these systems and processes will help you scale up as you grow.
Yes, it’s possible to use freelancers; and you can outsource work which is not critical, but this can only take you so far! It’s hard to manage freelancers remotely; and they will cost you both time and money, especially if they don’t do a good job; or if you need them to change the delivered product.
One problem is that founder have very high expectations from their employees. They expect that they will be as driven and passionate as they are, but this is not going to happen – if they were that enthusiastic, they would start off on their own – why would they join someone else’s startup?
The expectations which some employees have when they apply to work for a startup are often not well defined. Some want to work only for a short time, as a stop-gap measure while they continue hunting for a job at a large company; while others just want to add the fact that they worked for a startup to their resume because they think this looks cool!
People who work well in a startup have to be wired differently. They need to be willing to get their hands dirty; and be happy to learn new skills which were not part of their original description, as the startup grows. They need to be able to work independently, and should be willing to work overtime all the time, without expecting to get paid extra for this!
Founders need to remember that great employees are worth their weight in gold, and they can make or break the startup. The truth is that good employee have multiple choices – and you have to be able to make them an offer they cannot refuse. Good people don’t work just for money – and this is actually your trump card! As a startup, you can offer them autonomy and flexibility, so they can grow while working for you.
It’s very important that you take your time when hiring. You might be desperate for warm bodies to make sure that work gets done, but getting stuck with the wrong person can prove to be a very expensive error! Firing someone is very hard, and often causes sleepless nights for the founders.
Finding the right applicants is a huge challenge, and you may have to sort through hundreds of applications from various sources before being able to select the right candidate. You may get fatigued, and end up taking a shortcut, but this will come back to haunt you later.
Add a practical test in the hiring process to evaluate their skills. Ask them difficult questions to see how they respond under pressure. Try to figure out their motivation for joining you? Is it just the salary? or are they excited about working on the problem you are trying to solve? Will they be able to deal with the daily chaos which characterizes a startup? Or do they need close supervision? Are they self-starters? Or will they treat this as a job at which they need to work from 9 to 5? This will help you identify candidates who would be willing to go above and beyond what the job description on paper requires.
Hiring well is just the first step. You then need to be sure you onboard the new hires properly so they settle in well. The first few days are crucial, and it helps to assign them a buddy, so they feel at home when at work. Regular feedback is also crucial, since things change so quickly, and you need to be sure everyone is on the same page.
It’s not easy hiring and grooming people, but they are your most valuable assets, and you need to do this yourself – you cannot outsource this. Part of your job description is to help them to grow, and you need to be able to inspire them. You have to lead from the front by being their role model – they are watching you carefully, and will do what you do – not what you say!
It can be hard to manage morale when things are not going well, but it’s best to be open and transparent. If things aren’t going well, don’t try to hide the truth. Employees can sense your desperation, and while they may forgive you for failing, they will not forgive you for lying to them!
If you get funded, then employees will demand a salary hike – after all, they want a slice of the pie as well. They may not understand that you need all the money you have raised to make sure the startup does not fold and will resent the fact that they are stuck with the same meagre salary when they joined.
Also, as you grow, some will resent the fact that the founders get all the publicity and money, while they are stuck with only a salary, as well as ESOPs, which looks good only on paper!
Today, many well-funded Indian startups have become bloated, and their per-employee productivity metrics are poor because they are not able to attract the right talent. Most employees have no loyalty and are happy to move to a competitor if they get paid more. Many will moonlight and freelance on the side as well, on the sly, to augment their income.
Some founders will hire experienced executives who have worked in large companies, to head their sales and marketing effort, because they believe their experience will be valuable. Sadly, this often does not work well in life. They are used to fat salaries; giving orders, and having support staff to do their work for them – they no longer want to do this themselves, which means they often end up becoming expensive misfits, who need to be let go before they do too much harm.
Human capital is the core strength of a company today, and this is where social impact startups have an edge. They can attract loyal employees with the right DNA because they are inspired by the mission of the startup.
This post was inspired by a question asked to me by Vidhi Gupta, Co-Founder at SyncSpire, who helped me to polish it
I asked one of my entrepreneurs, Anuradha Agarwal, who is Founder at Multibhashi for her inputs, and this is what she kindly added there are two broad categories of candidates that I focus on:
There are two broad categories of candidates that I focus on:
- Freshers who knowingly avoided placements in big corporate companies because they didn’t want to become just a cog in the wheel and are particularly looking for a startup to work for because some point later in their lives they want to become entrepreneurs themselves
- Candidates with prior experience in a small or even a failed startup; not big startups because these biggies are corporates in their own way
- The hiring process is short and straightforward; no multiple rounds of interviews; one critical assignment followed by one interview. The result whether positive or negative is clearly communicated swiftly. As a startup, we have to take decisions quickly and value our own as well as the candidate’s time
- The biggest objective of the interview is to ascertain if the person is really startup material or just someone fascinated with the term “startup” but lacks the amount of drive, initiative, grit and hard work that it requires.
- Once hired, the whole team becomes responsible for this candidate’s motivation or demotivation but above all as a leader, the founder needs to “walk the talk”; be super prompt with feedback and follow-ups, be present by the team’s side for late night deadline chases and find one to one time with every team member at least bi-weekly.
- Good hiring and managing become an excellent channel for further hiring. Just like happy customers, happy employees refer more people to join the team 🙂
[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]</em
