Hiring

3 Pragmatic Tips for Startups Making Those Critical Initial Hires

One survey found that the third leading cause of failure by startups studied was that they hadn't built the right team from the beginning.
3 Pragmatic Tips for Startups Making Those Critical Initial Hires
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Nearly every business is guilty of making a less-than-stellar hiring decision at one point or another. A whopping 95 percent of companies surveyed by Brandon Hall Group for its Talent Acquisition study have admitted to this mistake.

Related: Here's What the First Hires at Apple, Google and Other Top Tech Companies Are Doing Now

While a bad hire can potentially slow down growth at any company, it can actually have a fatal effect on a startup. According to a report by CB Insights, the third leading cause of failure by startups studied was that they hadn't built the right team from the beginning.

Creating a strong team means that each new hire (or promotion) must be made strategically and with great care, as the margin for error can oftentimes be quite small. Here are three tips to help you build a pool of talent that brings your startup to the next level.

Define your company culture first.

Startups, by definition, are small operations. They may even comprise just one person, so there might not be much of a company "culture" in place just yet. But when your culture does form, it will be a combination of your organization's values, beliefs and behaviors that have developed over time. The process of figuring out what this means for your new company makes that first hire that much more important.

Before you start looking for a new addition to your company, then, take the time to define your business’s values first. What mindsets and characteristics are needed to fuel your mission?

Related: 6 Tips for Bringing on Your First Hires

Peter Holten Muhlmann, CEO of Trustpilot, one of the world’s largest online review platforms, explained to me via email how his company does this: “All your hires need to imbibe the company culture, the value of your brand and ultimately transfer it to your product," Muhlmann wrote, "so that it is obvious to your customers what you stand for. A strong, value-based work culture built on integrity will raise the bar for your hires down the line for years to come.”

This CEO should know. Trustpilot employs more than 600 employees of 40 different nationalities across its seven global offices. If there is one thing he has ingrained in the workplace culture, he said, it’s that the success of his company -- and the online review space in general -- is completely dependent upon transparency and authenticity.

This is part of the reason why the Trustpilot platform remains “open,” meaning that its reviews aren't moderated and brands can't suppress negative reviews. It’s also why the task of maintaining Trustpilot’s core values and honest consumer feedback belongs not just to the company’s “compliance department,” but to every employee.

For your startup, you should set objectives for short-term and long-term strategies to build the culture you want. This is why you should define values from the beginning, then use that knowledge to guide your hiring decision. The alignment of values must take place before new employees are brought on board.

Outline job roles and personality preferences.

By the time startup owners realize they need to hire someone, they'll often be experiencing an overwhelming workload. With such a full plate, you may find it tough to know exactly which roles and responsibilities need to be filled. Since most new launches have not had the time or pressing need to clearly define job roles or organizational structure, it is important that entrepreneurs do so before bringing on a new hire.

Checking off technical skills needed is easy enough, but finding someone with the necessary soft skills to excel in the position is what really matters. Some 93 percent of employers surveyed by Wonderlic for its Hard Facts About Soft Skills report emphasized that they considered interpersonal skills and critical thinking vital to look for in a new hire. However, finding that perfect cocktail of hard and soft skills can be a challenge.

Big data technology has a solution, of course. AI-powered recruitment solutions like Harver can do wonders to eliminate the guesswork when it comes to making that initial hire. The system measures both aptitude and attitude by using big data to scour through candidates’ profiles and match their skill level to job descriptions. From there, it uses machine learning to evaluate the person’s soft skills, problem-solving abilities and alignment with the company’s values.

This leads to more informed hiring decisions and a vastly improved likelihood of finding the right matches. As Harver’s CEO Barend Raaff explained to me via email, “The costs involved with replacing employees can be huge," he wrote. "We believe that a new hire should fit two categories: skill match and personality match. Aligning both these elements is the key to making informed hiring decisions and reducing turnover.”

Take a step back and critically examine why you need to bring on a new hire. What responsibilities will he or she have? Why those responsibilities? And what skills will be necessary to fulfill this role? Failing to define these criteria will make it more difficult to find the perfect fit. So establish the personality and skillset you need, right from the beginning.

Understand How to Develop Talent, Not Just Find It

Unless you have a huge budget to hire someone with years of experience, one of your greatest challenges in hiring, as a startup, is being able to spot potential. Furthermore, startup leaders must understand how to properly develop the people they actually bring on board.

When you bring on younger talent with less experience, make it a point to check in and monitor that person's development. A performance-management system like 15five can make it easier to accurately assess employee engagement across the board. The tool uses quick surveys to acquire feedback and keep up on issues like morale and performance.

Along the way to reaching your milestones, you can set goals and priorities, along with recognition systems. 15five opens up channels for employees to share their thoughts and suggestions with upper level management.

Overall, job stagnation is one of the top reasons why employees leave a position, according to Glassdoor. Entrepreneurs thrive on growth and improvement. If you can commit to promoting these goals for your startup, its outlook will only grow brighter as time goes on.

Related: The Riskiest Hire? Your First Sales Rep.

So, don't fall victim to making a hasty hiring decision you'll later regret. Setting a clear vision and defining important requirements is the way to identifying the perfect candidate; enacting a system that continues talent development is the way to keep that talent long-term.

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