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Hitchhiker's Guide to Hiring in Start-ups Always remember the first bunch of employees do not join an organization as much as they join the founder as an individual

By Nisheeth Kumar

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Imagine how Arthur Dent, the last surviving human being after the destruction of planet Earth by the Vogons in Hitchhiker's Guide to Galaxy, would be feeling. No human around to help him. He is on his own. That's how founders feel in the early days of the start-up – all alone. Everything from managing office supplies to taking strategic business decisions has to be done by them.

Hiring without cash either from revenues or funding is difficult. At the end of the day, you have to pay salaries. Besides the founders, it is difficult to get people on board on a pure equity basis. At best, it will be a combination of both cash and stock. Significant time and energy are spent to secure funds so that a team can be built up and the venture is able to scale. But just when funds are arranged and look like the problem is solved, comes the next big challenge – finding, attracting, and eventually retaining people in the start-up.

In some cases, this challenge becomes almost insurmountable and the start-ups get stuck in the "hiring trap'. The opportunity costs of delayed hiring in a start-up can be massive. In some extreme cases, it can even lead to the venture closing down. In others, competitors may get the opportunity to sneak in, customer service can take a hit, sales can go down, and effectively mega growth plans may not be able to see the light of the day.

Why does this happen? Let's look at the "+' s and "-" s of start-up hiring:

"-' s

  • Insecurity and stability issues
  • Competition from bigger, established names

"+' s

  • Start-ups can offer entrepreneurial experience even to an employee
  • Massive opportunities to execute and learn

Opportunities to be part of the significant upside if the start-up does well Some of the smarter start-ups understand this well and effectively turn to hire into their competitive advantage. Some of the smart things they do:

Meet first 25 employees personally

The first bunch of employees do not join a company/organization as much as they join the founder as an individual. Like investors, for whom the quality of founders is a key evaluation criterion esp. during the early stage, an employee also assesses the venture basis the founders. Hence irrespective of the level at which the employee is being hired, it is imperative that the founder personally meets them before extending the offer. It builds confidence and is a feel-good factor for the person who is joining in.

Leverage the network – hire through references

References are the best source of hiring in a start-up. It provides a basic level of trust and transparency on both sides. The potential candidate can place their trust in the plans that the venture has and how business Is going to evolve in the future along with a clear understanding of the challenges and risk factors.

Hire someone who can hit the road quickly

Start-ups don't have the luxury of providing organized learning to its employees. Everyone learns on the job and there is an urgency to show results and outcomes. In such cases, you may not want to hire people who are doing things that they have been asked to do for the first time. Look for people who have done something similar (if not exactly same) in their prior experience. There is a lot of new ventures stand to gain from hiring such people and there is a clear win-win for both.

Don't hire people at salaries that are way lower than the market

While this is a tough one to manage, most of the cases of people quitting start-ups early can be attributed to this. Until the company matures, the value of the stock is notional and there is no real cash. The only real cash is salary and there are lots of competitors and bigger players who can offer higher salaries to get the right talent. Hence even if it's difficult, make sure salaries offered are almost at par with the market rates.

Leverage Hiring Technology

There are some interesting technology-enabled products & services that you can use to streamline and fast track your hiring processes. These can be trusted partners through the entire growth lifecycle when talent needs are continuously evolving.

Ability to attract talent is a key ingredient in the success of any start-up and it is important to build a brand for you even at an early stage. It can be through the background of founders, innovativeness of the business model or state of the art technology offering. Remember, people are the most valuable asset of any organization.

Nisheeth Kumar

Founder - UniHYR

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