Which Hiring Strategy Is Right for Your Startup? My Experience Says This One Startup businesses face a unique environment when it comes to adding the talent it needs during their earliest stages of operations, and every hiring decision is critically important to get right the first time.
By Andrew Amann •
Opinions expressed by Entrepreneur contributors are their own.
Startup businesses face a unique environment when it comes to adding the talent it needs during their earliest stages of operations. Of course, hiring a few full-time employees seems wise, but if a nascent business grows too quickly, salary spend might outstrip its initial funding sources. Too many staffing-related expenses remain a leading cause of startup failure especially when considering the difficulties encountered in hiring technology professionals.
Related to that last point, even with rumors of a recession and the wide publicity of various tech layoffs, the current IT job market still greatly favors candidates. This situation makes any staffing process fraught with risk. Spending vital capital on a hiring effort that results in little success is something nascent businesses need to avoid.
As such, any startup must consider leveraging the staff augmentation approach for at least some of its early hiring needs. Adopting this strategy provides a supply of talent at a fraction of the cost compared to onboarding full-time employees. It gives an emerging business the critical brainpower and budget flexibility it needs to improve its chances of success. So let's take a closer look at both approaches to see what makes sense for your startup.
Related: 5 Ways to Organize a New Business to Take Advantage of the Future of Work
Traditional hiring provides a straightforward methodology for adding talent
A startup using a traditional staffing approach takes a measure of comfort in its straightforward methodology. Your new company simply posts a job ad detailing the requirements of your opening. However, depending on the reach of your advertising, you might be faced with hundreds of candidates that need to be analyzed. This situation becomes a drain on resources for startups lacking a full HR department.
Simply having to parse through a massive number of résumés requires a significant amount of effort from a startup's management team. Productivity for entrepreneurs is critical, and this is time better spent vetting business ideas or developing the requirements for the new business's first minimum-viable product. Once again, adopting this traditional staffing approach might not even result in any successful hires, wasting the time and resources of a business that needs to limit its capital spending. In a startup's earliest stages, only consider using it for a few key hires and ensure you work with a strategic HR team to hire team members who believe in your company's values, which a Gallup poll finds is important for 1 in every 4 employees.
Staff augmentation gives startups more flexibility
Strategic flexibility within startups is a core advantage impacting exploratory innovation, but by the same token, startups also need flexibility to ensure they have the right level of resources at the right time to escalate development, drive growth and advance at key times. When using a staff augmentation strategy, a startup typically adds talent on a temporary basis to meet a specific need. This might be someone with certain tech experience, like AI and machine learning, that your new business wants to complete a project. It also provides a way to try out a candidate on your team before potentially offering them a permanent position.
It ultimately helps the startup scale up its operations in a responsible and manageable manner, especially compared to engaging in risky staffing processes that result in few meaningful hires. This approach remains more conservative and wise when considering the revenue-limited status of most new businesses. Of course, using contract professionals also saves money when compared to the full salaries and benefits packages of a permanent hire.
Typically, a startup works with a managed staffing services provider or a startup studio operating as an agency builder for access to contract professionals on a staff augmentation basis. Building a partnership with a talent provider ensures they understand your business's specific needs and office culture. It ultimately ensures a good fit between a startup and its temporary workers.
Related: How to Boost Revenue Per Employee By Leveraging This Effective Strategy
Other benefits of staff augmentation for startups
Of course, startups gain a myriad of other benefits by adopting a staff augmentation approach for their talent needs. For example, many new businesses lack mature processes or even the concept of a productive team. When partnering with an agency builder as a source for staff augmentation professionals, you have the option to onboard an entire project team. This approach adds extra synergies related to collaboration, ensuring an efficient project highlighted by focused teamwork.
Additionally, staff augmentation lets your startup quickly close a critical skills gap on an important project. If the startup's core business idea involves a mobile app with real-time data analytics powered by machine learning, onboard an entire team with tangible skills and experience, developing, training and deploying ML models. It keeps your project on target and also lets your permanent employees gain valuable experience working with top-shelf software engineers with significant AI experience.
Trying to find a similar team-based talent influx when engaged in a traditional hiring process remains effectively impossible. Your startup might make a permanent hire or two, but these new employees still need to learn how to work effectively as a team.
In the end, staff augmentation for startups provides the flexibility they need to thrive during their early operations. They save money while still benefiting from the top-shelf technology talent many new businesses struggle to hire. Startups now boast the seamless scalability to grow in a measured manner — neither too quickly nor too slow. It's the right approach for any new business looking for the greatest chance at success.
