If you’re currently building up your startup from scratch, congratulations! You’re one of the very few percent of people who were driven, intelligent, and lucky enough to succeed in the first few phases of starting a business.
Unfortunately, though, the hard part is hardly over – in fact, it’s only beginning.
One of the most difficult challenges that startups face is expansion. As your business starts to prosper, you will need more help in your day-to-day operations. But how do you choose who to hire?
Startups have needs distinct from any other company, so you need to know the best practices for hiring employees in your situation. In this article, we’ll discuss how to hire the best employees for a startup company.
Defining The Startup
In a nutshell, startups are companies that are only at the initial stages of their business implementation. The classical definition identifies the startup as a temporary organization that is actively searching for a sustainable and scalable business model.
This means that startups are not meant to last: they usually transition into mature companies, or are absorbed into bigger companies.
That’s a pretty clear-cut definition, but several characteristics further define what a startup is. These characteristics include:
- Resources. Startups have very limited financial assets and manpower. The funding for their initial resources usually comes from seed funds, angel investors, and investments from friends or family.
- Company structure. Because of the limited resources, startups usually have little to no company structure, with each member of the team (if any) performing many different roles and tasks.
- Growth. Startup companies often prioritize growth more than any other. This is because growth is essential for their business expansion, whether by organic expansion or getting more funding from interested investors.
- Risk. Companies such as this are considered very risky because they are extremely vulnerable to market pressures or internal problems.
- Innovation. Startups are usually characterized by their innovativeness: young companies need to be more innovative to distinguish themselves from their competition.
As we’ve seen, startups are pretty distinct from other types of business models. However, they are still often confused with other types of companies. We’re going to tackle these differences in the following sections.
Difference Between a Startup Company and Other Companies
Startups have distinct characteristics that separate them from other types of companies. In this section, we’re going to examine these differences by comparing startups to small businesses and established companies, respectively.
Startup vs Small Business
Some people might consider startups to be small businesses purely because of the size of their operations. However, both business models have critical differences that affect their definition.
Startups and small businesses might be somewhat similar in the scale of their operations or the number of people that they employ, but they are vastly different in their business goals.
Since startups are new businesses, their goals are to quickly expand and gain a lot of customers, often at the cost of profits. Some aggressive startups actually burn money for a couple of months to ensure a wider market share.
Another goal that all startups share is to search for a sustainable business model. This means that they don’t have a permanent business model yet – they are still in the process of research, trial, and error.
Once they find their winning formula, they will then execute on that formula and become a company.
Small businesses are different. They already have a sustainable business model and are looking to continue to execute that model for a long time to come.
On one hand, startups need plenty of resources to go through their initial stages. On the other hand, promising startups that display a lot of potential will attract plenty of investors and seed funding.
This is why startups can afford very aggressive forms of debt to fund their initial stages.
Meanwhile, small businesses often don’t target to disrupt the current market and typically play by the rules. As such, they don’t have as much explosive growth potential as startups and can thus don’t have the same aggressive funding as startups do.
Thus, small businesses turn to more conservative methods of funding, such as loans, credit lines, and their assets.
Startups are considered very risky endeavors, mostly because they are very vulnerable to slight shakes ups in the market or even on their team.
Add to that the fact that startups intend to disrupt and acquire a large portion of their industry, and you can see how they can be vulnerable to competition, market trends, or even their lack of ideas for innovation.
Meanwhile, small businesses don’t need to innovate to survive. They launch on an established market, and more often than not already follow a set of rules for operating, further reducing their risk.
Startup vs Established Company
For the business owner, the differences between a startup and an established company are already pretty obvious.
However, employees looking for a job might not be so sure. If you’re a startup looking to hire employees, you need to know the differences between a startup and an established company from the job seeker’s point of view.
Established companies are the bread and butter for many job seekers, and there are indeed plenty of benefits in it for them, such as:
- Better compensation. Because they have much infinitely better resources, established companies often offer better salaries and benefits compared to startups.
- Distinct roles. When job seeker enters into an established company, they can be sure that the roles they serve are more or less defined because that role has most likely existed for a long time since the creation of the company.
- Systematic processes. It’s not just the job roles, various administrative processes such as HR papers, grievances, and more are also pretty much set in stone. This makes it easy for employees to know what to do when situations arise in their role.
On the flip side, there are also downsides for employees working in this kind of environment. For one, advancement takes a long time, and in some instances, it’s difficult to find fulfillment in a very bureaucratic job position.
Although startups can’t offer better salaries and work environment stability, it still has numerous benefits for the employees.
If you’re a startup, you need to know how to position yourself to take advantage of these innate traits of a startup that can help attract job seekers.
- Dynamic and stimulating work. Startups can offer a highly dynamic and stimulating work environment for those who love the challenge.
- Innovative environment. Startups value innovation, so employees will be given plenty of leeways to do their jobs their way.
- Work flexibility. Startups are not bound by unspoken conventions and bureaucratic processes, and thus are more flexible in terms of when and where they do their work – which is a huge plus for employees who value working on their terms.
- Valuable experiences. The exciting work experience that you will likely gain from working on a startup will be invaluable, not just for your career advancement but for personal growth as well.
Despite these attractive personal benefits, it’s undeniable that startups are risky endeavors and that employees might be skeptical to get on board.
Thus, you need to know how your specific startup measures up to the established companies in your industry. Highlight its benefits and disadvantages, and know-how to position yourself to appeal to the kinds of employees that you want.
8 Tips to Hire the Best Employees for a Startup Company
Successful startups need to hire the best employees for their business. However, they’re going to have different needs compared to an established company, or even a small business.
Thus, startup owners must know exactly how they can maximize their resources and hire the best employees for their startup.
Learn to Find Top Talent
Just because you’re a startup doesn’t mean you have to settle for low-level candidates with a bad cultural fit. Sometimes, being a startup is exactly the advantage that you need to play – as long as you know how to play the game.
However, as a startup, you won’t have the same kind of resources and reputation that established companies have – qualities that help them attract the cream of the crop.
But as long as you know where to look for high-quality candidates, you increase your chances of recruiting that one perfect fit. Here are a couple of locations to keep in mind.
- Niche social media platforms. Social media platforms created for niche pursuits like GitHub and the like are home to a very specific bunch of users. GitHub, for example, exclusively caters to programmers and developers. Other examples are BeHance and Quora, among many others.
- Internet forums and messaging boards. In the same vein, there are also specific places on the internet that cater to people you might want to hire.
Reddit and 4Chan are two of the most famous examples, with people from different walks of life creating message forums for specific interests, topics, professions, and more. Other examples include XDA Forums and more.
- Teammate referrals. Who better to recommend you new employees than those who have already worked tirelessly beside you to get your idea off the ground?
Your teammate knows your company culture and requirements, and are the people who are most qualified to recommend someone that they think might be a good fit.
Learn How To Court Top Candidates
Job seekers are recruited – top talents, courted.
Once you’ve identified a talent that you believe is the perfect fit for your startup, it’s almost always the right decision to dedicate your time to building a relationship with that prospect.
You can do this by slowly building up a positive relationship while building a positive image of your company and employer brand. When doing so, keep the following things in mind.
- Play it patiently. Remember that you’re playing the long game, with months or years of rapport building. Don’t lose your patience and jump the gun.
- Be genuine. Be transparent about your intentions and genuine in your interactions. Build real, positive relationships with your prospects. That way, even if you fail to recruit them, you will have gained valuable business contacts.
- Communicate. Send regular, non-intrusive communication via email or SMS, containing positive things about your company or your industry. It’s important to be visible, but you must do it without being overbearing and a nuisance.
Look at Potential Instead of Experience
If you can find a highly qualified and experienced professional that seems like they’re interested, then by all means give it a go.
However, more often than not these personalities will be very highly sought after and you won’t be able to position yourself well enough to gain their attention sometime soon. This can be potentially disastrous if you’re hiring for urgent positions.
Moreover, sometimes it’s just not the best choice to go for someone who only has experience working in big, prestigious companies.
The traits required to succeed in a highly-functional, flexible startup team will be different from the work ethic required of a 20-person team. Their experience might be considerable, but this just means that their adjustment period will be all the more painful.
Instead, look at rising talents in the industry and market to them.
Candidates with tremendous potential but low experience are not as in-demand, and they are often a better fit for developing startups because employees and companies can grow hand in hand.
Give Equal Importance to Soft Skills
Hard skills are important in any industry, but they don’t guarantee success. More than that, skills like these are highly communicable and teachable to willing employees.
On the flip side, soft skills are more difficult to come by and have a vast impact on the employee’s day-to-day performance. It’s relatively easy to teach a new employee how to make company reports – much more difficult to teach them to be driven, organized, or communicable.
These skills are often overlooked, but they are easily just as important as technical skills.
Thus, when interviewing for any position, feel for the candidate’s non-technical attributes, such as personality, work ethic, and guiding principles. Give these aspects equal weight when evaluating your chosen candidate.
Don’t Wait For the Perfect Fit
They are never going to fall on your lap – at least not when you need them most.
Perfectionism is a trait that is best left behind when dealing with regular recruiting, more so if you’re recruiting for a startup. More than that, the closer to your image of “perfect” they are, the more valuable they tend to be for others as well, so you’re going to be fighting an uphill battle in recruiting them.
Often enough, the best fit for your startup is those that you went out on a limb on, even though their qualifications didn’t check everything in your boxes.
Saying that not everyone can make qualified gut decisions. What separates a good recruiter from another is their ability to judge a person’s character despite limited information. Otherwise, just make sure that your interview process is air-tight.
Use Automation Tools To Make Candidate Selection Easier
Time is valuable under normal circumstances. In running a startup, time compounds in importance, so that you absolutely can’t afford to lose even a little bit of it.
Losing time on unproductive activities can mean lost opportunities, and if these inefficiencies stack up it can mean the loss of your effectiveness, and therefore your startups.
To survive, a startup needs to conserve as much time as possible, and you can do this by using reliable software like HireNest.
HireNest is an HR automation software that can help you streamline or even downright automate your HR processes. Specifically, it features:
- Comprehensive time-tracking features.
- Team collaboration and communication tools.
- Integrations and automation for specific processes in your HR.
With HireNest, you can streamline administrative processes, saving you time that you can spend on other critical tasks in selecting employees for your startup.
Actively Pursue Healthy Company Culture
Your company culture isn’t just a booming HR trend – it’s a crucial aspect of your workplace that affects the wellbeing of your employees. A positive company culture contributes greatly to your employer brand because people want to work for a company that is pleasant to work for.
Not just that, company culture will also lessen retention rates. After all, who would want to leave a company that they like working in?
This much is true for typical companies and small businesses – and the importance is even more emphasized for startups because of its vulnerability. Positive company culture can help shield your organization from various shakeups.
Here are a few tips for creating your company culture.
- Startup company culture starts from the top. Because of the limited staff and resources, you have to set an example more than established companies, which will rarely see their founders or top decision-makers.
- Company culture is malleable. Otherwise, you wouldn’t be able to change it. Thus, you need to be on the constant lookout for aspects of your company that you need to change.
- There are no original ideas. There’s a common saying that sums up this idea: “Why invent mediocrity when you can copy genius?” There’s no new idea under the sun, so you would do well to copy from the best companies you know and adapt it for your own.
Never Stop Improving Your Processes
As a startup, you need to be more adaptable and innovative than everyone. If you’re looking to shake the current market, you need to try new things and continually be at the forefront of your industry.
This principle also applies to your recruitment strategy. As your startup expands, your recruiting process should continually improve as well. After all, you can’t expect everything else in your company to change and for this one aspect to be static.
Thus, you need to continually improve your process every time you hire someone. You can do this by:
- Effectively gathering feedback.
- Conducting independent process research.
- Implementing the results of your data analysis.
Hiring the Best Employees for a Startup Company
Hiring the right employees is critical for your startup, perhaps more so than every other company type. Thus, you need to have an airtight process that is guaranteed to get you the best talent possible – and you will get that if you follow all the steps in this article.
Every item listed here is quite implementable in its own right, but perhaps the most actionable is shifting to an HR tool like HireNest.
HireNest is a reliable employment platform that can help improve your startup. With HireNest, you can create assessments, communicate with teammates, track resources, and more!