We accept the adage that your team is your most important asset and consider hiring well to be imperative for any founder. The best and most successful jobseekers network well and maintain their professional relationships consistently over time. As frequent counterparts in those professional relationships, the startup organizations that most successfully attract top talent tend to approach hiring in much the same way as the most proactive jobseekers.
What does it mean to hire well?
Striking a balance between hiring quickly and hiring the right people for the right roles at the right times is a challenge for many founders. Your objective, simplified, is to hire like Goldilocks—not too fast, not too slowly. It’s incumbent upon founders especially to hire well, and clearly your first few hires matter the most for the success of your organization.
Not too fast
Would you right away marry the first person who you romantically meet? Some people do, and live happily ever after, but most prefer to make more deliberate, informed choices. The same basic principle applies to how quickly you make hiring decisions to grow your organization.
Don’t immediately hire the first person who you interview, no matter how qualified that person seems. Making a hiring decision quickly may save a small amount of time during the hiring process, but can also waste significant time—which equals money—if you choose a poorly qualified person. That you hired incorrectly does not become apparent immediately, meaning that months are likely to pass until you fully recognize your mistake. Even more time then elapses, as you do what it takes to hire for that position all over again.
Hiring too quickly and then later realizing your mistake, under the best circumstances, results merely in lost money in the form of wages and lost time. In a worst-case scenario, quickly hiring the wrong person can prove much more damaging and costly, and can even be fatal for your business. A wrong hire can seriously compromise your organization’s reputation, negatively impact your team’s culture, create conflicts among your other employees, and lower your team’s productivity.
Not too slow
Hiring too slowly is far less than ideal, too. If you aren’t all that sure about who you are looking for, or have just one “perfect” person or archetype in mind, then you are likely going to be slow at hiring.
Doing anything too slowly, as the founder of a startup, puts you at a competitive disadvantage. Another adage applies here—the one about time being your most precious resource. You have objectives to meet and funding to deploy efficiently, which starts with hiring. And if your company is like most, then 40 to 80 percent of your costs are associated with labor.
Just right
What constitutes hiring in a way that is “just right”? The founders who approach hiring both expediently and effectively tend to do all of the following:
- Proactively identify top talent. Stay ahead of your hiring needs by always seeking to identify and connect with high-quality talent, even when you aren’t formally hiring.
- Prioritize networking. You don’t need a formal budget for recruiting to meet great talent, but you do need to put effort into cultivating and expanding your professional network. No shortage of ways to meet qualified candidates:
- Through your own network: Who do you know? Who do they know? Connect or reconnect with former colleagues and classmates to spread the word that your company is growing.
- Through your team: Who do the members of your team know? Go ahead and ask them! Your employees are especially well qualified to recommend candidates because they have natural motivation to work with the best people.
- Via LinkedIn: Join, and participate in, groups that are specialized by industry or function. Or simply conduct a keyword search to find and connect with talented candidates.
- Clearly define your needs. When you are ready to hire, take the time to write a detailed and accurate job description. Establish a budget. By being clear internally about your hiring needs, you are more likely to hire the right person for the right role and less likely to waste time with irrelevant candidates.
- Hire top talent before you need them. You, of course, would prefer to hire only for the specific positions that you are currently seeking to fill. But for your most important hires, or when you spot top-quality talent, hiring early is clearly preferable to losing that talent to a competitor. For those candidates with the most potential to positively impact your organization, make every effort to hire them while they are available.
- Establish a formal hiring process. After hiring your first few team members, increase your hiring efficiency by formalizing your organization’s hiring process. Establish standardized processes to identify, interview, select, and onboard qualified candidates to enable your organization to appropriately balance hiring speed with candidate quality.
- Follow hiring best practices. As you establish and document your organization’s hiring process, keep these hiring best practices in mind:
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- Conduct multiple interviews with each candidate: Particularly for your most important hires, arrange to meet or speak with a candidate multiple times. Also arrange for several of your team members to interview the candidate. Determine an appropriate number of interviews based on the seniority of position.
- Administer practical tests: For candidates who you are seriously considering hiring, gain confidence in their skills by administering a relevant practical test. Assign a coding problem to a developer, request that a product manager review your product, or ask a content creator to write something. Just make sure to pay the candidate for taking the test.
- Be expedient throughout the hiring process: Multiple interviews and a practical test already make for a somewhat lengthy hiring process, so do what you can to expedite the sequence of events. Take responsibility for keeping the hiring process moving.
- Make prompt hiring decisions: After receiving all of the information necessary to make an informed hiring decision, then—hire someone! An easy, if overlooked, way to garner competitive advantage is to hire decisively and without needless delay.
- Trust your gut. Not totally sure which candidate is best for the job? If obligated to choose just one among several qualified candidates, then listen to your gut and hire the person who you instinctively think is the best.
How much can the wrong hire cost?
Hiring is time consuming, which means that it is expensive. The time that elapses while you work to fill a position often equates to lost sales or productivity. If two or three months pass while you identify and interview qualified candidates, then you are “missing out” on two or three months of output or revenue.
But consider the alternative. You hire the first available person or the person willing to work for the lowest salary. In addition to the time required to hire that person, months—let’s say two or three—are likely to pass before you realize that you have hired poorly. The output or revenue generated by your new hire is likely subpar, and you may have incurred additional direct expenses related to travel or training. Assuming that your underperforming employee does not also materially damage the company, the cost of hiring incorrectly is—at minimum—several months of wasted resources.
You may balk at how much time and effort is associated with hiring correctly, but hiring incorrectly is exceedingly risky and potentially far more costly.
Treat recruiting and hiring as mission critical
Take the most time with early and critical hires. These hires matter the most because they most strongly influence the strategic direction of your company, help to establish the organization’s culture, and accomplish the most important tasks. Devote the most time to onboarding and integrating these new team members into your company.
As the founder of a growing company, you should devote up to a quarter of your time to hiring. Not only does hiring well increase the quality of the talent within your organization, but also the hiring process itself can catalyze important changes for your company. Defining your organization’s team structure and writing job descriptions in accordance with that structure, along with developing budgets for salaries, can yield many surprising and important insights for the business. Hiring well simultaneously strengthens and transforms growing companies.
Acknowledging that your hiring choices are crucially important, the next time that you get a LinkedIn connection request from a clearly talented person—accept it! If that candidate (Goldilocks?) would be an ideal addition to your team in six months to a year, then make every effort to hire her today. At the very least, meet for coffee or connect over Zoom.