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Thu, Jan 2, 2014

News & Events, Talent Acquisition

How to hire for a startup (when you have no idea how to hire)

Hiring for a startup is difficult. Set — and be sure to follow — a few simple ground rules.

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Susan LaMotte is the founder of exaqueo (ex-ACK-qwee-o), a workforce consultancy building cultures, employer brands & talent strategies. She got her first W-2 at 14 and hasn’t stopped working or thinking about the way people work ever since. Follow her @SusanLaMotte.

It’s a pivotal moment, really. The point when you finally hit the magic budget number and you can add to your startup team. But chances are you have no idea how to hire. No offense, but it’s true.

Sure, you’ve worked in companies before and added to your team. You’ve interviewed before. How hard can it be? Talent is one of the biggest challenges in startups — and most of us know how much it matters but we don’t make any effort to learn how to hire for a startup.

Hiring can be one of the most important — and oft overlooked parts — of any startup or high-growth business. It seems easy: write a job description, post it and wait for the masses to apply. Interviews are just conversations and offers are easy. Who wouldn’t want to work for you? But, there’s so much more to it, and as a leader, it’s your duty to know the major aspects of your business — especially before you’re able to hire all of the experts in sales, marketing, finance, product development, engineering, etc. You may still be doing some of that on your own.

And recruiting? Well, sure, you can farm it out to an agency. But if talent is one of the most important ingredients to your growth, don’t you want to own the process (and save money)?

Here’s how to hire for a startup:

Know the legal basics

It’s really important to know what laws apply to you before hiring. There are federal and state laws (depending on where your company is based), laws that apply to companies based on size and those that apply to companies with federal contracts.

You also can’t discriminate against a job applicant or an employee because of the person’s race, color, religion, gender (including pregnancy), national origin, age (40 or older), disability or genetic information. Some states have laws that prohibit discrimination based on sexual orientation. A basic legal immersion for you and your leadership team can help to minimize risk.

Understand your finances

Can you afford that next hire or hires? You don’t know until you really run the numbers.

You need to have a good sense of fair market value for compensation (see the “Know the Numbers” section in this post I wrote for The Daily Muse), and then add 20 percent. You’re not paying them more, but an employee typically costs about 20 percent more than their salary once you factor in additional costs, such as benefits, taxes and insurance.

Budget first before jumping to post that job description.

Be clear about roles

Speaking of job descriptions, you may be eager to share how cool your startup is, and how much fun the team has together. That’s all good, but what really matters is the jobs themselves.

Candidates want to know what they’ll be doing and what a typical day might look like. You don’t have to describe every specific task but even if the role has some ambiguity, spell out major responsibilities so expectations are clear. The best job descriptions include responsibilities, behaviors (how the successful candidate might behave or handle certain situations), what the company culture is like (strengths and weaknesses), and future prospects for both the position and the company.

It may be tempting to get cheeky or creative, but don’t do it at the expense of the job itself. Otherwise you’ll be wading through hundreds of resumes attracted to the cheeky instead of the work — many of whom won’t be qualified.

Create a defined hiring process

What are the steps in your hiring process? It’s important to be clear, define each step and the desired outcome. If you’re doing phone screens, what are you hoping to learn in order to determine who moves forward?

Don’t let interviewers ask whatever they want either. Have a set of questions that clearly gets at the job itself — both skills (Do candidates have the level of programming proficiency they claim?) and behaviors (When a crisis happens the day before a major launch, how would they handle it?).

It’s important to ensure that you never ask any questions that address: arrest records, garnishment records, marital status, child-care provisions, pregnancy or plans for future childbearing, physical or mental disabilities, age, nationality, race or ancestry.

And ask similar questions of all candidates so you can compare them fairly.

Create clear rules for selection

I once had a startup leader tell me she hires with her gut. Don’t do that, ever. It’s risky, unfair and leads to bad-fit decisions.

Instead, have a defined set of criteria to determine who moves forward in the hiring process and why. Compare candidates to that set of criteria rather than to each other. Who’s the better fit?

And if you’re doing background or reference checks as part of the hiring process, make sure you get permission from the candidates to do so.

Ask for help, but don’t pass off responsibility

You’ve got an accountant to do your taxes, programmers to make sure your product launches successfully and a sales manager to drive revenue. Why are you trying to create a recruiting strategy alone?

It’s not to say you can’t recruit yourself — you CAN. But get some guidance and advice to create a hiring process that works for your business and your market.

On the flip side, don’t just hand off the process to an outside agency. This is YOUR company. You have to have a vested interest in the process and a long-term stake in the game. Agencies can be expensive, and it’s hard for them to really get to know your business.

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