Wherever you are in the startup growth cycle, you should be thinking about your next
beers hires. Seriously though, whether you have 10 employees or 100, every new employee you recruit in the early stages will have a crucial impact on both your company culture and your bottom line.
For the second year in a row, First Round’s 2016 State of Startups report found that hiring good people is the number one concern of startups, beating both customer acquisition and revenue growth.
Ultimately, it’s the people who make up the company that determine whether it’s a success. So you should be thinking about your recruitment and HR processes, values and goals from the very first hire.
Here are the top 5 reasons your startup needs a dedicated recruitment team.
1. Hiring is time consumingWithout a dedicated HR or recruitment manager, employees who spend time recruiting are being taken away from their day jobs. Hiring the right candidates is incredibly time consuming, particularly when startups require developers with specific technical experience.
Hiring is always extraordinarily challenging, time consuming, and mentally draining. In small companies resources are scarce, and the process usually involves removing someone from their core competency in order to focus on getting people in the door.Founder and CEO Matt Branton, CoinLock It’s easy to underestimate the time it takes to meet and vet candidates, check references and negotiate on salary. Rushing any stage of the process can result in poor hiring decisions and unhappy workers, which will immediately put a new startup at a disadvantage with competitors. Not only will a dedicated recruiter relieve overstretched and over-worked employees, but he/she will drastically cut down the time it takes to hire. Formal processes and procedures = increased efficiency = less time spent recruiting.
2. CTOs and CEOs aren’t good recruitersWe hate to be the ones to say it, but CEOs and CTOs aren’t necessarily the best people to be left in charge of recruitment! In the early days, startup founders have full control over the process. They can handpick the perfect candidates and reel them in with a mixture of long-term stock options and heady idealism. Gut feeling and intuition rules the roost. There’s probably not a hiring or HR process in sight… So it can be hard to adjust to the idea of putting a dedicated employee in charge of HR and recruitment, let alone a whole team! But once a startup grows beyond the first few hires, it’s no longer tenable (or desirable) for the senior management team to be responsible for the recruitment process.
You probably wouldn’t let your head of marketing try out coding because you are short on devs, so why would you have your CTO handle recruiting alone? Getting a recruiter ensures you have a constant source of new candidates.
3. Recruiters = a good candidate pipelineSometimes a good hire appears overnight. Especially at the beginning of the startup cycle, when hires tend to be referrals, previous colleagues and long-forgotten contacts. But once immediate networks have been exhausted, and the requirements of new roles become more focused and specific, a candidate pipeline is absolutely essential. Tapping informal networks doesn’t scale. And relying solely on inbound leads can lead to second class candidates. The best developers aren’t looking, so they won’t respond to your job posting. You need to actively seek them out.
With a high volume of high-quality candidates, managers no longer have to settle for butts and chairs hiring.
4.It’s hard to attract the best candidatesWe hate to be the ones to say this, but attracting great talent is hard. The acute shortage of IT specialists, coupled with the insatiable demand for their skills, is making it hard for everyone to recruit great developers. It’s particularly difficult for new startups who are still finding their feet and cornering their area of the market.
I am facing the same challenge as everyone: finding developers and technical people for our teams. Nowadays there are many options for a software developer who wants to change his/her job – lots of new startups doing amazing things and closing huge investment rounds.According to Universum, CEOs believe that by 2020, the main goal of company branding will be securing long-term recruitment. A robust employer presence is more important than ever for businesses looking to secure and retain key talent. For more information on employer branding and recruitment , head over to the The Digital Marketing Institute’s blog post on the topic. Market competition also makes closing candidates more difficult. Without an employee who has experience (and time to dedicate to) making counter-offers and building tailored benefits and salary packages, you risk losing a candidate right at the end of the process. A recruitment manager can also help manage the tough back and forth between candidates and senior management. Good recruiters can put an end to bad feelings after a particularly tough negotiation!
5. You need a consistent company cultureIf you haven’t yet created a coherent company vision and set of values for your team to live and die by, do it now. The most successful companies have strong corporate cultures and are, to put it simply, great places to work. Make one wrong hire in a small startup and you risk upsetting the balance of the office and radically changing the direction of the company.
Early hiring sets the trajectory for a company. The first 10 hires at a startup establishes the bar on quality and culture. Once that bar is set, change is difficult.dos and don’ts when growing a startup.