Startups can be exhilarating, exciting, and highly rewarding, but they also mean hard work and there is no guarantee of success. According to the US Bureau of Labor Statistics, 20% of startups fail to make it past their first anniversary and about half fail by year five. The Harvard Business Review says that more than two-thirds never deliver positive returns.
The right hiring strategies play a significant role. Here are some of the most common errors companies make when hiring for their startups and our suggestions to overcome them.
1. Hiring by Resume, Not Experience
Experience will be a determining factor in success, but it requires the right kind of experience. While interviewers will want to examine a resume and a candidate’s background, it’s more important that they have the experience startups need. Just because someone has a degree or worked somewhere else, it doesn’t mean they can hit the ground running.
Employees must be able to handle multiple roles and responsibilities within startups. A hiring mistake startups often make is hiring for a particular skill. While that skill may be essential, they must have a depth of experience beyond that skill as well.
2. Hiring Within Your Network
When starting a business, it is common for a founder to recruit a few people they know and trust. As companies expand, however, they need to go beyond their personal networks to find qualified workers. Hiring friends and family members can make it difficult when it comes to managing them, especially if it’s not working out.
3. Going Too Big, Too Fast
Many startups want to come out of the gate strong, so they go on hiring sprees even before they are ready. Often, startups are looking to grow in size to show investors that they are serious. Other times, ego precedes profits.
Hiring for startups should be methodical and aligned with strategic goals. Lean and agile teams have guided some of the world’s best startups.
4. Mismanaging High-Volume Hiring
When it is time to grow, startup hiring often includes bringing on board a large number of employees at the same time. High-volume hiring can be a challenge and hiring mistakes are common.
Prioritize the essential, non-negotiable skills, then look for the right cultural fit. Even when companies need to hire people quickly, they must meet the startup ethos to be successful.
5. Ignoring Cultural Fit
Cultural fit is critical for all hires. Startups often have limited resources when they’re growing, so anyone startups hire has to be willing to do whatever it takes to get the job done. Employees must be OK with for example having to go buy supplies, run to the post office, or work overtime when needed.
Hiring for startups also needs to focus on agile and flexible workers. It’s not uncommon for startups to change priorities as the company evolves. Startups can’t afford to hire workers who can’t adapt quickly when situations change.
6. Hiding Negative Information
Employees want to work for startup founders that are passionate and driven. However, it’s easy to let passion hide potential obstacles. During the interview process, make sure to talk about the upside but also discuss any potential negatives about the job.
Employees need to know the reality of the job. They’ll find out soon enough. If a company hasn’t been honest or neglected to tell them negative information, they may not stick around. If they need a “perfect environment” to thrive, they aren’t suited for a startup.
7. Waiting for Unicorns
While startups need to find key individuals that will drive the company forward, waiting for that unicorn to walk in the door is not a good idea. If unicorns do exist, they’re exceptionally rare. Don’t postpone hiring for key positions hoping to find this mythical individual that may never emerge.
In conclusion, finding the right employees is challenging in any environment. For startups, it’s essential. Large companies can overcome hiring mistakes, but hiring the wrong people can slow down or cripple startups before they start to gain momentum.
Whether you have a start-up or a more established company, Emerald Zebra is always here to assist you with all your recruitment needs. Feel free to contact us to learn how we can help your business grow with the right team and become even more successful.