So you've got the funds necessary to hire talent? Here's how to do it, with the 5 P's of startup recruitment: People, Process, Payment, Perks and Product.
Guestpost by Rebecca Belknap & Aik Deveneijns.
Recruiting is hard. I’ve done everything from corporate recruiting to agency recruiting to some weird type of recruiting in the middle of the two, but no matter which angle I go about it, I come to the same conclusion: finding and attracting good people is a challenge. A very competitive and often expensive challenge, especially in hot startups hubs like Silicon Valley and Amsterdam.
I began my career at a very early stage startup in Silicon Valley where I had no idea what I was doing. I had never heard of an ATS or a post interview roundtable discussion. I basically tried to reinvent the wheel in my first few months. Whoops.
I later realized that many founders today have probably found themselves in the same boat I was in. Not to knock recruiters, but I highly doubt most entrepreneurs have come from a long career of recruiting. So I decided to ask them about it.
So I spoke to several startup founders from Amsterdam to Silicon Valley with the intention of extracting all I could from them in regard to their hiring experiences in the early days of their startups. With the information I gathered and my own experiences, I’ve come up with the 5 P’s of startup recruiting: People, Process, Payment, Perks & Product.
It is up to the founders to decide what the culture of their company is going to be. After each new hire, the company culture is affected for the better or worse. Usually for the better, but not always. One person can bring down an empire. I’ve seen it happen.
Ruben Daniels, founder of Cloud 9 (San Francisco / Amsterdam), advises founders to consciously decide on what you want your culture to be and hire people that fit into the culture.
Do you want to have an office where employees come in wearing flip-flops and t-shirts, or do you prefer a more straight-laced suit-wearing atmosphere? Do you have a 9-6 mentality, or will employees have the freedom to choose their hours as long as their work gets done? Will employees be encouraged to speak their minds, or do you prefer a company structured in a more hierarchical way? There’s no right or wrong, but it is up for you as a founder to decide and to hire people that fit.
Use your network…
So now we have the cultural aspect down, but where do we find the candidates? This one is tough, but most would agree that you must use and grow your network to find good people; use current employees, investors, partners, supporters, grandparents, whatever. It’s simple – ask people for help. For all you know your grandmother’s bridge partner could have a rock solid son who absolutely kills it in frontend development.
…but not too much
Satyam Vaghani, co-founder of PernixData (San Jose, CA), has expressed a downside to only hiring from within your own network. Why? Because these people have similar backgrounds, beliefs, etc. He says hiring people from outside of your network not only brings a diverse perspective to the company, but their joining is a stronger validation of your idea/vision (plus, their perspective can also be very helpful for finding mistakes in engineering earlier on).
He also claims that in the early days, founders will (and should) spend about 70 percent of their time recruiting, but that’s for you to worry about!
Be human, hire humans
Words of advice from Quentin de Metz, co-founder of PriceMatch (Paris [acquired by Priceline in 2015]): he advises founders against underestimating an engineer’s communication skills. It is crucial to find smart people who can code who are also social human beings – especially in the early days. A social engineer is much more likely to have a network for you to tap into and they will contribute to the company’s culture.
Here's how to create a recruitment process that will scale:
Step 1: Get yourself an ATS (applicant tracking system). No more passing CVs through email and losing candidates along the way. This is where you will store CVs, interview feedback, and where you will communicate with both candidates and your team about candidates.
Step 2: Use the video or phone screen before bringing candidates onsite. It weeds out about 50 percent of candidates which saves both your time and theirs. You can tell a lot about a person in 3 minutes.
Step 3: Establish an interviewing team for every open position and stick to it. Consistency is key.
Step 4: Assign interview focal points for each member of the interviewing team and try to keep it consistent. Think about creating a question bank for interviewing engineers.
Step 5: Interview day! Make part of your process ‘show and tell.’ Walk the candidate around the office, introduce them to their future team, have them eat lunch with employees if that’s a possibility, and try to show them the actual work/code being done on a day to day basis.
Step 6: Write your post-interview review/summary immediately after interviewing (use the ATS). This way you won’t forget your interview if you have to refer back to it in a week. Your review will also act as data for the future. People re-apply to companies all the time and it’s important to be able to refer back.
Step 7: Conduct a post-interview discussion with the entire interviewing team quickly after all interviews are over. Conduct this however you’d like, but do it and do it quickly.
Step 8: Extend offer or decline with the reason as to why they are not a fit.
Please note: during the process, candidate experience is absolutely crucial. You will have the best results if you build real relationships with the people who walk into your office. Why does this matter? Well, because candidates today often have multiple offers. And when it comes time to make a decision on which company to work for, they are going to think back to the interview, the product, and the relationships they’ve made or haven’t made. Those relationships are impactful when it comes to that decision. Another factor they’ll consider is salary which brings us to our next P…
Pay people what they’re worth. If you don’t, someone else will.
It’s a competitive hiring market out there. Startups are absolutely the little fish trying to compete against the corporate sharks in terms of salary and benefits. The amount of engineers I’m seeing ‘selling out’ (sorry engineers) for a bigger paycheck is substantial.
But okay, I get it… You’re a startup and you can’t afford to pay people competitive salaries right now. The solution to this is very simple. If you can’t pay your people with salary, don’t be afraid of giving away equity.
Quentin de Metz summed this up very nicely. He says, "Don’t be greedy. Giving up 1% of your company will not hit your wallet that hard. Besides, 90% of all startups fail anyway, so the chances of anyone cashing out are pretty slim."
If you’re worried about equity, do what Quentin did. Do offer equity, but only after employees had been on board for one year. Seems pretty fair to me. All very straightforward, right? Let these points marinade for a moment or have a look at the rest of the P’s.
This is the fun part! Perks are those things you offer to your employees that they brag about to their friends and family when they are out of the office.
The Google’s and Facebook’s of the world have got perks down to an art. But startups can’t even begin to compete with those big fish, right? Wrong.
You may not be able to provide 24-7 gourmet meals or computer accessory vending machines or free bikes to use during the workday, but there are a number of things you can do to make your employees feel appreciated.
Take your team on a few company outings a year, have a holiday party, provide ergonomic seating, provide a happy hour on Fridays, buy your team lunch a couple of times per week (more than the typical bread + cheese + spread), maybe allow dogs in the office, and deck your team out with company branded shirts or sweatshirts.
And involve/invite the families and friends of you employees to your events! Believe it or not, when you do this the retention rate of employees who involve people from their personal lives is typically higher.
And don’t forget to take lots of pictures and post them to your Careers, Facebook, and Glassdoor pages so candidates can see how well you as a founder treat your team. This is the part that should make you feel good about what you are providing to people.
This one is a no brainer. Have an awesome product or service and people will knock on your door asking to help build it (eventually, hopefully).
If your product isn’t sexy, groundbreaking, or cool, the ‘A’ players you want to hire to help you build it will simply not want to work for your company. In this case, you may need to settle with ‘B’ or ‘C’ players, and that is something you should try to accept early on before you waste a bunch of time, money, and recruiting efforts on hunting the best of the best.
Maybe ask yourself this: If a recruiter approached you, would you leave your potentially high paying, cushy job and take a risk on your idea? If the answer is no, it’s probably time to think of something else or settle with ‘B’ or ‘C’ talent. A way to make up for this is to offer equity along with long term contracts and/or have an awesome company culture and perks.
Aik Deveneijns builds teams for startups at his company LevelUp Ventures. He hired over 200 professionals and conducted over a thousand job interviews for fast-growing tech companies. He was previously COO of SEOshop (exit to Lightspeed POS) and venture capitalist in the European VC team at Gimv. This post originally appeared as three separate articles, and was co-written with Rebecca Belknap.
Image: Breather @ Unsplash