Startups do not have many ways to build a strong competitive advantage in the early days. But startup hiring is one area where this is possible because the hiring process at most large companies is broken. If your startup can build a superior hiring process, this will be a strong competitive edge.
Don’t Outsource Hiring
Hiring top talent is a core skill that startups need to possess and core skills should not be outsourced. That means allocating enough time during the week for actual hiring. If hiring is a top priority, which is usually the case in every startup, then a minimum of 25% of at least one senior person’s time should be spent on hiring. This can include online research, content marketing and in person activities but there is no way to avoid having to invest significant time into hiring if you want to do it right.
Poach, Don’t Wait
The best people are usually not aggressively looking for new jobs. They are probably being paid well, and almost always very busy, although perhaps somewhat discontented in their current role. Posting on job boards, creating recruitment ads and evaluating the applications that come to you will severely limit the quality of potential hires. You have to identify the best possible candidates and then proactively poach them. That means selling them on why they should join your company.
Build a Funnel
Just like a customer funnel improves sales, a talent funnel improves hiring. Identify potential candidates before you need them urgently so that you have enough time to get to know them. Ideally, you will be able to identify specific hiring sources who have strong training programs well suited for your company. This may include universities for fresh graduates or large companies with a commitment to employee training. Stable sources creates a positive feedback loop because your employees will be alumni and in a strong position to identify the best future candidates from their previous home.
Be on a Mission
Startups cannot compete on salary. But the best people are not obsessed with maximizing their yearly income. Instead, they appreciate the value of learning and a meaningful job. This is much easier to accomplish if your company is on a mission to change the world. To be clear, this does not mean lying about what you have currently accomplished. Be up front about all the challenges and problems that are still left unsolved because potential employees will see how and why they really can make a difference.
Use Self-Selection
Once you have identified a candidate and started to communicate, be transparent with your priorities and let them decide if the fit is correct. This requires that you take the time to identify your priorities. Prevention is the best way to deal with bad hires. Of course, not every hire will be a perfect fit. If someone joins and is obviously not working out, you need to understand why quickly and, if needed, make some tough choices. If you have to fire someone quickly, that is a sign your hiring process is faulty and so you need to re-evaluate and adjust your process when this happens more than once in a while.
Most companies have a traditional hiring process. Startups have an opportunity to build a strong competitive advantage by hiring differently. Although successful startup hiring requires investment of significant time and energy, it is definitely worth the effort.