Finding talent is hard enough. Finding talent when you're a small startup that no one's ever heard of is even harder.
"The whole recruiting process introduces a lot of different challenges," says Tammy Han of First Round Capital, a seed-stage investment firm, which helped fund past startups like Uber, TaskRabbit, Warby Parker, Square, Looker, and Planet Labs. Tammy's job is to help recruit employees for First Round's roster of fledgling companies, many of which are too small to have in-house recruiters of their own.
"They compete [for talent] with other startups," she says of the small companies she works with. "And, they compete with huge companies with a lot of capital and a lot of resources.”
Competing with household names presents a challenge for anyone who’s trying to recruit talent for these startups, or “early-stage companies.”
So how do you find talent when you're a tiny, unknown company trying to get off the ground? Tammy shares some recruiting tips that startups and new companies in all industries can use:
1. Go with what you know - mine through your network
If you're a startup, your best and easiest source of talent is the people you already know. "Most times, founders don't think to look there first," says Tammy. "You might have come from a great company, great schools, great professional networks [that are] a good place to have early exploratory conversations."
People in your network may be more willing to listen to your recruiting pitch because they know you. As an added bonus, they can also provide honest (and free) insight into your recruiting efforts. "Hopefully, your friends will be honest with you," she says. They'll tell you if your recruiting goals are too aspirational ("You can't expect to hire a head of marketing who is going to own 20 initiatives," she says).
So if you're a startup that has limited resources, it's essential to start with the people who are already in your corner. "So many times there are people that are not immediately obvious but they're in plain sight," says Tammy.
2. Have someone who dedicates at least 50% of their time to recruiting
A lot of early-stage companies don't have a recruiter on staff. Tammy says for many of those organizations, it becomes yet another job done by the companies' founding execs, who tend to be over-extended as it is.
"In between product development, selling, customer development, fundraising, and everything else that a CEO and an early-stage founder need to keep their lights on, we've found that when you don't make it someone's official job to focus on recruiting, you can't ensure that you're going to have a great team," says Tammy.
She says each company needs to have someone — be it the CEO, the head of business operations, or an in-house, contract and/or third-party recruiter — who devotes at least 50% of their time to source and recruit candidates.
"You can't expect to have talented people at your company happen magically or through luck," she says. "You need to make the time for it. That time can be everything from writing those outreach emails or reaching out to your network. If you don't spend the initial time up front, you're not going to be able to have great results."
3. Don't meet with every single person who's interested in your company
As you're scrounging around for talent, be judicious with your time - resist the urge to meet with everyone who comes inbound to you expressing an interest in your company.
"Sometimes when you move from nobody knowing about you to, all of a sudden, people are interested in speaking with you, it does become a large part of your time," she says. "If you're allocating 50% of your time to meeting with people who aren't a fit for your company’s needs today (or ever), that's a waste of your time that could be better spent building product, or meeting with the right candidates for a long-term fit at your company."
So be selective with the meetings you take. "For founders, their most precious resource is time," says Tammy. "They should be spending it meeting with the right people."
4. Be candid with candidates about the less-than-pleasant realities of the job
It's no secret that working at early-stage startups may involve a significant pay cut (in exchange for equity), a chaotic, deadline-driven atmosphere, and a stressful workload, shouldering the responsibilities of multiple individuals. Tammy says it's important to be direct and upfront about those topics early in the process.
"I do think a lot of times, founders and hiring managers fail to disclose the uncomfortable topics upfront," she says. "The worst thing you can do to a potential hire is oversell them on an opportunity. And then have them walk in on day one and have it be something else."
So, says Tammy, honesty is the best policy.
"You should be clear about your current reality and just see how they react," she says. "That's very telling early on to see if you should continue investing time in engaging with that candidate."
5. And be especially honest about salary
Suppose your young company can only offer a base salary that's below the typical market rate, but it is willing to offer a generous equity package. Like other difficult topics, Tammy suggests it's best to let your candidates know that relatively early in the process.
"The people who tend to value equity compensation more are those who are a better fit for early-stage startups," says Tammy, noting such candidates care more about building something and benefiting from the company's long-term success than raking in a bunch of cash upfront. "[They] are aware that it's a situation where they need to be flexible for the right opportunity to make that impact, to have that ownership that they're seeking."
Yes, there will be candidates focused on optimizing for maximizing their salary. If it’s your dream candidate, you might be tempted to go over your intended budget, just this once, and agree to a way-above-market salary in hopes of landing them.
Tammy recommends against this. "I encourage companies to be conservative in paying for talent," says Tammy, adding that overpaying for a candidate might cause parity issues with your existing employees, who signed on with you for lower salaries. She suggests you stick to a formulaic compensation system and paying market rate — or maybe just a little more if there's a competing offer. "I don't think you should lose a candidate over a nominal amount of money,” says Tammy.
But if you can’t attract a candidate without breaking the bank, you might have to accept that it’s not meant to be.
"If money is the thing that matters most, that candidate isn't the right fit for you," says Tammy. "[Recruiting] might take a few weeks longer. But it's better to invest in the person who’s there for the right reasons, and believes in your long-term vision."
She adds: "The right people will join your company for the right amount of money."
6. Don't abandon your recruiting process
Because of the competition and deadline pressures startups often face, they might be tempted to circumvent their screening process to pounce on an available dream candidate before he or she gets snapped up.
"Never abandon your process," Tammy cautions. Yes, if that dream candidate becomes available, you can accelerate that process. But Tammy advises avoiding shortcuts.
"If you're hiring an incredible engineering leader, this person has to earn the respect and trust of their fellow engineers," she says. "If you don't vet them technically and this person doesn't have the right type of output that you're looking for, you're setting yourself up for failure. Make sure that you've determined 100% that they're a clear fit before moving forward and bringing them onto your team."
7. Don't just recruit the candidate; recruit their significant others too
If you're an early-stage company, Tammy suggests involving your candidate's spouse or significant other during the decision-making part of the process — especially if you’re a small, unknown startup going after someone being courted by bigger, and better-known rivals.
"The candidate may have offers at companies like Facebook and Google and [you're] in stealth [a startup that hasn't publicly announced its existence yet]," says Tammy. In situations like this, you need to not only address the candidates’ concerns, but the spouse’s too.
How can you go about this? Tammy suggests asking if the candidate has talked to their wife or husband and what they think. “Sometimes the spouses may raise concerns: 'How can you abandon our children's private school tuition for this company?' Making sure that their candidates' spouses have the right data points to help them make a decision is something startups should invest time in."
The spouse or significant other just might be the deciding factor in whether your dream candidate signs up with you. "They're part of that emotional decision and will be in their spouse's ear as this person comes to make a decision," says Tammy.
8. You can't afford a bad candidate experience
Of course, making sure every candidate you interview has a positive experience is an important task for every company, regardless of size.
But for startups, it's essential. After all, if you're a little-known company, you don't want the first thing someone hears is that their buddy had a bad experience interviewing with you.
"Every touchpoint should be a meaningful, thoughtful one," says Tammy. "Candidate experiences with your company should be more customized according to what they're looking for."
Suppose you have a candidate who has a family and everyone at your company is younger and earlier on in their career, as is often the case at startups. "[The candidate] might have some initial hesitation because they might not know if they will be able to have their nights and weekends with their family," says Tammy. So you might have to take special care to show this candidate that yours is a culture that can embrace and accommodate everyone's situation.
A good candidate experience also means keeping them engaged even after they've accepted your offer, but before they've started. "So much happens between them accepting your offer to them starting on day one," says Tammy. "As soon as they go back to quit their current job or they go and update their other prospects [companies] that, 'Hey, I'm joining this company," everyone's going to try to sell them against you."
You need to make sure that you stay engaged with them to remind them why they decided to take a chance on you. "You need to do everything possible to keep them engaged and excited," says Tammy, "and move forward with that momentum until they're actually showing up at your door on day one."
9. Never stop recruiting
Once you’ve made it past the startup stage and you've become more established, it's no time to take your foot off the gas with your recruiting efforts.
"Recruiting should always be a priority all the time because as your company grows, you need different people and different talent pools," she says. "Always be recruiting' is something that we encourage in all of our companies. It's your future and you have to treat it like one of your priorities, or you're not going to have the organization that will sustain long term. Your success is your people."
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Topics: Small business
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