As a startup founder, taking on your first team members is a big step. For the first time, you can think about the prospect of having help to build your venture, so you and your co-founders (if you have them) don’t have to do absolutely everything on your own. It’s super exciting but can quickly become daunting as you realise you don’t really know where to start or how to make sure you hire the right people for your business!
Naturally, you’ll have a picture in your heads of the ideal person you’re looking for, but unfortunately, nobody has developed the technology to construct your perfect employee from thin air, just yet! That means you have to go out and find the skills, experience and personality you need which, with record unemployment and skills shortages - particularly in tech roles - is no easy task.
What’s more, while you’re likely to have a bit of funding behind you, you can’t go too crazy with salaries. The best, most specialist people cost money, and when you’re up against big corporates and tech giants with their seemingly never-ending budgets, it can be tricky to compete.
That’s why it’s critical that you design a recruitment process that gets you in front of the right people and makes you stand out from the crowd. To help you out, we’ve compiled this all-encompassing guide with the help of Agile HR expert and founder of Unleashed, Anouk Agussol - so you have everything you need to do just that. Read our Q&A with Anouk.
1. When should you hire for your startup?
One of the biggest decisions to make is when is the right time to start taking people on and what roles to hire first. Even with some seed or early VC funding, you still have to be frugal, which means thinking carefully about which roles (and their required skills) are going to have most impact on the success of your business.
The order you bring in role types in will vary from business to business, but if your building tech-based products and services, chances are it will go something like this:
- First few hires are engineers (also likely to be the most challenging hires)
- Followed by design and product people
- Then sales, marketing and operations, including finance and talent people
Of course, getting the timing right isn’t easy. You don’t want to invest in new hires until you’re ready, but also don’t want to leave it too late. Anouk agrees that it’s a fine line to balance but offers a few pieces of advice on getting it right.
“I usually advise my clients to start thinking about what they want to be achieving in the not too distant future and as a result to consider which roles that may need to hire. They can then start pipe-lining through attending the relevant events and meeting people. They can write job specs and be ready. But actually hiring, having someone walk in the door for the first day should be held off for as long as possible and until they can no longer avoid it.
“To avoid burning too much cash, try to balance salary with equity so there is lower cash burn and you know you are hiring people committed to long term success. This isn’t easy - the benefits of options schemes like EMI aren’t as well recognised here as in the US - so a bit of education as to their value will go a long way.
"And at the very early stages, only hire people to develop the product. That means tech people. Any salespeople (this is ideally founder-led early doors) should be used to get product feedback and iterate. Once you have a great product that is selling, then hire your sales people to ramp that up."
2. Designing a 7* recruitment process
To stand out from other startups and big brands, Anouk advises to think upfront about what a 7* recruitment process would look like (taking inspiration from how AirBnB have tried to design their customer service experience), to ensure that candidates have the best possible experience from start to finish.
“It’s about taking design thinking and applying that to recruitment, to build an above standard, candidate focused hiring journey,” she explains.
“That means having empathy for the candidate experience, and having two-way open, honest and totally transparent discussions about the good, the bad and the ugly – ultimately they’re interviewing you as much as you’re interviewing them - it has to be right on both sides to work”
It’s really important that the process doesn’t drag for each candidate. This is a matter of both respecting their time and life circumstances but also, to avoid losing them to other businesses who can make decisions better and faster than you.
“If someone isn’t right, let them know quickly and give them actionable feedback so that they feel it was a productive process regardless.
"On the flip-side, if you find someone amazing, triple check their amazingness and if they still are, then move fast, as they won’t hang around forever,” advises Anouk.
“This doesn’t mean to say hire fast for each role - in fact you should hire slowly - but each candidate should have a super timely experience.”
3. What skills, experience and personalities do you actually need for your startup?
Also surprisingly difficult, is working out what skills, experience and personality you want in your new hires.
There are a couple of pitfalls to watch out for here. Firstly, many founders are tempted to just hire a ‘mini-me’, who can pick up all those tasks that they no longer have time for. But this lacks the long-term thinking that will help to grow the business and build a motivated, loyal and diverse team that represents the diversity of their clients.
Some founders go crazy and set out to hire their start-up "dream team", of superstars, but that is way more than what they need right now. And while that might work out great in the short-term, if you’re burning cash, you might end up having to make redundancies before your next funding raise. Anouk’s advice: “Grow your team as slowly as you can.”
So, what’s the secret to getting it right?
Start with the "why?"
Anouk explains that "founding" a role is similar to founding a business, involving – in the words of Simon Sinek - focusing on the "why?". That means...
- Defining the expected impact / the purpose of the role. what problems are you look for the person to solve? Why does that role exist? Every person in a business should be able to answer this question.
- Defining the objectives that you expect them to meet. AND equally as important, how do they align to the objectives that you are trying to achieve as a business. If there’s no direct link, then can you justify the hire? Having strong objectives that they are required to meet will help you find a person that will have the capability of meeting these. Plus both they and you will know what success looks like.
- Defining the key responsibilities that you would expect of them. Keep this very high-level. It enables you to define the role without getting bogged down in their day to day work. If they have objectives and measures of success, it’s up to them to work out how to get there, enabling that much wanted and needed motivation tool, ‘autonomy’.
Understanding these key elements will help you to define how senior the person is, but again you’re likely to be driven by budget and might not be able to afford somebody with exactly the skills and experience needed to deliver.
Anouk suggests: “Try for your first hires to be on the more senior and experienced side. If this is not possible due to salary expectation, look for people driven to learn (all hires should be) and take on someone with the best attitude who has more mid-level experience and get them a mentor to develop their technical competence. Developing skills can be easy enough, developing the right attitudes and personality to thrive is far more difficult.”
Defining people "fit" for your business
So skills are just one part of the puzzle. You also need to think about culture fit, something that Anouk stresses is absolutely critical in early-stage businesses.
“Be clear on what ‘fit’ looks like, as the impact of your first few hires is disproportionate and can make or break you,” she explains.
“A ‘bad apple’ can cause serious and expensive problems, not just in product delivery but also external reputation and motivation and collaboration amongst the team. Ultimately, people thrive from working with great people - it can build huge emotional commitment. As a founder, part of your role is to provide them with this.”
She advises carrying out a "fit exercise", which is similar to defining your values but you can do this from the very beginning. They often evolve into your values and are at the very least super closely aligned. . The process is simple.
- Self-assemble and ask everyone around the table to describe themselves in 5 words - does everybody agree.
- Do the same but talking about weaknesses, or areas of development.
- Ask them to do the same with a person (any person) that they admire
- Then, 5 words that describe people that you don’t admire.
- 5 words that describe businesses that you admire and 5 that describe businesses that you don’t admire - and why, of course. The conversation about the why is very important,
- With a looking into the future hat, have your team describe how they would like your business to be spoken about in 3-5 years time after you have achieved global success.
- Lastly, you group all the common words together (to form an umbrella term) on the positive side and on the negative side. This will result in a) A LOT of stickies everywhere and 2) in 3-5 words that define what you need now for ‘fit’ and as you take your business into a growth phase.
From here of course, you then need to make sure that you design great questions into your process, as well as great ways of finding evidence for the above so that you can start to identify those characteristics.
What is your employee proposition?
This is also the moment to think about what kind of package you want to be offering in terms of rewards, perks and benefits.
To get an idea of what the going rate is, speak to your network, or do a search of job adverts in your space, and benchmark. While you might not have cash to splash on expensive perks, most people will get that from a start-up.
Opportunities that highlight development, being involved in being part of the founding team, having autonomy, the ability to master your role and a sense of purpose go far further than a pool table and a couple of snacks.
Of course from a recognition perspective, personalised vouchers or gifts also go a long way - as long as they are individual.
From a cash perspective, a bonus for when the next funding round comes in can help to ‘keep the eyes on the prize.’
4. Writing a startup job description
Once you’ve been through all the previous steps, this next phase should be easy-peasy, as you should have a really clear idea of what you’re looking for and what you have to offer.
It’s also really important that you structure your job descriptions in the right way, to make them stand out and entice potential candidates. And for that, Anouk has kindly lent us her template for a startup job description, which looks something like this…
- Paragraph one: An overview of your vision and mission, including why you are in existence, your purpose, what you believe and the difference you make. You’re aiming to get buy-in from your reader straight away. Get them hooked on the fact that you are solving something important!
- Paragraph two: Dig more into the detail of who you are as a business, including market size, ambition, the size of team, whether you’re back by a VC and, if so, who else they’ve invested in. This helps candidates get a better understanding of the risk profile of the business.
- Paragraph three: Next, what do you actually do? How are you achieving your ‘why’?
- About the role: This is where you bring in all of the ‘why?’ analysis you did earlier, explaining the purpose and high-level impact you want your ideal candidate to have. Avoid including day-to-day responsibilities, as autonomy is key. Remember, how they achieve the desired objectives is up to them.
- What we’re looking for from you: Here, you include any specific experience, skills or values that you want them to have, so experience with certain technologies, certain types of business, or a certain style or approach to working.
- What you’re offering them: Finally, details of the package. You don’t have to specify a salary but outline the benefits and perks that come with the role, including whether you have an equity share scheme. In addition, be sure to focus on training, development and opportunities for growth, as most candidates value this as highly as pay and other rewards.
5. Talent hunting
With your preparation complete, you’re now ready to get out there and start your hunt for talent – and this is where the hard work really kicks in.
First up, make sure your amazing job spec is on all the right websites and tailored for the roles that you are recruiting for. Design thinking comes into play here to. Where are your ideal candidates, what are they reading, how can you reach them. Speak to them and find out!
While advertising is a really important part of the puzzle, unfortunately you’re unlikely to find that simply posting an advert will mean you’re suddenly inundated with amazing candidates. It’s never that simple, which means you should also consider one of the following:
Use an agency:
If you want to find people fast then a reputable, well connected recruitment agency is a good bet, as they have the contacts and manpower to find what you’re looking for. The downside? They can be expensive. Although on the plus side, you only have to pay if they find you somebody.
When looking for an agency, ask for recommendations and find one that specialises in the type of role you’re looking for, e.g. tech, marketing etc or one that has teams of specialists like welovesalt.com.
Anouk advises not to negotiate heavily on commission but don’t pay more than 20-25% either. Agencies will work hardest for the roles in which they will reap the most benefits. Instead, negotiate on exclusivity, tell them the role is theirs for a rolling two week period and as long as things keep moving quickly and fruitfully then they can retain this exclusivity.
Bring in a team of experts:
If you’re looking to hire for four roles or more, another option is to outsource your entire recruitment needs to an ‘RPO’ (Recruitment Process Outsourcing) company like Scede.io, which specifically focuses on tech and product roles, or like Talentful who can do most roles. They’ll provide an ‘in house’ recruitment partner for a few days per week, for a monthly retainer, while you’re scaling up your operations.
“If you have the budget this can be really valuable as it means you have an expert immersed in your team, so they can build up a really good understanding of your culture,” explains Anouk.
“It also means they can help with the whole process, from advertising to interviewing, from scheduling interviews and coaching you and your team on how to interview.”
Hire a contractor:
Similar to the above is to hire a specialist contractor to manage the process for you.
Some contractors just specialise in the recruitment piece, or you may want somebody who will support you throughout the whole process, from deciding what you need, to onboarding new hires.
But again, specialist expertise isn’t cheap, with costs ranging from £400 per day for recruitment on its own, and up to £1,000 per day for more diverse expertise. Sometimes though, the short term investment can most definitely be worth it for the long term.
Getting out there:
If those options are out of your price range, then you’ll be well served by getting back to good old-fashioned networking, PR and head hunting to reach the people you want.
That means talking at relevant Meetups, sitting on panels at industry events, writing blogs and searching on relevant websites (try Stack Overflow, talent.io, hired.com and snap.hr for tech, Kandidate for sales, marketing and operations), LinkedIn and AngelList.
From a LinkedIn perspective, it helps to have a Recruiter-lite account or Premium profile, as these offer better search functionality and let you message people who you’re not connected to.
However, when contacting people directly, who aren’t actively looking for a role, it’s important that you get the messaging and tone right:
“The best people are sadly regularly spammed so do explain clearly and personally why you are contacting them. Highlighting that you aren’t from an agency can often help.” advises Anouk.
“Then be sure to communicate your vision. Don’t put them under any pressure but share as much as you can with them upfront. This will save your time and theirs as they have all the information they need to decide on whether or not to have a chat with you (this is your objective). Then if they’re interested after this initial conversation, progress to the usual fit and practical assessment stages, as you would with other candidates.”
Do you need an applicant tracking system?
When it comes to managing applications, unless you have loads of time on your hands (which we’re guessing you don’t!), then set yourself up with an Applicant Tracking System (ATS) like Teamtailor (very candidate focused), workable or greenhouse (if you have a lot of money). There are others of course.
An ATS will help you to easily manage incoming applications, rejections and meeting scheduling, as well as building a careers page that won’t require the time of your development team.
6. Assessing candidates
“I hate CVs, as I feel that too many of them don’t provide the right information,” Anouk told us.
“If you do use them, don’t spend too much time on them, and prioritise those that really stand out as it shows people are making the effort to set themselves apart. Also look for evidence that the person has had the impact that you’re looking for in your business (this is the most important thing), and have they quantified and given details of that impact?”
Anouk also advises businesses to always do phone interviews, as these enable you to rule out any unsuitable candidates quickly.
Then if there are no red flags from that an initial chat, invite them in for an interview and to meet the team.
When it comes to interviewing, you don’t need tonnes of stages, like Google or Facebook. As a start-up, unfortunately you don’t have that luxury!
“Practical assessments are really important, as is getting them into the office environment to see how they fit with the culture,” explains Anouk.
“Assessments should test at least one element of the role that they are interviewing for. So, if the role doesn’t involve presenting, then don’t ask them to present. Consider pair programming for tech roles, or if they’re a copywriter, ask them for a writing sample, or to deliver a short piece of relevant text.
"Getting them into the office to do the practical assessment or work-sample can be a really effective way of seeing how they work with you and your team, how they ask questions and collaborate. There is no better way to find out how someone might perform in your work environment with your real problems than by ‘assessing’ them directly in that environment!”
Finally, a last stage that can be hugely beneficial is to invite potential hires to a social situation with the whole team - a drink or a lunch for example. This will enable you to check culture fit, as well as check for any red flags in a relaxed situations.
7. Employee Due diligence
Once you’ve found your perfect person, there are just a few final bits of paperwork to do before signing on the dotted line. So, when you make an offer, you need to let the candidate know that this is pending background checks, including:
References are really important, for two reasons:
- Firstly, to check that a candidate’s job experience is what they say it is. For example, that the dates, companies and job roles all check out, in addition to understanding whether or not the impact they say that they had was true.
- Secondly, speaking to previous managers can also help you to create an onboarding plan that caters to your new team member’s strengths and areas of development.
“Don’t automatically be put off a candidate if a previous employer doesn’t have a glowing report of them, as it may just be a difference of values and a bad fit all around (particularly if the individual already flagged that their experience with that business wasn’t as successful as anticipated),” advises Anouk.
“Speaking to as many references as possible ensures that you get a good overview of their past experiences and what will work for that person or not.”
If a new hire is going to be handling and transacting with clients’ money, then you’ll need to do one of these to ensure they haven’t previously been bankrupt or had any County Court Judgements against them or been charged with fraud. But only do these kinds of checks if absolutely necessary, not as a matter of course
Right to work in the UK:
You can be fined up to £20,000 if you can’t show evidence that you have checked an employee’s right to work in the UK. So this is super important. Really try and establish their right to work in your first phone chat and then get copies of the paperwork that proves this at this stage.
8. Legal considerations
You also need to have some safeguards in place to ensure that your business is protected against certain risks that come with being an employer:
Statement of terms:
Employees are legally entitled to a written document containing information such as their pay, working hours, holiday allowance and benefits, within two months of starting work. It is also in your best interests to have one, as it protects your business against things such as intellectual property (IP) theft, breach of confidentiality etc.
“But bear in mind that any stipulations you include of a contract need to be reasonable, otherwise they won’t be held up in a court of law,” advises Anouk.
You can find contract templates online, however if you have specialist needs then it’s advisable to have one drawn up by an employment lawyer.
Employers liability insurance
As soon as you take on your first employee – whether on permanent, part-time, freelance or contract basis - you are legally required to have employers liability insurance.
EL will cover you if an employee claims they sustained an injury or became ill as a result of working for you.
It will also help you avoid potentially expensive fines to the Health and Safety Executive, whose job it is to ensure you fulfil your responsibility as an employer.
Legally required policies:
There are five policies that you are legally required to have by law:
- Disciplinary procedures and rules
- Grievance procedures
- Information about pensions but you can include this in your contract
- Health & Safety if you have more than 5 employees
The following four have strong legal reasons for including - Bribery; Equal Opportunities; Data Protection.
Everything else is optional but as you grow having something light touch is helpful. Speak to your lawyer - or try one of the new breed of digitally-enabled legal service providers like Farillio - or an expert and get copies of these.
Anouk advises that these are tailored so that they reflect your culture in tone and voice as much as possible, but at the very least, just have them and have them accessible to all in your team!
For the optional ones, you really just need something that shows that you expect people to do the right thing by you and you by them - after all you are hiring adults.
It might seem daunting the first time, but hiring subsequent staff does get easier, once you have a scaleable process and paperwork in place - and as your reputation grows amongst the right people. But the most important thing is to invest the time in finding the right person, while also moving each candidate through the process as quickly as you can.
“Make sure that you are excited by the prospect of the individual joining and that you feel sure they are the best person for the role,” concludes Anouk.
“If it takes a number of months to get the right person then so be it. But always be thinking about the candidate’s perspective and experience of your brand. If someone isn’t right, say no quickly, and move on.”
Our next blog in the series will be right up your street too:
Recruiting the right person is just the start of the journey. Because despite all that time and effort put into hiring, you might be surprised to learn that there’s a one in five chance that your ‘perfect person’ will quit within 45 days, and a one in three chance that they’ll quit within six months. So, what should you do?