10 steps: the ultimate guide, written by a founder
Now that you took the plunge and started your own company, you might find yourself to be overwhelmed. From worrying about the product to figuring out marketing, raising capital, and how to get your first customers. There are a lot of things on your plate. This article teaches you how to hire employees for startup businesses, broken down into ten actionable steps.
And somewhere in between all of that, you have to find the time to actually build your team.
Hiring the first employees for startups and small businesses is a huge milestone. After all, your team is what will make or break your company. But where do you even begin? How can you find the right people to join your team and help you achieve your goals?
Imagine, what if…
✔ you could shift from doing everything, to leading a team to doing some of the things for you?
✔ you could count on your people to get things done so that your time is freed up to be more strategic?
✔ you could intentionally build a company culture that makes people passionate about working with you?
All this is possible if you have a hiring process that improves your chances of success with the interview process. One that was tested and replicable.
Setting up your hiring process will take some time, but it’s worth it. Hiring early employees is exciting, but while each new employee brings the promise of opportunity and growth, they also bring risk and potential liability. Slowing down and being patient might not be in your DNA as an entrepreneur, but taking the time to do it right in the early stages will help you increase your track record for successfully hiring employees, build a positive culture as your business grows and set yourself up for future hires.
Here are the nine steps for hiring your first employees:
One: Define your company’s core values
Before you jump right in and look for your first hire, you must take the time to lay the groundwork, and that starts with your company’s core values.
In order to have a team that is going in the same direction as you, you must first describe what direction you want to go in and what your core values are.
Contrary to popular belief, everyone on your team doesn’t need to be as passionate about your company as you are. They most likely won’t be. But the right person needs to know where the company is headed and the role that they will play in the vision.
Other founders of early stage startups get this wrong. Not surprisingly, most startups fail.
Two: Decide what you want to delegate. Here’s how:
As your company grows, be a happier founder by delegating what you don’t like, aren’t very good at, or simply don’t have time to do.
Don’t just wing it, or go with your gut. Do this exercise so that you can keep doing more of what you love, cut out what you don’t like – and get very clear on what to delegate in your business.
Over the course of a week, make a list of whenever you feel great (doing something you LOVE), are miserable (doing something you DON’T LIKE) as well as things you’re simply NOT VERY GOOD AT, and those you NEVER HAVE TIME FOR.
List some ideas of how to INCREASE doing what you LOVE. These are items NOT to delegate!
Look at the Don’t Like/Not Good At/Never Have Time. What would you LOVE to delegate?
Number in priority order the Top 3-5 items you would MOST like to delegate.
Now circle the 3-5 items which are EASIEST to delegate – or get some help with.
Finally, place a T against the items which would save you the most TIME.
Review the list and choose 3 items to delegate to your first employee.
Three: Create Compelling Job Descriptions that Convert
According to an Indeed survey, 52% of job seekers say the quality of a job description is very or extremely influential on their decision to apply for a job.
From the time that you post your open positions, you are creating your startup’s candidate and employee experience. Just as it’s not enough to give your employees a job description in the form of a to-do list and expect them to be successful, it’s also not enough to expect to find the right candidates from a job posting that lacks inspiration.
Go beyond the typical job description and create inspiring ones that make people want to join your team. Don’t worry, I’m going to tell you how to do that now, and it’s not that hard if you follow these steps.
The elements that you must have in your job description are:
Make the title as specific as possible, especially if you’re posting the job online, use a job title that the people searching for your role will understand. Company lingo can be confusing to job seekers so stick to standard language if you want to reach more candidates.
Include your mission and vision, accolades, growth plans, core values — anything you think is important regarding the company culture that you want to create.
Mission of the role:
Each role plays part in your company’s mission and each role has its own mission that works toward the company’s mission. The mission statement in a job description is a set of carefully chosen words that clearly communicate the purpose that this job plays in your business. It also helps define the metrics you use to determine what success looks like for the role and will guide the employee’s decisions once they are in the role.
Expectations and outcomes of the position:
What needs to get done by the person in this job? How will success be measured in this role? Everyone wants to be successful, so it’s important to be clear about your expectations. This will also help you to retain employees.
Responsibilities and duties:
What exactly will this person be doing — What are the day-to-day activities of this role?
Qualifications and skills
Be careful not to list too many qualifications and skills, and focus on what’s important. For example, specific years of experience may not actually be critical, or even an indicator of a candidate’s success and may dissuade the right applicant from applying. Ask yourself questions like, “Is a bachelor’s degree really essential to this role?”
Salary and employee benefits
Vagueness is the enemy of entrepreneurship and it’s also the enemy of job descriptions. Quality candidates want opportunities that align with their salary expectations yet most job descriptions omit that important information. You’ll save time, attract better candidates, and stand out from the rest (70% don’t provide salaries) by adding the salary range. Do you provide benefits? Let people know even if you don’t. Note, some states in the U.S. now require that employers post salary ranges on job postings.
Call to action
Provide a specific call to action on how you want the candidates to apply. This is the first opportunity to see how they handle assignments and follow directions.
Four: Identify the best options for you to source candidates and choose at least 3 to use
Don’t just ask yourself who you know, ask yourself “Who knows me?”, and “Who do I know who can refer people to me?” As a founder, a significant amount of your job is to always be on the lookout for top talent.
Where are the best places to post your job openings online? This depends on the role, geography, whether your job is remote, hybrid or in-person, and what technology is needed for the role.
3rd Party (Agency) Recruiters
3rd party/agency recruiters might be an option for you if you’re looking for harder-to-fill roles like software engineers. Here are some tips when working with recruiters:
- Define the role you’re looking to fill, as described above
- Find a good agency that specializes in recruiting for your industry
- Make sure you’re both on the same page regarding compensation
- Ensure that the agency understands your company culture
- Get a sense of what the recruiter’s communication style is like
- Make sure the recruiter is actually qualified to do their job
- See if the recruiter has a good understanding of your business
- Ask about fees and be prepared to negotiate, but note that negotiating lower fees may make filling your job less compelling to the agency, so try to stay competitive
- Get everything in writing before moving forward
- Be responsive and give the recruiter timely feedback
Freelancing online services are a place to find part-time, temporary help without all of the headaches of hiring full-time staff. Fiverr, for example, is an online platform for virtual freelance services all over the world where you can find people to do all sorts of work, like graphic design, logo design, business plans, financial projections, and lots more. You can find long-term support employees on Fiverr, but you can also try people out for small tasks to see how they do. Read more about Fiverr here.
Five: Systematize the way that you decide which employees to hire
Now that you’ve defined your core values, identified the things that you love to do and the things that you’re good at, and created compelling job descriptions, it’s time to create your hiring system for attracting, interviewing candidates, and making an informed decision about each potential new employee.
Here is a breakdown of how to create your interview process:
Use the mission statement that you created for your roles to create a
Candidate Evaluation that you will use while sourcing, screening, interviewing, and evaluating candidates.
In order to evaluate your candidates, you must have a clear definition of what the person needs to be able to accomplish in the role. These are expectations or outcomes.
Your Candidate Evaluation will serve as a valuable resource in the future to review performance, address poor performance, reward good performance, and provide a blueprint to continuously ensure you have the right people in the right seats
Core value match up
Have a written list of your company’s core values in all of your interviews. Put a + or – next to each core value, to remind yourself whether or not each person is the best talent for the job.
Hard Skills match up
Repeat the match-up process, with your best evaluation of how likely it will be that the candidate deliver. Of course, you don’t have a crystal ball to see into the future and you will likely make some hiring mistakes. If you’re in business long enough, you’ll eventually need to fire someone. But this process helps to remove some of the bias from hiring and it will save you time and stress.
Six: Create your Interview Process
The way that most people interview is not a predictor of the candidate’s success in the job.
You must make an effort to base your decisions on facts, not on gut feelings.
A long term study of job interviews by the The Society for Judgment and Decision Making, of Fortune 500 companies showed that most interviews did not predict on the job performance after 1 year. In other words, companies could have randomly selected names from a hat and probably had more success in finding qualified employees. Or just selecting based on resumes.
In the book Work Rules, ex-Google HR executive Laszlo Bock explains that companies that have a structured interview process can create a more consistent and objective screening process. Unfortunately, most companies don’t have a structured process.
Prepared candidates study up on what to say in an interview — so if you’re not prepared with systems, you’re basically going into the interview with someone who’s been training to say the right thing.
That’s why it’s so important to systematically interview candidates.
Inspired by the book Who: The A Method of Hiring, by Geoff Smart and Randy Street, I recommend a 3-step interview process where you ask the same questions to each candidate.
Step one: The prescreening interview should last a maximum of 20 minutes and is meant to see if you and the potential employee want to move forward to the next step.
This is where you ask
- what their career goals are
- what they’re good at and what they like to do
- what they’re not good at and what they don’t like to do
- what was they’re last job and what would their manager say about them
Step two: The next interview lasts 45-60 minutes and this is where you get to know the candidate better to see if you still think that they could be the right person.
In this interview, you can ask things like
- How did you either improve a process, make the company money or save the company money?
- What were the challenges of your last job?
- Who were the people that you worked with and how did you work with them?
- Why are you leaving your job, and how have you tried to resolve those issues with your current company?
Step three: The Deep Dive Interview
The purpose of this interview is for me to get a better understanding of things you’ve previously told me and for you to get a better understanding of the role. This is the time for the interviewer or interviewee to address any concerns
Seven: Check References
Create a template for reference checks that you can use any time that you get to this stage but note that many employers will only verify titles and dates of employment. This should not be seen as a red flag as it may be that the former employer is being careful to observe laws that protect their company.
What I ask in reference checks:
- Where did you work with NAME OF CANDIDATE and in what capacity?
- Which adjectives would you use to describe NAME OF CANDIDATE?
- If you had the opportunity, would you rehire (NAME OF CANDIDATE), and for what role?
- The role that I’m considering NAME OF CANDIDATE for is JOB TITLE. What do you think about that?
- Final question – ask about things you have specific questions about related to what the person told you.
Eight: Create your Hiring Process
Once you have chosen who your first hires will be, how you onboard your employees will depend on if you’re hiring them directly, using a staffing agency, or
Nine: Understand Employment Law
Finally, make sure that you understand state and federal employment laws. It’s advisable to talk to a startup lawyer when you begin to hire employees. Many small businesses think they may fly under the radar when it comes to laws for hiring employees, and many violate laws without even knowing it. For example, did you know that it’s not up to the business owner, or even the candidate, to decide if they’ll be an employee or a 1099 contractor? There are IRS and federal laws that govern employee classification, with common law rules.
Ten: Make sure that your Cash Flow supports your hires
I’ve seen this happen time and time again with my clients (and, admittedly myself). It’s easy to get excited and hire team members, thinking that future sales or capital raising are just around the corner. It’s not a good idea to hire based on potential cash flow. Many small businesses struggle with this — don’t let it happen to you. Hire people based on your current cash flow. Only add more new hires when you can afford it. Outside money isn’t always the answer, but you can read here for more information on raising capital.
There you have it: how to hire employees at a startup in 9 steps. Hiring your first employees is a big step for any startup company. By following the steps above, you can increase your chances of success and save yourself a lot of time.
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