Hiring talent is not an exact science, like HR for startups, it is an art and mistakes can rack up. Medium and large-scale organisations can overcome any mistakes over time through development, coaching or even re-hiring. For a startup there percussions of a wrong hire can be extremely disruptive and costly at a time when focusing on your product is critical.
Being resource-crunched means you cannot afford to make hiring mistakes, especially when every mistake becomes increasingly more costly. It is estimated that a bad hire can cost up to 30% of an employee’s annual salary, enough to force a startup to stick with a bad hire and suffer the consequences rather than search for a suitable replacement. So, if you are actively hiring for your startup, take note of the following common hiring mistakes that startups make and learn how to avoid them.
1. Ignoring Behavioural & Cultural Fit
Yes ,technical skills are critical in a startup employee. They need to have a variety of skills that will enable them to work with many different technologies and platforms. However, what is equally as important is their ability to fit with your startup’s culture. They must be able to work with the rest of your team in what is a highly ambiguous and stressful environment. For this to happen, there must be a behavioural fit between the new hire and your existing team. A lack of which can lead to a variety of problems such as conflicts between team members, poor performance and misalignment of team objectives for example.
If you want to avoid creating a psychotic team who are constantly at loggerheads and rather create a high-performance team that delivers results, then it is vital to ensure that the team have complementary behaviours. Though note that by ‘complementary’ we are not suggesting they are the ‘same’,rather that they work best with each other.
Remember:though diversity is important you can’t throw random parts together and hope that they will magically create a functioning machine.
2. Hiring People Who Think Alike
We all tend to find it easier to work with people who think like us and this is especially true of startup founders. Unconsciously they tend to hire people who are like them, which can create many problems. Think about it: if your startup is made up of 2 people who think alike, then the number of people who can solve the problems that you cannot is ZERO. That is why diversity is important.
People from diverse backgrounds, cultures, and ethnicities bring different perspectives, experiences, and approaches to life. Which means that they will have very different strategies to solve the same problem.Being able to recognise how to blend diversity in your teams without compromising cultural and behavioural fit will allow you to create a high performing, innovative and creative team.
A point to consider though is that too much diversity is also undesirable, as it can lead to conflicts and tension between the team members. You have to learn to strike a balance.
3. Inability to Articulate Your Employee ValueProposition (EVP)
Attracting top talent for a startup can be extremely challenging. Being new to the market, you may not have a recognisable brand and/or may not be able to compete with larger startups in terms of salaries.
In your quest to attract quality talent, you may over-promote your company and team ,which can leave the employee frustrated and disengaged when they realise that the nirvana they had been sold is not exactly the case. A well defined clear employee value proposition (EVP) can help attract the right talent based on mutual needs and aspirations. It will separate you from the other startups in the market by communicating your unique selling point. It provides an accurate window into your startup culture and environment, allowing potential hires to align what they want in a work environment with what you have to offer. It also weeds out individuals who are not a fit for your culture, saving you both from making a mistake.
When developing your EVP ask your team what made them join and what makes them staying the company? Think about what makes your startup truly unique. And remember when interviewing what can also help build trust is to to be transparent with a prospective candidate telling the good, the bad and the ugly.
4. Hiring Risk-Averse Candidates
A very particular set of people thrive in an unstructured startup environment – people who are not afraid of uncertainty, who are resilient, who see patterns in chaos, and who can see the big picture when everything around them is falling apart. These are the people who are ready to give up their current comforts, growth, and security to be part of something that could be truly magnificent.They are prepared to suffer in the short and medium-term for the promise of explosive growth in the longer term.
Ask yourself – is the person before me ready to give up years of comfort and security to be part of something that has huge potential? If your gut says No, then do not hire the person.
5. Hiring for Brand
This is one of the most common mistakes that most organisations not just startups make. Brand, be it education or work experience, can be compelling and for a good reason. The unconscious bias it communicates is that if the candidate was accepted by a respected institute or organisation, then they must be “good”. Granted, a respected brand may be one benchmark for judging the quality of talent, but not always. It does not validate the person’s ability to thrive in a startup world, their ability to work in an ambiguous and volatile environment, or their ability to come up with creative solutions to a problem.
Assessing these skills and suitability to work within your startup requires an interview process that is aligned to identifying cultural and behavioural fit from internal and external perspectives. For example, apart from meeting a wide cross-section of your team ask external stakeholders for their feedback. Even consider asking your reception, if you have one, for their perspective, they see your employees every day so they will have an understanding if someone will fit in. Another way to assess is to throw in some disruptions during the interview process and see how the candidate handles it.
The more layers you peel, the more information you will gather to help you make the right hiring choice.
Research shows that 23% of startups fail because of their employees. Paul Graham of Y Combinator said that hiring the ‘wrong team’ is one of the top 3 reasons for a startup to fail. For a startup, it’s crucial to get the hiring right as every single person counts. You do not have the resources or the leeway to support a mismatched employee. Having the right hiring process in place can help you avoid the common pitfalls that other startups fall into.
Hiring the right people from the start not only helps you build a high-performance team, it also supports you in embedding and strengthening your organisational culture.Which, will determine the quality of talent that you attract in the long run.