HR & Employee Management Articles

5 Common Startup Hiring Mistakes and How to Avoid Them

by Karen McCandless
Published on 28 October 2015

A line up of people with an arm pointed at them

If you wanted to figure out how to hire for startups you could do worse than turn to a startup that builds hiring software.

Nikos Moraitakis, CEO of Workable, sums up his experience here: "Your first five hires pretty much picked themselves, but in getting from 5 to 50 you will need the best tools and analytics, and you will need to be systematic. It's about more than ping pong tables and bicycle racks."

The scale of the challenge is often underestimated. Hiring for a startup is the critical challenge and there are pitfalls on the road to creating your ideal team.

Moraitakis explains: "I talk to high-growth startups every day and I keep hearing versions of 'compared to recruiting, fundraising was easy'."

"Just like fundraising, it's highly competitive. It takes time, preparation and selling, and getting it wrong can slow or even kill your startup. It's the hardest thing to get right, so I find it perverse that it doesn't get the attention it deserves."

A bad hire impacts not just your finances (to the tune of well over $100 million at Zappos) but also team morale, productivity, client relations, your company reputation, and your product or service itself (ie your whole business). Here we run through five common hiring mistakes that startups make and provide some advice on how to avoid making them.

Hiring too soon or not soon enough

Do you really need another developer/customer service agent/marketer already? Hiring too soon can mean there is not enough work for your new employee to do, leaving them feeling bored, unmotivated and seeking challenges elsewhere. Or maybe you desperately need someone, but have been putting it off because you're too busy, don't want to spend the money or are scared of hiring the wrong person. This can lead to panic hiring, and a speedy job offer to the first person through the door who has vaguely the right skills and looks presentable.

Instead, it's important to take time to ensure they fit in with the company culture, want to work for a startup, and will get on with other employees. According to a survey from Robert Half, 60% of hiring managers and HR professionals said bad hires don't get along with other employees, and the last thing you want is conflict in your small team.

Rushing the recruitment process

If you work in a startup, you'll be used to moving at breakneck speed with agile processes and rapid results. You may fail, but you fail fast. While you may be tempted to apply this to the recruitment process, it's not a good idea. Take your time to find the right candidate who is a good fit not just for your business, but also for the role. Also make sure you take the time to structure your recruitment. Is your job description accurate (do you even have a job description)? Where will you post your ad? How will you track applications and then invite them for interviews? If you don't know the answers to these questions, then you're not ready to start hiring.

If you do rush into recruiting without any direction, not only will it take you more time, effort, and probably money, but you also risk missing out on the top candidates, either because they think you're way too disorganized a company to work for, you didn't spot their CV in the pile, or they've got another job by the time you make an offer.Your lack of structure might even lead you to hire on instinct alone, as was the case with one Minneapolis-based company.

Only hiring senior staff or from large corporations

Hiring experienced staff that can help you shape the direction of your startup is great, but the last thing you want is a company full of managers who know how to lead and organize, but have forgotten how to actually execute. Any new hire in a startup should be willing to get their hands dirty and do all kinds of different tasks. They also must be willing to hit the ground running, something which can be a culture shock for someone used to working for a large corporation. We're not saying only hire from other startups, but make sure that each new hire knows exactly what they're getting themselves into.

The consequences of hiring someone who doesn't see the need to chip in where needed is a serious loss of productivity as your other staff scramble to try and cover the downtime. In the same Robert Half survey, 39% of hiring managers and HR professionals said a bad hire had cost them productivity. Team morale is also likely to take a nosedive if your other workers feel they have to cover for a colleague who isn't pulling their weight.

Not trusting your instinct or checking references

While you may not know exactly what you do want in a candidate chances are you know what you don't want. If you've got a bad feeling about a potential hire, then they probably aren't for you. And while you may think that because the candidate is a friend or ex colleague of a current employee, you don't need to check references, this is not the case. You should still solicit advice from their references, as well as checking out their social media presence across LinkedIn, Twitter, and Facebook, and performing a quick Google search. You never know what kind of information may turn up, as 53% of all job applications are said to contain inaccurate information.

Think about the time and money you'll have to spend training up an employee who doesn't have the skills you need and the negative effect this training period will have on the quality and delivery of your product or service.

Being afraid to fire if it doesn't work out

Everyone makes mistakes and it's impossible to know for sure if your latest hire will work out. But you could make an even bigger mistake if you hang on to someone you know is wrong for your business or who doesn't really want to be there. Whether it's a mutual decision to leave, or whether you're pushing them towards the door, a startup isn't big enough to carry dead weight. It won't be easy and it won't be pleasant, but you'll both benefit in the long run.

People rating website Karma had a particularly troubling experience when they didn't fire their employee even after a number of loud warning bells. While failing to do this doesn't normally have such dire consequences, delaying the inevitable will cost your business in terms of finances. productivity and morale.

So what should I do when hiring for a startup?

It's not all bad news for your startup as Workable has put together numerous, comprehensive, and free resources for entrepreneurs. These include this essential startup hiring guide and the new Ultimate Guide to Job Posting. The former covers how to write job descriptions, what to look for in a new hire, and how to structure the interview process. The latter is a step-by-step guide to the best practices in posting jobs, including a searchable, global job board directory.

As Moraitakis says: "If you can get great people then everything else becomes so much easier."

This post was brought to you in conjunction with recruitment software Workable.


Apps mentioned in this article