How to Hire for a Startup
As part of the founding team of a startup, I’ve seen our company RateHub grow over the last six years from three people to around 40 today. We’ve had our fair share of hiring growing pains, but we’ve learned a lot along the way and have honed in on what works for this type of company.
After all, hiring the wrong person is expensive. There are “hard” costs like recruiting and training and secondary costs like the impact of employee turnover on your company culture and customers.
We have built an amazing team of top performers at RateHub that have propelled us to become a profitable and impactful fintech player in Canada.
Here are my five tips on how to hire for a startup.
1. Don’t neglect the job description.
The first step in hiring for a startup is to write a job description that attracts the right type of person. Highlight your company culture as specifically as possible and outline the basics of startup expectations: this is not a 9-5 job and team members are expected to be responsible and effectively manage their schedules to achieve amazing amounts of important work. This will excite startup people rather than deter them. Yes, the ping-pong table and free snacks or whatever tech office perks you’re offering are great, but so is the work. Get candidates on board with your vision and what they will be building and how they will be supported, and clinch the deal with the perks.
Take the time to put something together that stands out from the pack.
2. Tailor recruiting to the role.
Sometimes posting a good job description on LinkedIn and Indeed is enough and you’ll get a surprising number of attractive candidates. We’ve found this to be more true for junior and marketing roles. But you should always mine your network and encourage your employees to do so too.
For technical and design roles, it’s completely different. Unless you’re Google or Shopify, you may find it difficult to connect to good talent in today’s competitive marketplace. Headhunters can be expensive but are a good option for companies lacking time for outreach or in-house HR capabilities.
As for interns, which tech expert Erin Bury has referred to as the “co-op tax credit.
3. Institute task-based testing.
One of the biggest changes we’ve made to our hiring process over the years is introducing task-based testing. Resumes, interviews and even work portfolios are not enough for most roles.
Tasks vary depending on the role but one of our favourites at RateHub involves sending candidates an Excel file of 25,000 customer leads and asking them to make scheduling recommendations to our CEO for the sales team. We keep it purposefully ambiguous and simple to see what the candidates come up with. Some people opt out, some send us an email or simple Word doc, and then the superstars send us a polished presentation with recommendations supported by data analysis. This is indicative of the problem-solving capability and drive to output you can expect from the candidate going forward.
4. Add purpose to the personality interview.
Personality and culture fit interviews can lack insight if you avoid asking hard questions and if you accept easy answers. If a candidate tells you being a perfectionist is a weakness, tell them to try again. RateHub has lifted many questions from this list compiled by Business Insider on the favourite interview questions of Elon Musk, Richard Branson and 26 other highly successful executives. My personal favourites are “what would someone who doesn’t like you say about you?” and “tell me about your failures.” It forces candidates to be forthcoming with their weaknesses and also illustrate if they learn from their mistakes.
I also love DISC personality assessments. They are a less detailed and a less personal alternative to Myers-Briggs. Tricia Ryan, a Toronto-based business coach, says DISCs are focused more on communication styles and how teams can work effectively together, with fewer conflicts. The DISC assessment is based on four scales: dominance, influence, steadiness and compliance.
This is especially useful for new people coming on the team, so they get a crash course on how to work best with their colleagues. It’s useful knowing, for example, that Steve from Product doesn’t like small talk and wants you to get the point as quickly as possible and Jackie from Design loves small talk wants to tell you about her kid’s latest achievement.
5. Hire slowly, fire quickly.
Startups have to hire superstars. When you’re competing against established players or entering a new market, your team can be your competitive advantage. You can’t afford to employ under-performers or those with bad attitudes. It will hinder growth and bring down the momentum of the above-average team you’re building. At this stage of the company, each person has a proportionally big impact on the organization. Take your time to hire the best candidate, and don’t hesitate to move on if they are not working out. It will allow you both to forge ahead with better opportunities.
