No Need to Beg: How to Attract Start-up Talent
If human capital is key to business success; Do you have the right strategy to attract and keep the best?
A typical Start Up will have a small founding team and they will include a mix of skills – Management, Sales and Technical. But once the business is in Go Mode, and particularly if the business is externally funded or burning scarce Founder capital, then it needs to get moving fast and become revenue positive as quickly as it can. This almost certainly means growing the business functions and adding new people and skills to build the team’s resources.
One option is to use freelance workers or outsource to find talent. This can be as a short term stop gap or a long term strategy. As Founder of People per Hour, Xenios Thrasyvoulou notes:
“If workers’ attitudes to self-employment have changed, so too have those of employers. With business confidence still fragile at best, there has been a huge increase in companies hiring freelancers, rather than taking on full-time staff.
From their point of view, freelancers are the ultimate in flexible workers – they can complete agreed tasks for an agreed fee, and there is no obligation to keep them on afterwards.”
In some roles, particularly creative, freelance talent can be a great way to get work done and even to identify people you might woo in the future for permanent roles. Equally outsourcing a complete business function, like Accounts and Credit Control, can work very well because you can regularly monitor performance and costs and if you are not getting the service you need – move your business.
However, whilst smart working with freelancers and outsourcing is great there is still a need to build up the core team, especially if Company is seeking external investment.
Technology, customers and revenues may all be important to a Buyer, but showing that the business has a convincing plan to retain value, including a team of people who can can ensure continuity after they pay their dollars, is vital. Especially if the Founder is looking for an early opportunity to cash in and find a nice beach!
Smart Investors know this and before they get in, they will look for signs that Founders understand that having a strong core team can be as important to a successful exit as it is to running the business
‘Hire talent. You can achieve far more with good people around you and will be in a far better position to exit if a purchaser can see there is a strong team that will remain in the company’
The fact is that people are the pivot point around which any successful business is created and built. Success is not about bums on seats but about brains working together. In any company the wrong person can be damaging, in a small team it is disastrous.
For example: One good sales employee can make a difference by gaining and keeping customers and generating vital revenue, whilst a bad employee can literally drive them away.
A new engineer who has the right attitude joining a close knit technical team can have a hugely positive effect bringing new ideas, a fresh perspective and often specific skills and expertise. Someone with the wrong perspective, particularly someone who is not prepared to share their intellectual capital and skills or feels threatened by others, can be a seriously damaging influence and demotivating everyone.
Furthermore, bad hires can be very expensive to get rid of; especially if they have joined as a full time employee or on a long term contract.
The question is to where a hard-pressed Entrepreneur can turn to find the right people, how to prioritise growing human capital value and how to avoid bad hires. The hard truth is there is no right answer but it requires effort and it requires thought and sometimes plain old gut feel – is this person right for us? Can we work with him/her? Ask the team; the people who will be doing so day in, day out. Don’t just rely on personal judgement or preferences and definitely don’t just rely on outsiders
Unfortunately for many the temptation is to take the easy option and bring in a Recruitment Agency, leaving them to do what many may perceive as a low level task even though nothing could be farther from the truth.
The fact is that whilst Recruitment Agencies are potentially useful to hire general support staff, many are simply not geared to understand specialist needs. Additionally, you are not their only client. And if they have a rare talent or ‘in demand expertise’ they will mercilessly market that person to the highest bidder. Worse, some people they place into your company they will happily contact in the future to offer them another move.
Just as you make money from exploiting human talent, they make it out of moving it!
Then there is laziness. Many Recruitment Agencies apparently have a pre-determined sifting process – after all they want an easy life – so if an applicant doesn’t meet THEIR strict pre-determined criteria (whatever that may be and it may not be transparent to you) then quite possibly world class talent, who could have been vital to the success of your business, will slip through the net.
Sadly, in seeking an easy life, experience appears to show that many Recruitment Agencies may casually, possibly unconsciously in some cases, exclude certain profiles including people aged over 50 or those without a formal degree. They will deny this vigorously of course but try finding an Agency job ad for a Senior Vacancy or an Engineering role that doesn’t have the degree stipulated as a pre requisite. Try applying for a role with a CV that makes it clear you are over 50.I can almost guarantee you won’t make it to the Interview room. As the Huffington Post noted: Silicon Valley has a dirty secret age discrimination.
For Start Ups this is madness, some of the World’s greatest entrepreneurs and innovators are aged over 50 and don’t have degrees! Have they suddenly lost their ability to innovate because they passed the halfway mark and have a few grey hairs?
Surely experience has made them more not less valuable. Bill Gates only has an Honorary Degree awarded in 2007 from Harvard – the University he dropped out to found Microsoft. Furthermore he is over 50. Would you like to have Bill on your team?
How about Richard Branson or Steve Jobs had tragedy not overtaken him? Both probably wouldn’t have got to first base if they applied via a Recruitment Agency let alone be put forward as a candidate. The message surely is Start-ups need to put as much effort into hiring as any other part of their business and be open-minded.
“To be competitive, you can’t rely on recruitment agencies. Their loyalties lie with thosewho pay their fees. Their motivation is much different from your own. They want to make money. You want to build a business.
Smart companies use every opportunity to upgrade their human capital. They use recruiting or talent acquisition to gain a competitive advantage. When it comes to gaining a sustainable competitive advantage, talent is the key; finding talent, hiring that talent and keeping that talent. The company with the most efficient and effective recruitment process will scoop up the best people. Those who are slow will lose.”
Today, businesses have a vast array of tools to use – many of them free. Use social media like Linked in- and not just to advertise a job – but spend time making contacts for the future, look at people, look at their skills, make a connection to them. Often they will be flattered if they see you might be the next company to offer them a new opportunity.
It is a dog eat dog world but you don’t need a head hunter to make an approach – do it yourself and save 15% plus of the first year’s salary.
The smart entrepreneur actively ‘farms Human Capital’ as a core part of their strategy. They are always on the look-out for opportunities to get their business name out there; always looking for talent everywhere; planning for future hires to help them build their business. They increase their credibility and attractiveness to people and open opportunities simply by being visibly interested in how others can help further their business.
It is worth remembering if a business is the sum of its people, then as a living entity it is either going up or down. It may be a very slow growth or decline barely measurable over years but there is no such thing as a long term plateau business. Anyone who thinks they have a golden goose that will carry on regardless will sooner or later find something comes along and kills it. The last decade is littered with whole industries that were certain they were untouchable. Best to make sure it is not lack of talented, committed people that delivers your death blow.