The Hiring Mistakes That Startups Make

Whenever startups tell me they can’t afford to hire the best people, I ask 2 questions. 

1. How do militaries get talented people to risk a violent death for close to minimum wage? Yes, some people sign up due to a lack of options. But others join the army from a top business school or an established career, then get deployed to combat zones. 

1. Why is it that people leave great places to work like Google to join a startup, again for typically lower starting pay combined with higher risk?

One reason is the Power of Mission. Most people are motivated by some combination of head (challenge/ learning), heart (make the world a better place) and wallet (money). But we all like to connect with a higher purpose. Defending your nation or revolutionising an industry are missions that resonate. 

Another is Upside. Given the typically wider job scope, experience at a startup can become money in the bank later on - whether at a big company, another startup, or your own business. Upward mobility may be faster too (that can be true not only at startups but even in the military, which at least in America embraced DEI long before the corporate world did).

But in my experience, a lot of startup leaders are surprisingly bad at pitching these assets to candidates. Founders end up hiring their girlfriend’s brother (he’s free at the moment) or their next door neighbour (she’s better than nobody) or the ‘OK guy' (he’s cheap!). Lowering the recruiting bar is akin to introducing a virus into the body that will weaken the system, then replicate. Compromise at hiring time is always paid for somewhere down the road. 

As a side note, SMEs (Small & Medium Enterprises) are often even worse than startups at recruiting. Although they have clear advantages compared with most new ventures - viable products, a solid customer base, and actual profits - they often pitch their proud history over their bright future to candidates, then manage their hired talent much too conservatively. 

I’ve built teams from scratch in several companies, but I’ve never been a founder myself. I don’t think I have the ability, or the courage. But I have coached, connected or partnered with hundreds of startups across the world. So here are a few recommendations when hiring!

1. Vision: ensure everyone involved in hiring is aligned on and able to articulate company Purpose/Mission and Values. Co-create these with your team if they don’t exist yet, which drives broad ownership. If they do exist, revisit them once or twice a year, and do a team ‘Stop-Start-Continue’ exercise on what behaviours will bring this Vision to life.
2. Employment Value Proposition: most founders confront insecurities or imposter syndrome. But you have to articulate clearly the value of working for you and your startup in terms of career and financial success. How will the job be fun, meaningful, and a learning experience…that also pays the bills (now or soon)?
3. Transparency. Many dream of working at a startup. But dreams mean delusions, and that leads to staff turnover. ‘Men wanted for hazardous journey to the South Pole. Small wages, bitter cold, long months of complete darkness, constant danger. Safe return doubtful. Honour and recognition in case of success.’  Irish explorer Ernest Shackleton’s job posting may be apocryphal, but it was a realistic depiction of the risks and rewards.
4. Hiring for Values. ‘Culture eats strategy for breakfast’. Values drive Culture. So hire for Values. If the Will is there, maybe the Skills are teachable? Consider Competencies (including transferable skills and potential - especially since growth means the need to scale ourselves) over traditional credentials. This expands your talent pool. And always ask what is missing on your team. A diverse group means more perspectives, and an inclusive group gives those perspectives a voice. Leverage every employee’s network to Always Be Recruiting, even when you don’t have a budget to hire right now.
5. Getting Culture Right (to attract, engage and retain). 

• Life Paths (where everyone draws their life story on a page, then shares with the group) or comparable exercises build personal trust through vulnerability.
• CliftonStrengths or similar workshops may both reduce conflict and boost collaboration, by offering insights on teammates’ strengths and communication styles.
• Leaders constantly anchoring on Values in their decisions, especially when there is a cost to doing so, will take those principles off the page and bring them to life. 
• Provide managers with a best people practice toolkit. Survey employees periodically to create feedback and improvement action loops for leaders. Manager Peer Coaching can help. Ideally you achieve a level of Radical Candor, whereby team members instead of avoiding feedback will challenge each other directly…because they care. 
• Psychological Safety above all is foundational to team effectiveness. This doesn’t mean everyone taking it easy - quite the opposite. It means feeling safe to take interpersonal risks such as admitting a mistake, asking for help, questioning authority, and floating new ideas. The lack of psychological safety on a team has led to countless real world deaths (plane crashes, military and policy disasters, surgical mistakes) and numerous corporate failures too.

I hope these suggestions spark some new perspectives on hiring for startups. And to all the founders out there - good luck doing what I never could! :)