Startup Hiring Practices are about Scrappiness, Culture and Hard Work, not Arbitrary "Rules of Thumb" --Ken Davis, CEO of TaskEasy

Everyone is quick to offer advice on how best to hire and fire staff. As a CEO of a fast growing internet startup company, I find that most of the hiring advice is too binary, too black and white, and frankly, too rigid to allow me to be human in my hiring practices.

"Most ... hiring advice is too rigid to allow [CEO's] to be human in [their] hiring practices"

Just in the last six months I've heard some of the following advice:

• "Only hire Stanford graduates."
• "Hiring from Ivy League Schools is too expensive."
• "Hire employees with a policy that nobody ever gets fired."
• "Always fire the bottom 5% of your staff each year."
• "Only hire local, or people willing to relocate."
• "Hire top heavy, startups can't afford to not have experienced leaders"
• "Don't hire top heavy, startups need worker bees, not expensive leaders"
• "Only hire people that someone knows"

...and about thirty other conflicting bits of conventional wisdom usually delivered in some sort of absolutist way, which self-fulfills prophecy of failure when I don't comply, and the new-hire doesn't work out. It's easy to predict occasional failure, but it’s much better to brush off occasional failure and focus on createing hiring practices which result in overall, good success.

Let me just say that you will make mistakes while hiring - get used to it. Let me also say that in my experience, good hiring is more about being scrappy and clever, and putting in the hard work, than any single rule of thumb. In the end, it's useful to have your eye on the long term culture you're trying to create, and then be somewhat flexible with the hiring practices you use to get there. Along the way, I've hired and fired hundreds of people and I continue to be surprised at which hires end up becoming my very best hires, and also what practices turned out to be mistakes.

"Good hiring is more about being scrappy and clever, and putting in the hard work, than any single rule of thumb"

For a moment, let's contrast two extremes - I'll call them "bad ideas":

1. "Never fire anyone"
2. "Fire the Bottom Performers Regularly"

...and talk about why these practices are probably not a fit for most companies, even if they might provide some useful insights. After which, I'd like to explore some of the practices that I've found to be helpful when hiring. I'll call them "good ideas" (although I realize that just because I think something I do is a good idea, doesn't necessarily make it so - you'll have to use your own judgement for the ideas you choose to implement).

Bad Idea #1:

Never Fire Anyone

Recently, a prominent company suggested publicly that their new hiring strategy is to never fire anyone. Instead, they want to establish a culture of screening employees well, and then once selected, provide coaching and training to any employee that isn't performing. They want to help the employee become the very person they were originally hired to be, regardless of how badly they perform. I'm going to refrain from even mentioning which company published this practice (as I believe their real goal was to achieve notoriety and publicity by having the practice in the first place and not that they actually believe it was a good practice for other companies. ...And I don't want to aid them in their nonsensical madness). In fact, in their case, they might even succeed in that they are going to get an onslaught of candidates who may be much better than the candidates they have had access to in the past. Some of these candidates will even turn out to be good. But just because they came up with a gimmick that might accidentally work for them, doesn't mean that this is a good strategy for companies in general. This is because:

1. Some number of candidates the company screens will be good at selling themselves, but may not even have an intention of being a good employee - only getting a job where they can't be fired.
2. There are always extenuating circumstances where the company might have to fire an employee: fraud, never shows up to work, harassment, not legal to work in the united states, etc. How can a company even take themselves seriously if they have a no fire policy?
3. If and when the company does need to fire, they've now created a real legal challenge for themselves, as they have no established procedure or practice for firing.

On the plus side, establishing a culture where training and coaching are provided to help good employees become great employees is an important result of this misguided, never-fire-anyone policy. It's also nice to figure out ways to massively increase your pipeline of possible candidates for hire.

Bad Idea #2:

Mandatory Reduction in Force

The second bad idea, (although I'll interject that I don't believe it's nearly as bad of an idea as the one I’ve just discussed) is to have a periodic, mandatory reduction in force. This is a longstanding practice that is still used by a number of well-respected consulting firms. The general idea is that each period, (for instance annually) a healthy company might force-rank all of their employees according to some formula (e.g. output or sales) and then layoff the bottom 5% of all employees, regardless of how valuable the employees may be. My contention with this strategy is that it not as effective when used in startups for a variety of reasons, including:

1. Startups are generally working on high growth and not incremental efficiency. This tactic is more generally appropriate for larger, mature companies that have plateaued in terms of growth and are now trying to increase profit margins through increased operational excellence.
2. Startups tend to be fueled by excitement and creativity, not the fear of losing one's job. When you're already trying to motivate employees with stock options and pizza, telling them that they might lose their already potentially low-paying job if they don't work harder, isn't a very good motivator.
3. If you're managing tens of thousands of people, the law of large numbers tells you that you have a good distribution of top performers and bad performers. When you're managing a hundred people, or maybe just ten people, your performance distributions aren't nearly as clear. For instance, you might have one mediocre employee who is the only person in the company who is capable of keeping the lights on in the Amazon cloud, and you can't just fire them - yet.

Good Idea #1:

Focus on the Little Things

It's so tempting to get caught up in the big things related to recruitment (e.g. salary and title) that it's easy to forget the little, important things: 

• Can a mother bring her newborn baby to work comfortably?
• Is there adequate parking and do people feel safe getting to and from their car before and after work?
• Are the bathroom and break room facilities adequate and comfortable?
• Is there a 401k or other benefit that may not cost a lot to offer, but may be perceived as a real advantage?

Sometimes, these little things are not possible to solve in the beginning stages of a startup. I once had 12 employees all working out of a single room in my basement, and in my current company, I still haven't been able to solve a very real parking problem (too few parking spaces). But when this happens, acknowledge to your employees that you understand it's a problem, and provide them with as much information as possible to let them understand when and how the problem can be resolved.

Good Idea #2:

Turn Negatives into Positives

When focusing on the little, important things, there are often opportunities to turn negatives into positives. With my company, we decided to stay in a space that was slightly too small for our employee growth for another year, in order to force us to have good expense-discipline and achieve better operating margins. By engaging with the entire workforce in the dialogue about why were were choosing to do this, employees became proud of the company’s frugality and wore it as a badge of pride. Senior managers agreed to park in the spaces farthest from the campus to allow more junior employees with a better parking proximity. In fact, the parking spaces farthest away have become the "culture spaces" meaning, we now think of it as a privilege to take the worst spots and walk for a few extra minutes. This has had the effect of improving morale and respect in the company, instead of turning into a festering problem that might have made hiring new employees difficult.

Good Idea #3:

Trust your Instincts

One of the hardest things I've ever had to learn as it pertains to hiring and firing is to trust my own instincts. In particular, there have been many instances in my career where I've known for quite some time that I needed to let someone go, but I held off for months or even years before finally making the change. The irony is that whatever was causing me to most worry about letting the person go (e.g. they perform some valuable function that can't be replaced, or I'm worried about political fallout), has never materialized into a larger problem than the problem of keeping that employee on staff.

The same thing applies to hiring, although this is sometimes even trickier. One thing to bear in mind is that there are certain people that are really good at selling themselves but won't make very good employees, so don't be afraid to dig in to references and past work experiences. Ask lots of questions, and make those questions hard ones. One of my favorite tactics is to ask the candidate what his or her best skill is, and then drill in on that skill until I've exhausted all of my knowledge about that skill. My general rule of thumb is that if someone is given the opportunity to talk about the thing they do better than anything else, then they really have no excuse for not knowing it inside and out and hopefully better than I know or understand it. If I can best them at the weapon of their choice (so to speak), then maybe they don’t possess the depth or ability I'm looking for in an impactful employee.

As you're hiring and firing, learn to trust your instincts. You won't always be right, but even when you're wrong, learn from those mistakes and allow your instincts to be fine-tuned and corrected. That red flag you thought you noticed, but ignored, don't ignore it again. That moment of inspiration when a good candidate impressed you, but then you let the candidate get away, be more aggressive next time.

Good Idea #4:

Don't Fear Change in your Hiring or Firing

Hypergrowth usually requires many continuous staffing and organizational changes. When you hire lots of people quickly, some employees may not be a good long term fit for the company. More likely, they are just playing out of position and their roles need to be moved around. Establish from the very beginning of a startup that lots of roles will likely change as the company grows. Tell people you may need their help one day to hire their own boss, or that they might end up working in a completely different part of the company, and to expect that kind of change. Constantly be interviewing your team members, not just your direct reports, but also the people that work for them. Coach everyone on what their role is presently and verify often that the role they are playing is a role that makes sense.

Good Idea #5:

Be Wary of Mediocre Employees.

Finally, be the most wary of employees that are only mediocre. They consume the most management time and are not as easy to part with as employees that are terrible. They are also not as easy to rely on as employees that are exceptional. If you think about all of your employees on a scale of 1 to 10, 10 being the most amazing employee you've ever worked with and 1 being the worst, 8s, 9s and 10s are easy to keep, 1s through 5s, are easy to fire, but it's the 6s and 7s that are often the most common and hardest to know what to do with. You want to believe they can be just a little better, but you're spending so much of your time on them and they never quite do what you hope, to the point that they just linger in a state of mediocrity. Consider getting rid of them. You don't need the financial or temporal cost dragging you down at this stage of your company's growth.

Conclusion

The title of my article suggests that binary hiring advice is completely unhelpful, yet I go on to provide many strongly-worded suggestions about hiring and firing. I want to reiterate that every manager and every company has to create their own comfortable culture. None of my ideas, even if I think they are "Good," should be hard set rules. Even though I once had a peer frequently joke about how all employees should be called "Carbon Units," (because humans are comprised mostly of carbon) that is not a good attitude to take when responsible for the hiring and firing culture and practice for a company. Humans are passionate, flawed, brilliant at times, and careless at others. We hire humans, not carbon units. Inasmuch, as managers, we have to be creative and flexible in our approach. We have to learn from mistakes and notice what causes success. We have to be sensitive and empathetic, but also strong and structured.