Blog

3 ways Startups Recruit + 1 That Works

Recruitment is broken, in particular for startups. Talent is key to future execution power; and perhaps your only true differentiator. The talent you hire will help build your IP, your brand and will drive your traction. They will prove your business works, will continue working, and is scaleable.

So, for various reasons, recruiting through the good ol’ job boards yields tons of weak applications and hardly any talent:

A young high-growth company does not have the employer brand to attract talent. Typical Amsterdam companies that have great employer brands are TomTom, Booking.com and –until the layoffs- Spil Games, with Travelbird going strong. Some examples of US tech companies with strong employer brands are Uber, AirBnB and Tesla. The difference is that in the US, there is a keen interest on upcoming startups, whereas in many European hubs, only a small group of people are aware of the new kids in town.

Job boards are frequented by the less talented and the unemployed. Let’s be honest: when did you last visit a job board? The unemployed, disheartened by many rejections, broaden their search and apply for jobs for which they do not meet the criteria. On top of it all, they need to meet their minimum required job search activities to be eligible for their social security allowance, a specific issue for the Netherlands.

So job boards might be a basis at best to acquire applicants. But startups know job boards usually don’t work, and try to circumvent this in three ways:

1. Hiring People You Know

Startups trying to fix recruitmentThis tends to work, as you already know whether the candidate is capable, and you can make a well-informed assumption on how she will perform in a given role. The main drawback is that this recruitment model doesn’t scale. There is a limit to the number of potential candidates you know. It is a finite supply of candidates, and will probably not satisfy your company’s growth hunger.

Pushing a new employee referral program does help in sourcing more candidates. Good people know good people. As your company matures, you want to deploy specific applicant tracking software that leverages the social networks of your employees. Lever and Workable are solid solutions in this field. After you have initial hires from referrals, you can best market your referral plan internally by communicating the incentives you recently paid out.

2. Outsourcing to External Recruiters

Some entrepreneurs outsource the recruitment process altogether. This is horribly value destructing. The external recruiter (or headhunter) is really only working for you about 25% of his time. And then you still need to do a lot of work yourself.

Headhunters are great sellers. Their sales method of choice is cold calling. They will spend roughly 25% of their time on it. And then they start working for you, searching and screening candidates. So what happens with all the talent that you don’t hire? Yeah, those get added to the recruiters talent pool, not yours. Luckily, the recruiter is ‘managing the recruitment process’. He makes sure he understands the candidate’s concerns, to make them go away. Then he does the the same towards the employer, ensuring the candidate’s qualities are well-understood. All this, to ensure the candidate gets hired, and he gets paid. Turns out, this guy you are paying is actually not working for you but for himself, quelle surprise!

In my own days at a headhunter, we would invoice 33% of the yearly remuneration (including salary, pension, on target bonus and holiday allowance) for the search and selection of marketing and sales professionals. We would invoice €50.000 for a single hire without batting an eye. We needed to, as we had to spend so much of our time on selling and process management.

The external recruiter can’t convey the culture, opportunity, growth strategy or the vision properly. You need to explain him exactly what you are looking for before he can start. And at the end of the day, you will be spending a lot of time determining if you want to hire the candidate anyway.

3. Eating Plankton

Collect as many applications as possible, do a mediocre interview, hire more people than you need, and just replace employees as they fail. It’s how whales eat plankton: just push water through and see how much sticks. The drawbacks are apparant:

The process is time-consuming!

It will cost you in jobboards, salaries and severance packages. It will hurt morale, your company culture and the trust your employees put in you. If the new guy is disposable, than they could be facing the same fate.

Nevertheless, the adagium remains: hire slowly and fire fast. Hay Group and Ebbinge researched differences between succesful and unsuccesful PE/VC-backed companies. They found the hiring processes to be similar. But succesful investors monitor (management) performance closely post-deal, and fired quickly if neccessary.

I urge you to do the same. Without exception I have seen employees who were let go become more succesful in their next position, bumping their happiness and confidence; sometimes even being grateful.

So these three approaches, as well as the job boards aren’t sufficient. So what to do?

You should be recruiting yourself.

And not only you. Your entire team.

Use job boards only for entry level and common positions, for all others: source, hunt, refer, build relations, build your employer brand, invest. When it comes to recruiting: Always be closing!

Go out on LinkedIn, Google and other social networks and find the people fitting your job profile. Find the people fitting your future job profiles. And if you know the positions are going to be hard to fill, you’d better start pitching your opportunity and building relations now.

Skip the junk applications and go out yourself. You only need to sell the candidate the opportunity. And as an entrepreneur, you are doing that all day anyway.

You may want to use a LinkedIn Executive or recruiter account to more easily search and have more InMails. You may want to use tools like Connectifier or 360social that give you direct access to other social networks of the person you are viewing. The tools often give you a direct email address that you can use, yielding a higher response rate than through LinkedIn InMails.

Applicant Tracking System’s like Lever and Workable have great sourcing functionality built in. If job boards integration is important to you, and you are in the Benelux, give Recruitee a spin; they integrate really nicely with about 50 job boards (of which 14 are free of charge), and they will integrate sourcing capabilities in their platform very soon. Hunting is a science and art in itself, and I will delve deeper into the topic in a later blog post.

Go out there, spend two hours a week on sourcing. It’s one of the most value-creating things you can do.