February 25 , 2017

The Top 10 Startup Recruiting Errors — Why Startup Recruiting Results Stink

As seen on ERE Media on February 10, 2016.

If you regularly deal with startups as I do, you already know that most of them have a painfully weak recruiting effort. This is a huge problem because every startup needs to grow but they can’t because they face a constant shortage of skilled talent. And paradoxically the negative impact on the business gets continually worse, because if your startup is not growing, it won’t be able to attract additional talent or funding.

The root causes of their poor recruiting results occur primarily in only two areas. The first is that startups use out-of-date recruiting tools. And the second is that without guidance from professional recruiters, startup leaders routinely make major recruiting mistakes. Fortunately, most of these recruiting mistakes can be easily remedied, provided that you know what they are and why they severely damage your recruiting results. This article covers the top 10 most serious recruiting errors that are made by startup leaders and their hiring managers.

The Top 10 Recruiting Errors Made At Startups

If you work at a startup or a small business, you probably already realize that your recruiting effort is floundering and that it is getting worse every day as the job market continues to tighten. These common errors are highlighted below, with the most serious ones appearing at the top of the list.

  1. Underestimating the economic damage from weak recruiting — when you only have dozens of positions, every single position is critical to success. So when any position goes unfilled for a significant period of time or when a new hire in any position is weak, the negative impact reverberates throughout the organization. Most startup leaders fail to quantify (in dollars) the impact of weak recruiting on business results, new product development, organizational growth, and on gaining future funding.
  2. Failing to identify where the problem is in the funnel/recruiting process  examine the recruiting funnel (the phases of the recruiting process) in order to see where the real problem is occurring. You must identify if the major problem is that your firm is not well known, you are not getting enough applicants or low-quality applicants, you are mis-assessing candidates, or are you failing to effectively sell them. If you don’t know the precise recruiting steps that aren’t working, you are likely to seek a solution in the wrong recruiting phase. Often the problem is with your hiring managers, who simply don’t have the expertise or the time to recruit effectively. Sometimes a better alternative is to borrow the Google approach and to put together a hiring team that can learn and improve over time.
  3. You have not turned every employee into a 24/7 talent scout using referrals — regardless of the size of your firm, employee referrals are the fastest way to attract quality talent. The secret to referral success is getting your CEO to accept the role of chief recruiting champion and to turn every employee into a 24/7 talent scout. Of course, you must educate your employees on how and where to find and attract top candidates. Give your employees well-designed “referral cards” that leave a major impression when they are handed to potential recruits. Be sure and encourage employees to refer “for the good of the team” (rather than the reward) by demanding that your employees refer only their very best colleagues to ensure that their teammates don’t have to work alongside average people. Ask employees to assess every referral on their technical skills, their cultural fit, and their willingness to join the firm. And always ask new hires to make referrals on their first day. Because startups have fewer employee “talent scouts,” expand referral eligibility to include “friends of the firm” including friends of employees, vendors, employee relatives, and customers. Referrals also work for college students.
  4. You don’t make it easy to “feel the excitement” at your firm — your startup may be an incredibly exciting place to work, but unfortunately it’s probably almost impossible for an outsider to feel that excitement. Start by realizing that narrative descriptions don’t excite. If you want outsiders to actually feel the excitement, use stories and authentic videos made by your employees. Pretest your materials to ensure that those that view them leave excited. Most startup leaders fail to create a company sell sheet that employees can use to sell your startup. Identify your selling factors by talking to your own employees and especially new hires to find out why they joined and why they stay. Make sure that your key selling points coincide with the attraction factors and the job acceptance criteria of your ideal recruiting targets.
  5. Failing to fully “understand” your recruiting targets — a critical step in recruiting at a startup is to focus your recruiting on top candidates who are not in the job market (i.e. passives) who may be 25 times more impactful than average hires. But currently employed individuals are hard to sell, so in order to be successful, fully understand your target recruits. Fully understanding them requires market research that helps you identify 1) what specific factors will attract them and turn them off; 2) where they might find out about a job opening (i.e. social media, job boards, referral from a friend, etc.); and 3) what criteria would they used to accept or reject a job. Start with a “recruiting behavioral profile” using your current employees to find out these three things. Obviously, use your “ideal candidate profile” to refine your recruiting process.
  6. You improperly use fit assessment — rejecting candidates prematurely because they don’t fit is a huge but common mistake. First of all, clearly define what you mean by fit. Next, most people can adapt to a different culture, so look for adaptiveness and the ability to learn rather than fit. At the very least, put fit assessment last so that you don’t drive away qualified candidates before you have a chance to see their capabilities.
  7. You make applying for a job painful — according to Indeed, 9 out of 10 potential applicants drop out of application processes because it is so painful. In order to maximize applications, they must be able to apply using only their mobile phone, and the application can take no longer than five minutes. The best application approaches at least initially use a LinkedIn profile rather than requiring a resume, which might take time for the candidate to update.
  8. Your interviews are dull — almost no one looks forward to traditional interviews, so shift to a “professional conversation” approach. Start out by using peer interviews because they are simply more effective at both assessment and selling the candidate. You can also excite any candidate during the interview by showing them that your company will meet each of their job acceptance criteria. Provide them with profiles that will excite them about their future teammates. Give them real problems to solve, rather than asking them dull predictable interview questions that don’t predict on-the-job success. And, as an added benefit, by giving them problems, you also gain the solutions that candidates provide. You can also use the current hiring process to capture the names of future prospects by using the 27 names strategy, which asks interviewees and candidate references for additional names of top talent.
  9. You assess the wrong competencies — many startup firms look for skills, experience, and competencies that simply don’t predict success on the job. In most cases, a college degree, grades, the school they attended, and the fact that they haven’t worked at a startup shouldn’t be used. Instead look for competencies that are much better predictors of success, including learning ability, the ability to adapt and deal with ambiguity, and the ability to innovate and then to execute their ideas. In addition, convince your managers to be satisfied with up to 25 percent lower qualifications than they initially wanted, because most hiring managers ask for qualifications that are unrealistic and unnecessary.
  10. Failing to fully understand and sell a startup’s recruiting advantages  don’t assume that as a startup, you are at a disadvantage when it comes to recruiting. Although you may not have a well-known employer or product brand, you still have many recruiting advantages, including the excitement that comes with starting something new. There is a certain panache associated with working for a startup because everyone knows that you are a risk taker, an entrepreneur, and a pioneer. Even though you may work insane hours, you know that you will be part of a cross-functional cohesive team and community that will share the pain with you. At a startup, you will likely have the opportunity to operate with little structure and hierarchy and few rules. And because of the small size, you will have a chance to make some high-impact decisions, interact with executives, and to simply make a difference. And with all the risks come the possibility that you could become wealthy in a few years and you will always have the bragging rights that you got in on the ground floor. And if the startup grows, you will likely get promoted rapidly multiple times. 

Final Thoughts 

Obviously, if the goal of your startup is to change the world, you need to realize that the probability of that happening decreases dramatically when you have weak recruiting and retention efforts. So if you want to become the next Facebook or Google (where “hiring is the most important thing you do”), you will need to make dramatic changes. Start by eliminating the common startup recruiting problems. And after you complete that effort, move on to learning about and adopting the most effective startup recruiting tools. The future happiness of your employees, your customers, and your investors depend on it.

Author’s Note: If you enjoyed this article,  please connect with me on LinkedIn

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.