Hiring for Start-ups - 138 Pyramids

Hiring for Start-ups

November 2, 2016

In the 21st century, it is becoming increasingly clear that what truly sets a company apart is the people behind it. While hiring is a challenge in all cases, it is extremely challenging for startups; Working in a high intensity, and constantly changing, environment to refine its recruitment process, as well as having to adapt frequently the original strategy to meet with the speed of the changing market place. The Egyptian entrepreneur may have a little more to overcome – you are up against the security and stability that is offered by an established corporate, in addition to operating in a historically risk-averse culture, yet it is that environment that builds strong enduring entrepreneurs.


We can offer some tips for you to start growing your business– from deciding when to hire, to welcoming your new employees to their future home, after all we tend to spend more hours at work than we do at home as entrepreneurs.


When To Hire

The most important thing to know as a young entrepreneur is when to hire. Resist the urge to hire when you’re desperate or stressed – feeling overwhelmed is not necessarily the only indication that you need to bring someone on board. More importantly, don’t hire when you are not sure of your future employee’s role. Making a hiring decision without identifying a clear role within the business will not only divert from results, but rather leave you with an ineffective and a confused employee.

The decision to hire is not an easy one. At 138 Pyramids, we advise our start-ups to hire “as much as needed, but as few as possible”. This is often a difficult but crucial balance to strike, especially at the early stages when you need to be bootstrapping your expenses. Remember, every hire has a cost implication – incurring more fixed salaries and increasing your overhead is an early burn rate that you have to calculate, not just from a business point of view but also for your long-term credibility towards your employees who are to trust your judgment and know that their pay is secured. This essentially means an increase in operating leverage or risk (i.e. the risk that your gross profit won’t cover fixed costs). This is a dangerous scenario for young businesses, and will ultimately affect your company’s financial health.

So when do you hire? Simple. Hire when the tasks to be done will generate money. Employees should either be saving you money or making you money – with the latter being much more important at an early stage. In order to ascertain whether this is the case, only hire when you can identify a need that will increase revenue. For example, hiring designers and developers to create a product or content has a direct revenue implication.

What To Look For

The decision to hire should also be made when the tasks you have identified fall under a specific skill set, because you have to know what kind of employee you’re looking for. A “jack of all trades” may seem desirable for a start-up, while having someone who can serve a cross-cutting function may be helpful, specialized technical talent is more important for a startup. However, in reality you hire the talent needed who is ready to offer more than just his/her job, as it is still an early stage start-up the hire is ready to pitch at whatever can be offered.

It is also important to understand the difference between what you want and what you need. Being a business owner often means putting the needs of your business ahead of your personal likes.

That said, you don’t have to do it on your own – nor should you. Hiring is a skill just like any that needs practice in order to be acquired. So consult contacts that have experience hiring for specific roles – get their advice on the best sourcing channels, tips for reviewing resumes, insightful questions to ask, and how to make your final decisions.

How To Hire

Your future hire isn’t the only person who has homework to do – you should too! It is crucial as an interviewer to be as prepared as your interviewee. Have your questions ready, and refine your recruitment “elevator pitch”. How will you present your company? How will you convey your hiring needs? Remember, you are not just filling a vacancy; you are developing your company’s reputation. Turn your “rejected” applicants into brand advocates so that, even if they don’t get this job, they will still think of you as an aspirational place to work. Referrals are the most powerful tools for young entrepreneurs to build their team.

Along with preparedness, transparency is key in the recruitment process. As a start-up, you are still undergoing a period of refining and re-defining. Both your staffing needs, and company goals as a whole, are subject to frequent changes. It is important to let prospective employees in on this. If you do not manage expectations, you will witness a noticeably high turnover in your staff. More importantly, by being honest with prospective employees, you will be able to pulse a key character trait – adaptability.  Your ideal candidate should not only accept the potential of change, but should be both challenged and excited by it.

Finally, remember that hiring doesn’t end with that contract signing. New hires, especially in start-ups, need support during their first few weeks. While your time as an entrepreneur is spread thin, this is something you must invest in to create a healthy and effective corporate culture. Refine your onboarding process. Make your employees feel like family. Remove barriers and provide them with the resources and knowledge they need to succeed. Make sure that they are continuously learning as they are on the job. Once you make that investment, you will get a return that goes beyond your P&L.

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