Hiring 101 — Closing the Candidate
So the interviews went well, and you want to hire this candidate. To figure out the compensation package to offer, look at:
- Your runway, budget and hiring plan. Some of our portfolio companies have found candidates that have a broad enough skill set to effectively cover two planned hires.
- Level compared to current employees
- Level of risk in terms of how early she is joining
- Industry and portfolio data. You can look at other job adverts to understand a geographical benchmark for a given role.
- Their current compensation package(salary, equity, bonus, commission structure and other benefits)
- Previous work experience and education
- Competing offers(Although though these are usually not taken into consideration until negotiations. Don’t get into a bidding war!)
Be transparent with your candidate about all these factors.
Controlling the compensation discussion
As early stage startups, there are limitations to what you can offer, and candidates don’t always understand the unique proposition. Hopefully you have already highlighted your unique position and how they complement what’s important to your candidate. Most importantly, you’ll have allowed your candidate to see how this won’t be just another job.
Ideally, money would be just a small part of why someone would join you, so make sure to focus on the importance of the role, team, mission and future. You should be open about your compensation philosophy and be prepared for the common worries people have when considering joining a startup:
“Startups don’t provide job security.”
It’s hard to accurately predict job security, but working in a technology startup definitely provides career security.
“I won’t make any money.”
Startups typically provide modest salaries, but equity is a long-term commitment to creating value. If money is the sole motivator for this person, then this probably isn’t the right kind of proposition for her.
“I want to work in a big company where I can learn from others.”
This one is trickier; some people want the mentorship of others in the same role. Candidates may often be the only one in their job function at startups, especially on the non-tech side. But learning by doing can be the most effective and empowering way to learn. You might want to consider countering this argument with a modest budget allowance for conference attendance or external training courses.
Remember, not everyone is a fit for startup pace, dedication & culture. It’s important that you feel you are not losing out when making a hire. Giving too much ground during a negotiation can lead to elevated expectations and ultimately resentment. A great hire is a win for everyone involved.
Making the Offer
Leave room for negotiation if at all possible. However, if you feel certain that you only have one option for the compensation package, let them know that and be transparent about why that is.
If you offer is at the top end of what you’re prepared to pay, make sure the candidate knows this, and let them know why this is the case.
Making an offer isn’t about getting to the smallest number a candidate would be prepared to accept.
The excitement of joining a startup may give them a brief enthusiasm, but for a new employee a material change to the quality of their life will ultimately make their position untenable.
Signing bonuses can be useful tools for helping to get your candidate over the finish line.
If she wants a higher salary but you believe it would break your salary structure, a signing bonus is a one-time way to help your candidate feel valued and accept your offer.
Have offer conversations in person.
A phone call is a second choice, with the CEO/founders. If you can, avoid setting a deadline for the candidate’s acceptance. People shouldn’t join because they feel forced to: they should join because they believe in the vision and mission you’ve shared with them. However, remember that recruiting speed is especially important to an early stage startup that only needs one (or a few) people hired at any given time, so agree on a reasonable decision timeline together, taking into account both the candidate’s search and your company’s needs.
Finally, be confident when making the offer.
It’s okay to ask the candidate questions — how does it compare to other options? How excited is she? If you could agree on financial terms, would she accept the offer?
Ask her how you can help with the decision-making process. Are there other people she’d like to talk to? Offer thinking time and be responsive to more questioning after this time. In a lot of cases people join startups from a seemingly more ‘secure’ corporate life, this is a big decision to make.
Have interviewers, teammates and investors reach out with their support and offers to chat. Invite her to social events or team meetings. Send along exciting news about your team or special touches, like the team t-shirt or access to the product you’re making if appropriate.
Originally published at thekingsshilling.io.
