Hiring In a Competitive Market
The talent market is as competitive and aggressive as anyone has seen. Senior executives and top tech people have never been harder to secure.
Typically, when a startup is hiring, it seeks to leverage the networks of its team, its founders and its investors. These efforts certainly provide valuable leads and perhaps a few hires. Going a step further, existing networks provide benefits beyond cost savings and convenience. People that have worked together in the past are well-positioned to out-execute those that haven’t, due to their common history, language and relationships.
All this said, tapping informal networks doesn’t scale and reacting to inbound people-flow generates an adverse selection bias — the best people are not looking, so they will never contact you or respond to your job posting.
When I worked as an in-house HR Executive, I was initially skeptical of expensive, sales driven recruiters. I thought hiring a 3rd party firm represented a failure on my part as Talent Executive. After all, it was my job to find and secure the top talent through my own efforts and the network I could access. However my years of recruiting have taught me that internal startup teams are at a distinct competitive disadvantage if they don’t get outside help for recruiting.
Here are the top five reasons why:
1) They Never Have Enough Time.
Internal teams are always battling and dividing their efforts into proactive time, (where they direct the activities through their own energy) versus reactive time, (where their are reacting to people and forces around them.) With the inflow of real-time information and people coming at them from all sides and demanding their attention (management, employees, candidates, etc.) it’s hard to find enough proactive time in the day. Recruiting the best and brightest people is a proactive exercise. It requires effort and energy to generate candidate flow, meet candidates and build relationships to uncover the best and brightest people. It is therefore important to have an outside force building these relationship on behalf of a company, and push the internal team to react to candidates and help them prioritize the recruiting effort.
2) The Hiring Staff is Inexperienced.
Most startups don’t hire an HR or recruiting team member ’til they’re well funded, late in their Series A spend. When they finally do hire a dedicated person this person is typically a first time recruiter who simply does not have a lot of experience hiring — particularly the broad type of hiring required by startups. Ask your favorite in-house startup recruiter, or HR person how many times they’ve hired a Director of Engineering or Sales Director — let alone for a startup. Most never have. Even if they’ve done it once or twice in the past, are they really now an expert at it? Like anything else, hiring is a science. A VC partner once told me, “Knowledge that creates real value isn’t gained in a moment. It’s gained through many diverse moments built on top of each other.” Too many startup teams don’t actually know how to interview well. Further, they’re not experienced at assessing their current human capital needs: analyzing the gaps in capacity, then understanding the market and how to fill the gaps. Startups have unique hiring challenges which require unique experience. Good recruiters are invaluable in this regard.
3) They Conduct a Shallow “Culture” Fitting.
Culture fit is one of the most important aspects of building a highly engaged team. This is important for any company, but especially important for startups. Busy recruiting teams and busy hiring managers typically do cursory culture fit testing when making even senior hires. They allow themselves to be swayed by their own conviction, willing to let the candidates spoon-feed them their own message and ignore the opportunity to push for a deeper understanding of a candidate’s’ motivations, purpose and engagement triggers. When I make a hire for my company, I typically do 5 to 8 reference checks to get a wide variety of perspectives from people who have worked with the candidate in the past, and have seen them in a range of different situations. It’s hard to have the discipline to replicate this thoroughness when making a startup hire, particularly when trying to move quickly in a competitive hiring market (see: “They Never Have Enough Time” above.)
4) They Don’t Understand the Selling Process.
Many startup recruiters and hiring managers do not realize that the due diligence process for a candidate is as thorough, if not more so, than your due diligence on them. The best candidates have choices and are sought after. Even though you are deciding whether to “buy” over the course of a series of interviews, you need to be in a position to properly “sell” every step of the way. While you may believe that you company is the best the candidates have 5 options that are equally as interesting (see: “They Conduct Shallow ‘Culture’ Fitting” above.) A Senior Data Engineer recently told me, “Every startup believes they’re game changing. I don’t want to hear their sales shit. I want to hear why they exist, and what they’re doing to tackle this challenge. I’ll then decide if they’re “game changing,” and if I’m excited by their purpose.” Recruiters can be very helpful in managing the selling process — proactively surfacing objections, handling them with data and follow-up conversations, proactively linking candidates to the right people at the right time in the process.
5) Closing Isn’t Made a Priority.
Closing candidates in this competitive a market is very hard. Counter-offers, compressed timeframes and personal considerations all get in the way of smooth closes. Again, if you don’t have a lot of proactive time available — and who does?! — there’s great benefit to having a focused Closer. Further, I have found having an Intermediary helps tremendously with the negotiations. A candidate will not be afraid to tell a recruiter what it takes to get the deal done. A seemingly tough back-and-forth with the help of an Intermediary can avoid bad feelings aftewards between two principals who need to work together as a team when the dust settles.
Too often I hear startup teams say, “A recruiter is too expensive. We’ll work our network for a bit then eventually hire an internal person.” Many Entrepreneurs are overconfident about their own recruiting prowess and will tell their team to dig into their networks and surface some great candidates. The problem, of course, is that everyone gets busy and distracted. A few weeks turns into a few months, a few candidates are interviewed, then discarded. Only when the network comes up dry, the group reconvenes and decides to hire an internal recruiter. They’re then faced with the situation that their newly minted internal recruiter isn’t positioned for success because of the aforementioned reasons. All this leads to startup teams turning to the professionals — the 3rd party recruiter. At this point massive amounts of effort have been lost, the pipeline is dry and the whole team is frustrated including hiring managers, founders and the board.
“Be strong enough to stand alone, smart enough to know when you need help, and brave enough to ask for it.” — Ziad Abdelnour
Is hiring a professional expensive? Not as expensive as hiring amateurs, or not hiring at all. People, more than any other asset, will make or break your business. If you hire an amateur you’ll get amateurs. Don’t leave hiring to chance, or allow staffing to create expensive downstream problems, especially when there’s a viable solution upstream.
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Hi! I’m Zeb, the Founder of tech recruiting firm Blackprint. I’ve made it my goal to shift the way recruit ing is viewed and reintroduce the human factor to talent acquisition. I’m always open to challenging conversations that push the limits and, most importantly, promote growth. If you feel the same, say hello!
