Winning the war for talent — 5 ways to improve your hiring process.

This is the second part in a 3 post series related to startup hiring and growing your organization. If you didn’t read the first part check it out here.

The tech industry in Silicon Valley is one of the world’s most competitive recruiting markets. And hiring the right people for the right job is the single most important thing you do as a founder. So once you’ve prepared yourself and you’re ready to start hiring, how do you actually win the best candidates? Much of this comes down to having a well-managed hiring process. Together with Creandum’s friends at the Bay Area search firms Riviera Partners and True. in this post I’ve tried to highlight some important learnings and best practices to use to improve your hiring process.

1 - Be inclusive.

This sounds like the most obvious advice, but leverage your network of employees, board members and trusted people to find candidates. Don’t only involve the engineering team to hire for engineers. Be inclusive. And don’t limit yourself in using more people to access potential talent, but also to vet, build references, and close candidates. Not only can this be one of the best qualifiers of candidates in terms of culture fit and gaining new perspectives, but this will also signal to your candidates that by working with you, they’ll get access to a network that will help them further down their careers. Remember the hiring process involves a huge part of selling the opportunity of working for your company so use your best sales tool — your extended team.

2 - Avoid tribal hiring.

To pull in the best available talent to your company, you have to keep an open mind with the types of candidates that you’re willing to recruit. If you’ve started off your company in a kitchen with a couple 20-something-year-olds, it’s easy to fall into the trap of looking for more people that are exactly like you. It’s a very common mistake for immature managers and this truly self-limits the amount of talent available to bring into your company. This is what’s known as tribal hiring.

Tribal hiring really limits your company’s ability to scale. Hire for the needs of the role and the opportunity for growth it provides — do not hire someone because they look and talk like you. — Austin Brizendine, Rivera Partners

This shouldn’t be confused with hiring for culture fit, where you look for a foundation of shared values. With tribal hiring you rather look for identical functional skills and background to yourself.

3 - Test.

People can be great communicators and salesy. Especially candidates who are actively interviewing tend to be very polished in their way of articulating their background and skill set. But how do you ensure someone has the skills they say they do? The answer is by testing them.

Tests can be written, role-plays, or simulations of a typical work situation. These tests don’t need to be elaborate, but they do need to be able to differentiate the candidates who have the necessary skills from those who don’t. Depending on the role you may want to give a heads up about the test and allow the candidate time to prepare, while many tests can be done on the spot. Some roles are easier than others to test, but all roles can be tested for whether junior or senior.

Presentations & case studies have become commonplace in almost every search we do. CEO candidates are asked to present their vision to the Board while VP candidates are asked to present a 100 day or 1 year plan to fully flesh out their understanding of what they have learned throughout the interview process and demonstrate how they will address the strategic and tactical needs going forward. This is an especially valuable exercise to gauge how you will work with one another in future, to ensure thoughts & vision are aligned and test for depth of understanding in all key areas required for success in the role. — Mark Jacobson, True.

However, know when in the process you want to introduce a test. At the time of testing the candidate should ideally already be sold on the opportunity to work for you and also have a deeper understanding about the expectations on the role. Hence, tests should not be used during the first stage of the hiring process but rather towards the latter part.

Also remember each candidate should be given the exact same parameters and, ideally, everyone who will be part of picking the candidate is present during the delivery so you can comment consistently on all candidates in organized debriefs.

4 - Use momentum.

Once you find a candidate that fits your position there’s no sense in wasting more time. As the recruiting adage goes, “time kills all deals”. Use momentum to move fast. There are some companies in the Valley who have “hacked” this part of the process very well by using social pressure (getting everyone from the company involved in the recruiting process to personally reach out to the candidate and congratulate them before they have signed the offer) and bells & whistles (bringing in a cake at the end of the last round of the interviews with the candidates name on and “celebrate” that they now are joining). Some of these things may very well be what brings over a candidate who are evaluating different offers, and it obviously communicates a huge commitment from the company making the candidate feel wanted.

Also be somewhat opportunistic for certain roles where you repeatedly are hiring, e.g. sales and engineering. If you find amazing talent but there’s no exact short-term fit, it may still be the right decision to bring them on. Dare to pull the trigger and move beyond the exact role description on amazing people you meet.

Great companies are not going to wait, they are going to execute and hire talented candidates opportunistically. They know that great engineers are not tethered to a tech stack and can freely move about from tech stack to tech stack in less time than it takes a company to hire someone that fits the exact specification. — Thor Bucy, Rivera Partners

And for those candidates who doesn’t fit the company, as soon as it becomes clear in an interview that it’s not going to work out, don’t be afraid to end it there. Acting fast and being transparent is most often a benefit for everyone involved, and you avoid leaving people hanging in uncertainty. Obviously also always treat candidates respectfully, and if treated fairly even declined candidates can become valuable ambassadors of your company.

5 - Pay to play.

Attracting the world’s best talent means you have to be willing to spend money. If you try to be cheap with your people you will fail. The top 10% in a certain field will not accept being paid average compensation. Top talent knows their value, and so should you. Hence, know compensation benchmarks for the roles you’re hiring (your VC should easily be able to help you with this) and accept them. If you consider building a team in the Valley, be ready to pay…it’s expensive even for average talent. But realize wherever you hire, you get what you pay for. Many inexperienced entrepreneurs have a hard time accepting this, especially since they themselves often have taken personal risks and are not optimizing their life around their paycheck. I did for sure with my previous startups… But you’re not hiring yourself. You’re investing in complementary talent to make your company successful. And if you manage to attract the right talent, the ROI for your company is exponentially much more positive. So make sure you always compensate enough for the talent you’re trying to attract and the market you operate in.

And compensation isn’t of course only salary. Whether you use Restricted Stock Units (RSUs) or stock options, make sure you clearly can articulate the equity package’s monetary value and future potential. Equity can be structured in many different ways and most people haven’t had the opportunity to study the mechanics at depth, and as an employer it’s your job to make sure you sell it. Also have some flexibility to dial cash vs equity up and down in order to fit the risk/reward profile of the candidate. People are different, and you have should be agile enough to accommodate the right candidate.

As the saying goes, “if you think hiring professionals is expensive, try hiring amateurs.” 💪 👊

Teamwork FTW 2.