Four Hiring Strategies for Social Ventures to Find and Keep Talent
When you think about the best companies to work for, global brands and corporations like Google, Apple, GE come to mind. So how do smaller, lesser known organizations, attract high quality talent?
At Catalyst Fund, we invest capital in and develop the capacity of early stage inclusive fintech companies. We see that our investees are faced with the same hiring challenges. In fact, according to The Human Capital Crisis: How Social Enterprises Can Find the Talent to Scale, a report by RippleWorks Foundation, finding employees with the right skills remains the most difficult challenge, especially in emerging markets.
The report outlines the challenges entrepreneurs face as they scale their social ventures with regard to hiring and building their teams. It also provides recommendations on how entrepreneurs can find the talent to scale with perspectives from 628 social entrepreneurs and 47 impact investors in 59 countries. Key findings indicate that a talent gap exists because of the following reasons:
- The Cost. The price of acquiring top talent is high. Majority of startups cannot compete with the pay and perks that bigger firms offer potential employees.
- Shortage of Local Talent. Finding the right local talent is a challenge in emerging markets. Most qualified candidates are hired quickly, leaving a limited supply of suitable candidates.
- Job Security. Potential employees are risk averse and prefer working for established ventures rather than early stage startups.
Following the report, RippleWorks hosted a webinar on How Successful Startups Hire & Develop Talent. We enjoyed attending the 1-hour the webinar. For our busy entrepreneurs in need of a quick download, below are the three actions that startup leaders can take:
Don’t compete on the basis of salary
Social enterprises should start thinking strategically about hiring beyond compensation. DougGalen, RippleWorks CEO suggests that entrepreneurs should start building a talent pipeline before they need to hire staff. Social enterprises should also develop programs on career training and personal development for employees to keep them motivated to stay. Outlining the company’s employee value proposition (EVP) to potential employees is one way of attracting talent. The EVP defines the value that employees are expected to contribute with the value that they can expect in return. The EVP conveys the company culture and professional development opportunities available. It also motivates and engages employees to drive business success.
Treat hiring as a strategic priority
CEOs are the spokespersons for their brand and their vision. They are thoughtful about the kind of company culture they want to build at their companies — starting with the people they hire. CEOs who prioritize recruiting are able to hire the right talent for scaling. Fred Swaniker, founder of African Leadership Academy and African Leadership University, devotes half of his time to recruiting. He notes: “A huge part of the recruiting for an organization like mine is the vision of what we are building. Whoever joins my team needs to be sold on that vision. Who better to hear that from than me?”
Leverage mentors and advisors
Entrepreneurs need mentors who have expertise in the skills they lack. Mentors and advisors are one of the most valuable resources an entrepreneur has in the development of their business. As an entrepreneur, it can be difficult to determine when and how to use each one. According to the RippleWorks report, “entrepreneurs who best leverage mentors and advisors do so by engaging them in the specific challenges that their businesses face, through frequent engagement and a trust-based working relationship.” Mentors can help entrepreneurs build the teams they need. While entrepreneurs are searching for talent, they can utilize the skill sets of their mentors and advisors to fill in the gaps.
Train staff into leaders
Startups should be intentional about developing internal talent and invest in training teammates and developing their capabilities for future needs. This saves startups the time and effort spent looking for additional talent in the future. The pathway to leadership and professional growth also could help employees feel more vested in their job.
At a small early stage company, a good or a bad hire can make a big difference. Getting the right people on your team is the absolute key for navigating uncertain startup waters but also for charting the company on the path to growth. While the webinar strategies are a good starting point for finding and retaining good people, startup leadership continuously have to balance the ebb and flow of growth in building a solid product and building a robust organization.
What steps or approaches have you taken as startup leadership to effectively recruit, develop and keep talent? Share your take on hiring by leaving a comment below.
If you enjoyed this resource, visit the Catalyst Fund Resources page for other talent acquisition related materials such as the Accion Hiring Guide and their canned Job Descriptions for common positions.
Catalyst Fund accelerates promising inclusive fintech startups and spurs innovation in financial inclusion in emerging markets with the support of the Gates Foundation, JPMorgan Chase & Co and the collaboration of Accion Venture Lab, Omidyar Network, Gray Ghost Ventures, Quona Capital and Rockefeller Philanthropy Associates.
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