Binge-Purge Hiring: The Habit Startups Need to Break
TL;DR: Stop hiring so many people. Ask “why” often, even late in the process. Make sure your growth goals are realistic at every level, including and especially with your investors and board members.
Here are some typical nuggets of wisdom you may hear on on startup hiring: hire slow fire fast (this is mostly bad advice; future article to come); hire for culture fit; never compromise…
Yay for nuggets, I guess. But you may have also noticed this pattern*:
- Raise money
- Hire a truckload of people
- Fire a slightly smaller truckload of people
There are many good reasons to hire lots of people relatively quickly. There are also, of course, many good reasons to let people go. But rebounding from over-aggressive hiring plans is not one of those reasons.
Your people serve a very clear purpose: to make shit happen. If the number on your hiring plan loses touch with that purpose, time to re-think. Your recruiter(s) should never lose that perspective either. The minute they do, their only metric becomes turning a 0 into a 1. The most dangerous outcome of this approach is that those aggressive hiring goals can become a foregone conclusion: an assumption beyond reproach even in the face of evidence.
This all feeds into a clear behavioral pattern, and I’m going to call it:
We binge on hiring, giving far too little thought to a hire’s overall fit, their long term potential for success, what happens in 12 months if the business shifts, etc. Then, as if it were completely beyond our control or ability to foresee, we purge — people leave in large quantities in a very short period of time.
We accept this as the cost of business. But this is not inevitable. There are two major contributors, both avoidable.
Problem 1: unrealistic growth targets.
If your investors are pushing you for extremely aggressive top line growth, that’s an easy way to fall into the binge-purge hiring trap. As a founder or executive, it’s up to you to decide if that sort of aggressive growth plan makes sense for your business. But just as VC is beginning to shift more toward looking at sustainable business-building (healthy margins, paths to profitability, etc), so too should your hiring. (“Hire profitably” is a confusing metaphor, but I’m gonna stick with it…)
If you’re setting aggressive headcount goals, stop for a beat and think about each and every one of those people. Literally sit down and look at your org chart and hiring plan. I’ve seen this happen quite a bit, and have always been (usually pleasantly) surprised when — at the 11th hour — a CEO will reevaluate the need for a given hire. Don’t fall into the trap of thinking all momentum is good momentum.
Be realistic from the earliest stage possible about what growth makes sense — and not just what rate of growth, but what kind of growth. Hiring too many people for the wrong reasons is like fudging the numbers on your balance sheet to appear more financially healthy than you are. That’s not going to end well.
Making progress on hiring and don’t want to slow down? I get it (seriously, I do). But it’s never too late to pump the brakes. Remember: there is no such thing as being “pot committed” when it comes to hiring somebody.
Problem 2: poor communication.
Recruiters need to understand the “why” behind the plan.
“Because we need six engineers” is not a “why.” But “You were in the product roadmap meeting, so you saw what we’re aiming for next quarter — and based on our projections for the next 6–12 months we’re in a really good place financially. We should add to the XYZ team because we’re simply spread way too thin,” is a pretty good “why.”
But in my opinion, telling isn’t the solution. Have a conversation with your recruiting team and allow them to be part of the decision making process itself. What good are they if they have only a superficial understanding of the business, your company’s structure, and their reason for hiring? If actors can throw a tantrum over not understanding their motivation, recruiters should understand why they’re hiring somebody.
Yes, transparency is very important. But transparency is passive. Windows are transparent: if you happen to look through one, nice! If somebody encourages you to open the blinds yourself, even better. You should do the latter, andharness that transparency actively by proactively soliciting thoughts. And not just so that your recruiters feel superficially included; do it early and honestly enough so that they have the potential to genuinely contribute.
Volunteer to be wrong, listen, and respect.
Takeaway 1: NOT hiring is more important than hiring.
The negative impact of hiring the wrong person is greater than the negative impact of not hiring the right person.
Hiring should optimize for positive impact. Don’t risk sinking the ship by bringing on the wrong person just because you’re excited about scaling headcount.
This takes buy-in at every level. It takes patience and a thick skin at the individual contributor level, and it takes extreme discipline and composure at the executive level. It requires alignment with your board and investors, and an understanding that growth and realism are not mutually exclusive. I’d never advocate intentionally under-promising, but over-promising — and then hitting those numbers at any cost — is a slippery slope, including and especially when it comes to building a team.
This is the worst expression of “move fast and break things.” You’re moving fastwith things that need time to settle (human beings), and you’re breaking your culture, your teams, and potentially very important parts of peoples’ lives.
Takeaway 2: Headcount is always a means, never an end.
Human beings are not a top line metric.
If you’ve added a hire to your roadmap, ask yourself this question: “What would happen if we didn’t hire this person?” Ask your recruiter(s). Ask your team leads. Listen!
The instant you cannot connect your hiring plan to important, clear, and focused company goals: rethink your hiring plan. Involve your recruiters.
If there’s one thought I’d leave you with on this topic, it’s that companies have bubbles too. Stuffing them with human beings shouldn’t be the reason they pop.
* This is a crazy oversimplification of a complex process run by smart people, but the pattern is undeniably there.
**I googled this. Somebody beat me to the punch. I’m taking a bit of a risk with this terminology. The last thing I want to do is offend anybody, but I couldn’t think of a more apt description of the problem with startup hiring. So hopefully this doesn’t dilute the message!