Ten lessons I’ve learned from 50 portfolio CEOs about the process of finding strong candidates and moving them through a recruitment pipeline
“It’s killing me,” said Pablo. “I’m under huge pressure to hire. I’ve got to bring in nine new people in the next six months, and my board keeps asking why headcount is way under forecast. Yet even though I feel hiring is taking up half my time, I’m not getting great candidates. I don’t dare admit it to my VC investor, but I hired a couple of the people out of desperation — and now I’m thinking I need to fire one of them. He was simply the wrong choice.”
Pablo, one of the CEOs I coach, felt ashamed that he was doing a bad job on hiring — and he’s not alone. A surprisingly high percentage of company founders raise mone and then run into trouble when they need to bring in more people quickly without sacrificing quality.
Yet there are things you can do to get better at hiring. At the 50-odd companies in our portfolio and the 19 boards I’ve sat on, I’ve observed ten things that companies who do this well have in common. Here’s the list.
1. Get the job specification right
This means having a super-clear understanding of activities, qualities and objectives: what the person you want to hire will be doing, what skills and characteristics they need to have, and what you’ll expect them to achieve in their first 90 days.
Make sure you’re clear on activities, qualities, and objectives
If the new hire will report to someone other than you, make their manager take the lead. But whoever does it needs to decide these things, and write them down. Note that in many cases, it makes sense to start by deciding what needs to be done rather than who needs to be hired. When you run short of capacity in one part of your business, that can often be an opportunity to automate the boring bits, not hire more bodies.
2. Get candidates from the right channels
Most companies find that their best hires come via recommendation. To fully benefit from the networks of your team members, you need to do more than just offer them a cash bonus if someone they know gets hired. The most successful approach I’ve seen comes from the hiring chapter in Mark Roberge’s great book on sales at Amazon US and UK). Roberge suggests you forewarn people a few days before your next meeting with them that you’re going to ask them to suggest a couple of candidates, and ask them to come prepared.
Outbound matters too, since the best new people are likely to be doing well in their existing job and not looking for a new one. So identify sectors, companies and job titles where the dream candidate might come from. Then reach out to them via LinkedIn, professional networks or email. Job ads tend to produce lower-quality candidates, and in some circumstances contingent recruiters produce the lowest of all.
3. Describe the job attractively
Whether you’re advertising or not, you need to be able to pitch the company and the job to candidates. Look at the dry description of responsibilities and requirements. Then repackage it, starting first with the reasons why your company is exciting and it would be a great move to work for you. Be thoughtful and then minimalist about required skills or experiences (is five years’ prior experience as a content marketer nice to have, or truly necessary?). Every extra item on the list reduces your available pool.
4. Write down your hiring process
Structure the hiring process like a sales funnel, showing the different stages you want to take candidates through, the criteria you’ll use to decide whether they progress to the next stage, and the percentage you guess will convert. This will help you avoid unnecessary effort by designing a process to filter out early on the people you can’t hire.
Don’t ask for general cover letters
So rather than ask for general cover letters, it makes sense to get people to complete a structured form with specific questions covering the skills you’re searching for. And before you bring in candidates for hour-long interviews with multiple team members, define some criteria for a long-list. Use 15-minute screening videocalls or phone calls to identify a smaller number to invite to interviews in the office.
5. Automate where you can
Many parts of the hiring process, including scheduling screening calls, testing skills and personality, can be speeded up 10x or 100x with automation. Some applicant tracking systems (ATSs) already include some of these features. You can hack others by hooking up tools like Zapier or IfThisThenThat to Trello, spreadsheets and email.
It may not seem a priority to you to acknowledge job applications, keep people up to date with where you are in your decisions, and send polite and friendly refusals.
It certainly matters to candidates
But it’s definitely important to candidates, and if you handle this well then you create lots of goodwill for your company. One way to think about it: if you get 100 applicants for a job, then the way you treat the 99 people you don’t hire will affect your reputation far more than the way you treat the one person you do hire.
6. Use standard questions
Put together a list of questions that will help you test for the skills and capacities you’re looking for, and ask every candidate exactly those questions. This makes better use of interview time, helps you compare like with like, and also improves consistency between multiple interviewers if you’re sharing the burden.
Include a mix of three different types of questions when you interview candidates
Try to include challenge questions (where you’re pushing candidates to be fully honest about their past work experiences), insight questions (where you want to know what they learned and how they analyse) and scenarios (where they’re revealing how they did or would react to specific work problems). Keep structured notes on their answers.
7. Use quantified scores
Research on hiring processes shows that many people make up their minds about candidates in the first few minutes — and they’re mostly wrong. You get better results by deciding a set of criteria beforehand, and then scoring each candidate against each time.
This may well end up with a result that doesn’t accord with your gut. That’s fine; it helps you compare the high-scoring candidate skill by skill against the one you instinctively want, and helps you clarify whether you’ve changed your mind about which characteristics matter most or how each person rates.
8. Get multiple people to decide
If your company is big enough, you get a huge dividend from having multiple people take part in this process and the final decision. Note that Google’s research, as reported by its ‘people operations’ chief Laszlo Bock (see Amazon US and UK), suggests you don’t get much benefit from any interviewers beyond four, which is a useful tip to help you limit the burden you place on your team.
9. Be realistic about the time and resource involved
Even with good processes, many startup founders underestimate both the number of candidates they’ll need to make a great hire, and the time it will take.
One hire = 35 hours’ work, absolute minimum
A good rule of thumb for each position filled is that the interviewing time alone will be 25 hours: five hours for screening interviews (say 20 candidates times 15 minutes) — plus ten hours for shortlist interviews (say five candidates times 30 minutes times four interviewers), plus ten hours (two hours times five candidates) for one interviewer to take a detailed and in-depth biography of the shortlisted candidates). And that’s not including drafting the job spec, scheduling interviews or communicating with candidates.
If that seems a lot, recall that a retained search firm recruiting for a C-level job would charge a fee of $80K or more, and expect to devote 250 person-hours’ effort to that single hire.
10. Use an internal recruiter where appropriate
It helps to have one person who is accountable for making sure you have the right number of candidates moving through the funnel at the right speed, and that the process is being well run. That’s why for many companies it makes sense to hire an internal recruiter (who could be a contractor or a temporary hire) to do these tasks. If you are hiring six or more people in the coming six months, then the cost of this will more than pay for itself in faster recruiting and better-quality people.
The ten items on this list may sound like a daunting, and expensive too. But if you make any reasonable guesses about the cost to your company, and the stress to you personally, of hiring the wrong people — wasted training time, wasted salaries, missed business opportunities — then a well-planned hiring process suddenly looks like a bargain.
I’m Tim, and I run a seed fund out of London that invests in SAAS, platforms, marketplaces and tools. I’ve backed 50 companies and sat on 19 boards, and I also coach Series A and B CEOs introduced by VC firms in Europe, America and Asia. Before that, I founded a startup and took it to an IPO on the NASDAQ, and before that worked for The Economist and the Financial Times.
About this publication
Lessons From Startup CEOs is a series of blog posts covering nine of the most important skills I’ve seen in founders who are most successful in scaling their companies. If you’d like to read about more of them, please follow.
Image credit: Clem Onojeghuo