Ask any startup founders to rank their greatest challenges, and naturally human resources makes it to the top of that list. One of the biggest challenges in starting a company involves hiring amazing people. For new ventures, a little preparation can mean the difference between creating a culture of success, or becoming completely bogged down by people problems at a time when you can least afford to make mistakes. So, how does can entrepreneurs be prepared to recruit the right talent and retain it? In a candid chat with two startup recruiting experts – Chandrika Pasricha, founder and CEO of Flexing It and Jeyadev Parthasarathy, CEO, Career Access, a division of Executive Access (India) – we figure out human resource challenges faced by technology-based startups and how to deal with them.
According to Jeyadev, when hiring someone in the technology field, it’s important to look for passion above anything else. He says, “It may sound cliché but people who are passionate can be trained in everything even if they don’t have the so-called “experience.” They are the most driven workers and they will go beyond the typical job requirements whilst wouldn’t mind donning many hats. However, timing is a key. Spend enough time with the individual before recruiting them. Meet them ten times if required, see if they will fit in the culture of the workplace.”
Chandrika talks about a few things that she feels have worked for her and the startups who have leveraged their platform. She says, “Look for people who fundamentally have a strong belief in the idea and want to build and take it to the next level. Listen to your gut – while you need complementary skills (not clones of you!) you also need to find people who you can relate to, and who can relate to you as you will be working closely together in an intense environment.” She explains that sometimes taking a second opinion also helps. “Always get someone you trust and respect to meet key hires. They may be able to spot things you are blind to as one’s vantage point colours our views always. Once in set clear expectations in the beginning to make sure it is a win-win for everyone.”
For Chandrika, leveraging the network is the key to finding talent. She says a strong reference is a good way to identify core/ senior talent that would be working closely with the firm. While Jeyadev agrees to the networking part, he says the reference check must be done in informal. “Informal reference checks could be done by being friends with them on Facebook, following them on twitter, connecting over LinkedIn and keeping a check on their regular activities. Social networking behavior talks a lot about an individual.”
Jeyadev says that the senior management team of any startup whether in sales or non-sales job needs to be the best salespeople to attract talent. He says that the two biggest challenges that he has seen startups facing when competing for talent is their lack of brand recognition and candidate concerns about the stability of the company. “Startups that are successful in recruiting do a great job of telling their story, explaining their vision and how the candidate will be an important part of reaching that goal. They also need to do a great job in keeping transparencies about their financial situation in regards to funding, profitability and expected growth but don’t reveal more than necessary.”
An individual who can don many hats and can adapt to the fast moving startup environment can be a good find, explains Chandrika. She says, “Your hire needs to be versatile to juggle many things together along with a strong sense of ownership towards the idea for delivering against milestones. He/she also needs to be curious to be able to stay abreast of what’s happening in the environment to derive implications and opportunities for the company.”
Best resources to find talent
“This really varies by the seniority or talent you are looking for, skills and also whether you are hiring for permanent roles or need consultants/project-based resources,” says Chandrika. She continues, “If you are looking for interns – there are many online intern-hiring websites which can be helpful as can engaging with specific campuses for their internship and live project programs that are part of the curriculum. For entry level and early tenure hires, posting on job portals and word of mouth are probably the best bets for a young startup. For hiring your core team and senior folks – it is very critical to find people who have the relevant experience / skills and more importantly, understand the concept of your startup well and are excited about it as well. Online job sites are a good way to shortlist candidates but given the number of applications you receive, it becomes difficult to shortlist.”
For Jeyadev, it’s a different perspective altogether. He believes that one of the best ways to pick talent is to be well-networked and get referred people. “Referred people solve 90 percent of your problem. Look at your competitor startups who are in the same industry, find out about the second level employees – if they are good at what they do – offer them a first level job in yours. Another way to go about this is go to the higher players, research about the five-six year year experienced people, connect with them over linkedin and attract them with an idea to join you as a CTO for your startup. It is a big leap of faith but you never know how many might take it.”
In a technology-based startup, Jeyadev believes that CTO is a critical position. He says, “Very often when you are hiring a CTO you should also look at if they will attract the next level of talent. In fact, everybody in the organization needs to be good at attracting the next level talent.”
A recent Linkedin survey indicated that over two-thirds of fresh graduates expect to have changed jobs in the next couple of years. And this number would probably be worse if we look at startup hubs like Bangalore, NCR where there is literally a war for talent. So attrition and planning for it is a reality that all start-ups have to deal with
According to Jeyadev, the problem of retaining a talent is a problem, period. He says, “The problem is to convince the first few people, who may also include you co-founder, to work for you on equity at first. Most investors want to fund a team but the team will often only join if there is salary involved. So, again transparency is the key. Share more and more information with your team. If you have a problem, ask for a solution and get them involved in key decision making. In short keep them busy enough to not look at the other greener side.”
Chandrika feels that ownership could be one of the important aspects of watering their side regularly to make it look greener than the other side. She says, “A key way to keeping the team driven is to give them independent ownership of important deliverables while also ensuring collective accountability for overall company milestones. Make sure that every few months you have discussions with your employees on how they are feeling, what additional skills they want to learn to make sure they continue to grow. Celebrating success no matter how small or big it may be.”
Remuneration: Importance of ESOP
ESOPs are clearly a very important tool to motivate your critical employees and to provide a sense of shared ownership explains Chandrika. She continues, “It is also a clear signal to an employee that his/her contribution is valued and they will share in the company’s upside over and above salary. However, companies do also need to think through all who would value the ESOPs as our experience has been that some employees may not fully appreciate the value of equity especially if the startup is still in the early stages of growth. So you may decide in some cases to give a higher performance bonus upon achievement of milestones if that is valued more by a critical employee vs a higher participation in the ESOP pool. ”
Major challenge – availability of high quality resources, selecting the right resource or retaining good quality talent?
Jeyadev explains that people make an organization successful and that’s why selecting the right resources is the challenge. “It is the first lot of people that are critical. They are the ones who you expect would stay for five-six years at least and who would be the building blocks of the growth of the company. Startups have excitement, they have challenge, and they self-select for people who want those things. Timing is hard – for example – if you haven’t developed the right product or market fit, even if you have the best marketing team in the world, they won’t be able to sell it. Same goes for any other position. You need to hire just before you need the person, not before, not after,” he adds.
However, for Chandrika, the major challenge for companies is finding the right resources. “While there are a lot of good people looking for challenging roles or projects, identifying them and then seeing if they match what your startup needs in terms of skills and aptitude is a major challenge. Most platforms and social media do not curate or facilitate matching leading to 100+ CVs per role/project most of which may not be relevant,” she adds.
A well known HR thought leader from Silicon Valley, Dr John Sullivan, while talking about startup hiring challenges in one of his article said, “A startup cannot grow organically without recruiting. And if it grows with mediocre recruits, it has already damaged its future. If you hire great people, they don’t need a lot of training, coaching, or development, and if you hire innovators, the value of that innovation is priceless compared to the cost and time involved in recruiting. If you expect to win the recruiting war, every employee of the startup from the CEO on down needs to adopt the role of a 24/7 continuous talent scout. And finally, if you follow up and provide them with the most effective recruiting tools, you may be well on your way to becoming the next Facebook or Google.”
About Chandrika Pasricha
Chandrika has been a management consultant with over 17 years of experience. She is a recently-turned-entrepreneur with Flexing It (www.flexingit.com) which is a curated marketplace for short-term and flexible skills in India. Flexing It connects organisations to skilled professionals and expertise on a project, consulting and advisory basis.
About Jeyadev Parthasarathy
Jeyadev has been in the headhunting and executive search services space for close to 20 years. He has worked with talent sourcing for organisations, across all levels from junior to senior management. He has also worked with entrepreneurs as a partner to grow their business ideas and operating businesses.