For startups, hockey-stick growth is a classic “good problem to have.” In fact, leaders often think it’s so good that they chase it at all costs. They focus too much on the “good” part and not enough on the “problem” part. But seasoned growth investors like Steve Streit know that all else being equal, you’d rather have growth in your company than a quick increase that just as quickly subsides.
Streit and his peers have seen far too many high-flying companies come crashing back down to earth after a mismanaged period of rapid expansion.
Adding talent is one of the greatest challenges facing fast-growing companies. It’s easy enough to convince capable individuals to work for you when the pie is expanding, but attracting and onboarding the right people into the right roles is more difficult than it first appears.
“When your startup is in growth mode, that is the time to devote extra attention and care to your talent pipeline and hiring practices,” Streit says. “It’s easier to avoid a bad hire than to try to undo it later.”
Here’s how Streit advises early-stage companies to approach “hiring for growth.”
1. Map Out Which Roles You Need Filled Now and Later
This is no easy feat when your company feels like it’s growing a mile a minute. Under the circumstances, plans you make today could seem wholly inadequate by next quarter, if not next month.
Yet it’s better to have some sort of plan, however incomplete, than none at all. To that end, map out your human resource needs for the next 12 to 24 months, or however far out in the future you feel comfortable projecting. Ideally, this will take the form of a “future org chart” that shows which positions you’ll create and fill, at what times, and where they’ll sit within the organization.
2. Filter for Candidates with “Growth Experience”
If growth is your goal, why not hire people who’ve been there before? Yes, you’ll probably miss some first-rate candidates by filtering out candidates who’ve never worked in a fast-paced startup environment before, but you’ll save yourself a lot of time and grief during what’s going to be a time-consuming and grief-laden hiring process anyway.
3. Take Your Time During the Hiring Process But Don’t Ask Too Much of Candidates
It’s no secret that hiring a new employee takes time. On average, finding the right person takes as little as 13 days (give or take) in the construction industry or as many as 50 days in the healthcare industry, according to Workable. High-growth sectors tend to be on the longer side, especially when filling senior roles.
While it’s important to take your time and avoid making a hasty hire you soon come to regret, it’s also important not to draw out the process any longer than necessary. Unless you’re filling a very specific role with very particular requirements, putting candidates through a five-interview, three-assignment ordeal is almost certainly overkill. In fact, the best candidates might not be willing to put up with it at all.
4. Know What’s in and out of Bounds
Hiring for “fit” and cultural alignment is very important, especially when your company is changing before your eyes.
As a leader, you have the agency to “decide how you want to be perceived, and what kind of felt experience you want for your customers and your employees,” says Kirstin Fulton, content manager at eMyth.
However, you also have to be careful to observe state and federal employment law. Many startup leaders extend the “move fast and break things” philosophy to hiring, not realizing that it’s unethical or downright illegal to discriminate in hiring on the basis of age, sex, family status, and other protected classes that employers (incorrectly) believe adversely impact employees’ performance.
5. Don’t Skimp on Cash Compensation When Hiring for Growth
It’s more and more difficult to find employees willing to forgo market-rate cash compensation in favor of restricted stock units that may or may not have any real-world value. And you definitely shouldn’t expect experienced, top-flight employees to take this bargain. Structure your pay packages accordingly.
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6. Democratize Recruiting and Hiring
Finally, leverage existing employees who’ve bought into your growth mindset to find future employees eager to do the same by incentivizing candidate referrals.
“So many businesses post jobs and their internal employees have no idea that they are hiring but would have had a potential candidate if they knew,” says HR expert Jeff White.
This is a win-win for you and your team: You get the talent you need, faster, and they get people they’re excited to work with.
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The Most Important Asset of All
For all the talk of a future in which AI agents do most of our work for us, the startup economy still very much relies on human capital. Your people are now your company’s most important asset, and will continue to be so for the foreseeable future.
An inconvenient reality? Perhaps, but recognizing it is the first step on your journey toward a more effective approach to hiring for growth. From there, it’s all about execution, which is something you probably know a thing or two about as an entrepreneur.