As raising funding is consistently challenging, and VCs have been warning startups since 2022, many founders’ first instinct is to start cutting costs. And that’s understandable. In these times, you cannot afford to make mishires. Or even mediocre hires. But how do you make sure it’s the right hire for your company?
You probably have a hiring plan in place for the next 12 months, tightly knit with your business goals, backed by a deep understanding of your employee churn rate. No? Then you’re likely still in the startup phase, where forecasting beyond the next 3 months is a challenge. And in that case, your main question is: “In what hires will I invest my money?”
So, here’s how you can prioritize roles as a first step to avoid a mishire.
Just to put it into perspective: A bad hire in tech can cost as much as $485,371.38. This is a cost few companies can afford.
Have a look at your business targets & needs to decide what roles to prioritize
When it comes to deciding whom to hire, it all boils down to your mid-term targets. Identify the core needs essential for achieving these targets.
Let’s take the following situation as an example: your company has a 12-month runway to Series A funding. To secure this, you need to grow your turnover by 50% and implement key improvements in your tech product. Let’s also assume there are no commercial positions covered and you had a few setbacks in your product development. While initially you may have planned two new hires, your budget only allows for one more.
Now, you’ll find yourself in a tight spot: will you hire a growth marketer to attract more customers or a developer to solve the key features of your product?
The answer lies within your responses to the following questions:
❑ What are my targets to get the funding round? What core business requirements do I need to meet to achieve these targets?
❑ What critical competencies and skills does the company need to achieve these goals?
❑ What position will give me critical skills that I don’t have right now? Do I need to make tough choices in the short term? What will be the impact on my runway?
Outlining these targets and needs should guide you towards the roles, competencies, skills, and seniority level your company should focus on when hiring.
Once you have your answers, take into consideration the seniority of the role based on the goals or projects you have. Usually, senior, specialist roles are aimed at complex, more strategic projects, while medior and junior roles with high potential are for urgent and operational projects with more space for trial and error.
Last step: don’t go alone. Benchmark your findings with a trusted business partner. And remember, fitting your values should always be a critical requirement!
These considerations remain relevant even if you’re hiring for multiple positions.
Make sure you are set up for success
When you have decided on your hiring criteria, you can compound it into a job profile. Now, make sure to keep your eye on the ball. Be very stringent on yourself regarding the ‘nice-to-haves’. No matter how nice they are, keep them in a different storage box.
Instead, ask yourself:
❑ From the skills and competencies mentioned above, which ones are hard to find?
❑ How scarce is this position on the market? Can you find the right people to fill in the role?
For the latter, you might need to perform a talent mapping to get a clear answer. Talent mapping consists of identifying and profiling potential candidates and understanding the internal and external competitive landscape.
So, you now have a water-tight job profile that should scope your decision-making.
Select the critical parts of the role. Manage the team.
Now, picture this: you’re sitting there, staring at an inbox filled to the rim with candidates. Each candidate is a unique puzzle piece, and you’re tasked to find the right piece. You respectfully decline the overqualified, the underqualified and the “I-have-no-idea-what-to-do-with-these”. So, you’re left with a few dozen other potential relevant candidates. You pick the 10 best, on paper, and start connecting with them.
Now, there are 2 rules that allow you to be efficient, but also make sure you hire the right one:
❑ Whatever your hiring process is, it should fit into a 30-day timeframe, starting with the first contact.
❑ Continuously challenge yourself on the critical parts of the role.
❑ If you encounter a situation that changes the critical parts of the role, you have to start over
And now you see how important it is to select the critical parts of the role. That one mistake in the beginning will cost you loads of time later in the process. On the other side, holding on to too many nice-to-haves will cost you at least the same amount of time. Being overcritical results in time-to-hire numbers that exceed the decision to start again. And it has a paralyzing effect on the organization in the long term.
The last thing you have to do: make a clear plan on HOW to test these critical criteria. Involve the right people that can estimate this, and make good use of reference checks. But once someone is thru the testing: count your blessings on the nice-to-haves.
Realize that managing the challenges in your team is the deal you made as a manager. As long as someone fights for your values and has the skills you need to get the business to the next stage: you found the right hire!