Talent challenges for startups
November 27, 2023

4 Talent Challenges When Scaling a Startup

LevelUp Ventures
LevelUp Ventures

Scaling a company is more of a marathon than a race, on a road that’s bumpy, full of potholes, tight swerves and many unexpected challenges. However, the further you go, the more you get the validation that your startup is on the path to success. 

Working with multiple fast-growing tech startups and scale-ups, we have seen how they adapt and the challenges that can break their journey for growth.

We notice a recurring challenge in growing startups: finding the right talent is more often the barrier to growth than raising financial capital.

Why does finding the right talent tends to be put on the back burner?

It’s because raising funds, acquiring customers and developing a business, is already adding up to the workload of two full-time jobs. Thus, finding the right talent keeps being pushed down on every founder’s to-do list. Then funding comes in, yet there is not enough talent to drive your business and the growth stagnates.

Here are four talent challenges that can occur while scaling your startup and how you can steer away from them.

Talent Challenge #1: Decide on the hiring tactics

Talent Challenges: hiring tactics

Whether it’s about your recruitment process taking too long or not being in-depth enough or about not finding the right candidates for your profile, it all resumes to your hiring tactics. Based on the resources available and the requirements of the role, you can evaluate who should take the lead in hiring the right talent.

In short, you have three options:

Option 1: Do-it-yourself

Usually done by someone taking the role of a recruiter among other tasks within the company, this strategy can yield as many results as it can cause more costs. Choosing to run the recruitment process by yourself can save you money in the short run, but looking at it from a long term perspective it can cost you more time and even more money if it distracts you too much from other key topics.

A mishire can cost you from 5 to 27 times the amount of the person’s actual salary, amongst other side-effects like low morale and motivation of the team and company culture.

Option 2: Embedded Recruiters

Acting as an add-on to your team, temporary in-house recruiters are usually hired project-based, to add spice and power when recruitment needs are high. They usually spend a certain amount of time as part of your company, getting to know the business, the team and the culture. Because of this, they are able to better assess if a hire will be a fit for the company.

Option 3: Agency Recruiters

Agency recruiters are usually suitable for more specialized roles, that require access to a wide network of candidates. They usually work with a no-cure-no-pay fee, reducing the risk of sunk cost, as you are only paying when the hire has been made. However, when hiring, the focus of agency recruiters tends to be on result rather than the quality and/or culture fit of the candidate, the hire might be a mismatch to your startup’s needs.

Talent Challenge #2: Onboarding new employees

Talent Challenges

While your company is scaling, so do your processes, tooling and team, and all these aspects need to be introduced to your new hires. And it’s not only about a block of meetings and some training sessions. The way you choose to do your onboarding can affect the retention of your new hires. In fact, 69% of employees who have a positive onboarding experience are more likely to remain with the employer for three years. The onboarding of new employees should be about immersing them into the culture, getting to know the team and actively participating in the activities of the company.

Using tech to create a smooth onboarding
For example, at LevelUp, we have an in-depth onboarding process in Asana, which includes tasks on: acquiring recruitment and startup knowledge, exercises with our tooling and techniques, shadowing recruiters and coffee chats with everyone on all levels of the organization. At the end of their onboarding, our new recruiters are up to speed on our methods and practices, ready to make their first hires.

Sure, having such an extended onboarding process might take longer, but having a full 360-view of the organization, colleagues and culture will make the difference in the integration of the new hire in your company and their overall experience as an employee.

Talent Challenge #3: Fostering talent – retaining the people you hire

Talent Challenges

You convinced the right candidates that your company is the right fit for them, hired them, walked them through your processes, now what? The challenge of scaling up doesn’t end there, because as fast people come through your door, as fast they can leave. In fact, employees stay twice as long at companies that provide opportunities to grow.

So, how can you provide an interesting and challenging environment that the talent would need to stay?

Fostering talent should be about providing opportunities for growth whether that’s about professional or financial growth, as it could be different for every person. People need to feel that they’re growing, they are succeeding, they are improving and making progress.

Make it your mission to support them, rather than imposing it, because after all, the choice belongs to the employee. It’s important that you ask what it is that they want to develop. You probably won’t get the answer straight away, because they don’t know it either. But, with time, they realise what exactly they want to learn. From there, keep it simple by formulating two or three development goals in a year and decide together what new responsibilities they should take and what resources they need to make those goals happen.

For example, at LevelUp we use OfficeVibe as our people management tool, which allows managers to gather data from their 1:1s, create individual development goals and assess their progress. Similar features can be found in other tools like Lattice and Leapsome.

Talent Challenge #4: Scaling remote teams

Talent Challenges With new remote work becoming the norm, talent pools have no geographical boundaries anymore. Startups are no longer restricted to hire from only a specific area and they are able to cast a wider, better net when it comes to attracting candidates. While scaling remote teams has its perks, from a financial perspective to increased productivity, it also has its downfalls. Time zones can become a barrier to communication and team members might feel disconnected, affecting the collaboration and the culture of the company.

Asynchronous communication: keep processes and practices documented

People have been communicating async for a while, without even knowing. Leaving a message, leaving voicemails, recording videos… these are all forms of asynchronous communication. Basically, it’s when the recipient and the sender are not in the same space at the same time. For companies, this type of communication might be more difficult, as it requires more time, better planning and specific tools. However, having established practices, like a library of processes and policies, explainer videos, weekly announcements, can improve communication. For example, at LevelUp, Notion has become our very own Wikipedia containing all the information we need about our company’s story, our team members, HR processes, yearly planning, and much more. Here’s a sneak peek into how you can use Notion to add value to your team.

No matter what tools or platforms you use, the key is to improve these practices as you go and keep essential information documented.

Collaboration: ensure smooth collaboration by having regional leaders or paired partners

Working remotely might affect the spirit of the team, with employees feeling disconnected from each other. Having regional leaders that are experienced in communicating with remote teams, managing team performance and having regular check-ins can give more structure, determining employees to feel like they’re part of a team. Another way you can ensure a smooth collaboration between remote teams is to have paired partners. This method can be used also by hybrid teams, as each person working in-office can be paired with a remote employee to collaborate with.

Culture: align company culture for both remote and in-person employees

The company culture is closely tied to your employees’ communication and collaboration, and fostering this culture without having a team in-person might have its hurdles. Make sure your company culture, your mission, vision and values are all in line with your team, both remote and in-person. Create opportunities for employees to communicate and get to know each other by fostering spontaneous “coffee machine” chats. You can even take a step further and organise yearly workations for team building.

Ready for scaling up

Scaling a company is a test for any founder and it comes with its challenges. There is no exact recipe for scaling, but having a good team driving this growth together with you is what will make the difference.

Recruiting for fast-growing startups and scale-ups as part of their team, we have learned that focusing on human capital is as important as raising financial capital. At the end of the day, you can have all the funding you need, if a team member is out the door the moment a better offer comes in. Investing in your hiring strategy, having a well-established onboarding process and supporting your team’s development can make or break your company’s growth.

Do you want to expand your team but you are undecided on what course to take? You can book a consultation call with us,

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