Getting to the point of needing to hire employees is a major milestone for a startup. When a new business grows to the point where staff members beyond the founders and/or initial core team are needed, that’s a sure sign of success. It’s an achievement to reach this milestone, but gearing up to hire people to join your startup poses a new set of challenges.
Who Should Be Your First Hires for a Startup?
Once you realize that it’s time to grow your team, the next step is to focus on how to move forward with hiring employees in a way that meets the needs of your business.
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Clarify Mission, Vision, and Values
As an entrepreneur, it’s likely that the mission, vision, and values of your startup are crystal clear in your mind. Before you start bringing employees onboard, take the time to document these important concepts in a way that can easily be communicated to people who haven’t been with you since the very beginning.
Having written mission, vision, and values statements will make it easier to communicate with prospective employees about job opportunities and allow them to make an informed decision about whether or not they are truly passionate about what your startup is seeking to accomplish.
Identify Specific Hiring Needs
Make a priority list of which positions need to be filled with employees at this point in time. Consider the needs of the business, focusing on core roles that are critical to positioning your organization to effectively meet or exceed the needs of current customers while continuing to grow and innovate. Prioritizing which positions need to be filled now versus ones that are not the highest priority at this time can help you successfully scale your startup at this pivotal growth point.
Determine Remote vs. On-Site
As a startup poised to start building your team, you are uniquely positioned to incorporate flexibility into your hiring practices.
Hiring remote employees, while still a sobering reality of running a business in 2021, may eventually become a choice that employers can make, as they decide whether to pursue a fully remote, hybrid, or in-person workplace environment.This can help your startup grow exponentially, without having to expand physical office space or incur relocation costs for new hires.
How to Hire Employees for a Startup
Clarify Roles and Responsibilities
Once you know which positions you’ll be filling first and whether they’ll be on-site or remote, the next step will be to clarify the roles and responsibilities so that you can start the process of sourcing applicants.
This step should include identifying essential job functions for each position, as well as competencies necessary for success with your organization. Consider characteristics relevant to working for a startup, such as adaptability, innovation, and responsiveness to change.
Set Compensation and Benefits
Research to identify appropriate pay rates for the roles you’re adding, keeping in mind that benefits can also play a major role in hiring and retaining employees.
As a startup begins to add employees, it’s important to take a structured approach to compensation and benefits. Research to identify appropriate pay rates for the roles you’re adding, keeping in mind that benefits can play a major role in hiring and retaining employees.
Working with a professional employer organization (PEO) like Justworks can help startups level the playing field to effectively compete against larger employers for top talent. Through a PEO, startups are able to provide employees with access to big company benefits, including health insurance, at reasonable rates.
Recruit and Source Candidates
Once you can accurately discuss position requirements and compensation, it’s time to start recruiting. You may want to handle recruiting internally, publishing job announcements and screening candidates yourself. Or, you may want to outsource certain aspects of the process by using a staffing firm for recruiting and initial screening, with only a shortlist of prequalified candidates sent to you for consideration. Either way, it’s imperative to keep diversity and inclusion at the forefront of your hiring practices as well as thinking long-term about how to help candidates grow within your company.
Interview and Select Candidates
Consider characteristics relevant to working for a startup, such as adaptability, innovation, and responsiveness to change.
As you are interviewing candidates, keep in mind the company’s immediate needs and long term goals. While skills are an important hiring consideration, they aren’t the only one. It’s also important to select candidates who are a good fit for the culture of your rapidly growing business. Once you’ve interviewed candidates and are ready to make a selection decision, it’s just about time to make an offer and welcome the new hire(s) you’ve selected to your team.
Streamline New Hire Administration
Before you make a job offer to anyone, though, you’ll want to make sure that you are prepared to add employees to your team in a way that is in compliance with all applicable federal, state, and local laws and regulations, which can be quite challenging for a startup. Fortunately, Justworks customers are able to rely on a seamless cloud-based HR technology platform that simplifies the administrative, payroll, and compliance components of new hire setup, onboarding, and day-to-day HR functions, along with 24/7 access to full-service support.
Using a PEO to Grow with Confidence
By following these steps and getting the right HR management platform in place, you’ll be prepared to build out the team without making common startup payroll and HR mistakes. The best hiring practices for a startup focus on finding the right people to position your organization for further growth without diverting your attention from strategic activities.
Justworks is committed to helping startups grow with confidence, allowing entrepreneurs like you to stay focused on growing your business rather than being distracted by the paperwork involved in setting up new hires and administering payroll. While the new employee setup process is important (everyone wants to get paid, right?), getting bogged down in them isn’t the best use of a growth-minded entrepreneur’s time.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.