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The Most Common Startup Hiring Mistakes and How To Avoid Them

Hiring for startups can be both incredibly exciting and stressful.  While Fortune 500 companies usually have the capacity and budget for it, it can often stall a startup in its early growth stage.  Whether it’s because of limited budget or a lack of hiring experience and expertise, it’s not difficult to fall into the trap of some common startup hiring mistakes.

Know What You Need

The most common mistake is to hire without a developed plan.  Hiring talented people is important, but if they don’t have a well-defined and necessary role in the structure of your business, they can be left to float between various tasks or departments.  This can leave them feeling under-utilized and lacking in purpose, a common culprit in turnover.

It is important to outline the areas that need development, the required positions and their responsibilities, and how they fit into your developing organizational structure – then create job descriptions and advertisements that describe exactly what you’re looking for.  Hiring people who are legitimately well-suited to their roles contributes to cultivating a very strong sense of engagement in your employees, making it easier for them to stick around.

Hiring on a Whim

Another top hiring mistake in the startup world is to select a particular candidate because they’re  a friend of a friend, or an old classmate, or a fun person to be around.  Even if the candidate is talented, be careful to never let personal connections cloud judgement.

Hiring within your social circle is no crime – in fact, word of mouth referrals often provide suitable candidates.  However, you should always interview other people to be 100% sure that you’re really hiring the best.  After you’ve interviewed all candidates, you can assess whether they’re truly the best fit for your company.  Many recruitment firms work on contingency, so you can be open to interviewing their referrals in addition to your connections to be confident in your selection.  Having a group of qualified candidates to choose from is never a bad situation to be in.

Remember, the Turtle Beat the Hare

Rushing leads to poor judgement, rushed decisions, and ultimately, unsuccessful hires.  If you’re running on time constraints, take the time to interview thoroughly and resist the urge to hire the first good fit that comes your way.  A rushed hire that doesn’t work out, no matter how essential their skills are to you today, will set you far further back long term if it doesn’t work out.

You Get What You Pay For

When you have a limited budget, it can be all to easy to try to make the cheapest hire possible, but it is always worth it to invest in your new employees.  When you hire the best you can afford, you will see ROI long term in their invaluable experience and skills.  Similarly, it can be tempting to seek to do the entire hiring process on your own to save costs.  However, if there are parts of the hiring process, whether it’s building job descriptions, conducting reference checks, or conducting interviews, that you don’t have experience or expertise in, you can be incurring greater long term costs by not working with a partner company.

Of course, there are exceptions to the rule.  Not all skilled professionals require high salaries, and not all skilled candidates will be highly experienced professionals.  For example, in some cases a recent Computing Science graduate may be exactly what you’re looking for, in which case they likely won’t break your bank.  There is also more to compensation to salary – check out our Top Three Considerations for Designing Your Compensation Strategy.

The opportunity cost of spending your time on hiring instead of your business and the cost of a failed hire can be extremely detrimental to an early-stage company.  When you work with an agency for recruitment, you are usually also protecting your investment with a guarantee.  For example, TPD offers a recurring, extendable guarantee, so if your new hire doesn’t work out in the guarantee time frame, which you can extend at any point, the replacement cost is covered.

Whether you’re hiring a Software Developer or a CEO, avoiding these hiring mistakes can save you from the long term costs of turnover.  Don’t have the experience or expertise to execute all or part of the hiring process?  Check out our available free HR Tools here.

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