It can be tough to attract talented individuals to join your startup, especially when you’re competing with big companies that can offer more money and better compensation packages.
Without the right team in place, your idea will always remain an idea. For early-stage startups to be successful, you will need the right people with the right skills to commercialise products and solutions.
It’s difficult to sell a new product to customers who have never heard of it before, or consumers who already have specific brand preferences. It all comes down to what distinguishes your product from the hundreds of similar products on the market.
Similarly, it’s harder to convince high-quality talent to join you if you don’t have a strong employer brand to catch their eye. Therein lies the challenge - while you need employees to materialise and commercialise your product, you may only have an idea or prototype to show for now.
This article details the challenges startup founders face when it comes to hiring new talent to join their company and the best ways to overcome them.
the idea of joining a startup scares people
Most people are hesitant about joining a startup because there are too many uncertainties and variables about their role and professional growth.
They may fear that by taking a leap of faith, they may inherently be putting their job and income stability at risk.
Founders may end up selling their businesses much earlier than anticipated due to poor cash flow issues or a too-good-to-be-true bid from a larger company. They may also be impacted by global recessions and poor market conditions that force them to call it quits before it’s too late.
1. most employees at startups have an exit plan
Although people understand failures are inevitable, nobody wants to go down on a sinking ship either.
Depending on the maturity of the startup, most of the employees joining them have the intention to work for a year or less before moving on to their next job.
They may accept job offers and join a startup because they’re curious about the realities of working in a startup environment, or they could be genuinely invested in the startup’s vision and want to feel the satisfaction of bringing it to life.
Despite their intentions to leave early, most employees are committed to their job as they often make significant and positive changes during their time working with startups. Impactful work can be as simple as creating standard operating procedures or as complex as developing a new prototype.
Some employees eventually stay on as they enjoy their work and they can connect with the company’s clear business direction.
2. startups sometimes overcompensate with high offers
The flexibility of startups can be a double-edged sword.
On one hand, employees are usually working with a small, tight-knit team on cutting-edge projects. On the other hand, they’re also often working long hours and on different tasks that stretch their capacity.
Given the lack of brand awareness, the risks talent take and the possibility of having a heavier workload, some startups overcompensate by offering starting salaries that are significantly above market rate to outbid their competitors.
Some may even throw in ownership equity, high commissions and completion bonuses as part of their talent attraction and retention strategies so that they can grow and scale quickly, as well as meet the deadlines that were promised to their investors.
However, this has proven to be an unsustainable tactic that may upset investors who are looking to realise their profits earlier. Companies will take longer to turn their bottom line green when overhead costs like salaries, insurance and provident funds are high.
understand why people want to work for a startup
Job seekers are looking for companies that can offer the whole package - salary, flexibility, happiness and purpose.
As a startup, you have the ability to create the company culture you desire from the ground up, something that big multinational companies may not have.
Rather than rushing into hiring, it’s important to take the time to set workforce diversity frameworks and goals, and be specific about what you want your employer brand to look like to ensure a good talent fit. Most importantly, you get to decide what type of skills, personalities and attitudes you want for your company culture.
1. people of all ages are curious about working in a startup
There is a misconception that startups only attract a specific demographic. The origin stories of Meta (formerly Facebook) and Paypal have created the ubiquitous impression of startups being founded and staffed by young people working from their garages and school libraries.
Venture capitalists and fintech startups with younger founders are also more likely to get more attention in the press.
However, with the increasing number of startups and more people developing an entrepreneurial mindset to become their own boss, professionals are now more open to working for a startup.
There are about 3,800 tech-enabled startups and many more in consulting and services in Singapore tackling some of the most challenging business problems. In Malaysia, 5,000 startups are creating much-needed competition, while nearly 4,000 startups in Hong Kong SAR are helping businesses develop solutions for their complex issues.
2. some people desire the status of being in a pioneer team
Despite the uncertainties, there are still some people who are open to joining a startup. Southeast Asia is home to 52 unicorns. Unicorns in China account for 40% of the global market.
These successes have boosted job seekers’ confidence in startups. Furthermore, startups offer talent an unconventional path with accelerated career growth opportunities, as they are able to fast-track their careers without the frustrations of red tape that would typically restrict their ambition to try something different.
Some are also attracted to the idea of being a “founding member” of a successful startup, a recognition that many people desire, as it boosts their credibility and paves a long-term career path of being a highly-attractive leader.
There is also a group of talent who are intrigued by the opportunity to work directly with pioneer employees, especially if they have a positive track record of setting up for other successful startups too. This creates a learning and growth opportunity beyond developing technical competencies, as employees can also get to network with them and exchange creative and original ideas.
3. it’s your idea and people that help seal the deal
Before meeting with investors, you’ll typically prepare a presentation and practise your pitch with your colleagues and peers. Why not do the same when attracting new talent?
Talent is curious about startups because they want to connect with a vision. They want to know how their skills and experience can realise that purpose so that they can feel satisfied with their jobs.
Instead of boring them with details of their job responsibilities and employee benefits (which are still necessary during a job interview), talk about how their work contributions can help to realise the company’s business goals. Help them envision how it will look like to take on a role that brings the company to the next level and how they can truly contribute to your team.
For instance, startups like Impossible Foods and Duolingo were created to solve complex problems, from climate change issues to learning a new language and connecting different cultures. Closer to home, Grab has helped small businesses expand their customer reach while Klook offered people travelling to Asia affordable tickets to new experiences.
Besides selling them the company’s vision, you should arrange for your colleagues to meet the job applicant on a casual basis as part of the interview process.
These meetings help both job seekers and existing employees evaluate whether they can work and build meaningful and trusted connections with one another. Get your team to weigh in on the hiring decision as well, because they’re the ones who will know exactly what skills are needed for the role, and what type of personalities and attitudes are most suitable for the organisation.
network and hire the right talent
Since job seekers don’t exactly know who you are or what your company does, it’s important for you (and your other founding members) to network regularly and start building your employer brand.
Allocate budgets for your employees to attend as many conferences and seminars as they possibly can to expand their network and spread the word about your company. You can also participate in career fairs to promote and expose your company to qualified candidates and future employees. Hire eloquent and confident business development managers with a wide network who can get you discounted tickets to the hottest networking events happening in your city.
You can set up an employee referral programme to incentivise your employees to recommend people they know who would be a good fit for the role. Since their reputation is at stake, they are more likely to recommend only people they have enjoyed working with for the role.
Lastly, establish an online presence by using social media platforms to your advantage. Create a business profile for people to find you easily, and get your employees to actively share the company’s latest news, announcements and events, letting the algorithm do the rest. Hiring a community manager to manage your social media presence and networks will be key to your company’s success as well.
bring your entrepreneurial passion into your startup hiring process
We understand as a startup, you may not have a talent acquisition manager to help you with your payrolling and recruitment processes. This is where Randstad can help.
Our specialised recruiters are experts in recruitment strategies and can help match you with specialised talent for your business. We also have an independent contracting and payrolling team who can help you gain more flexibility in your workforce management as you get your cash flows in order.
Connect with us for your recruitment needs or simply for the latest talent insights so that you can narrow your talent search for faster and better results. Alternatively, if you are a job seeker looking for better career opportunities, visit our latest job listings, apply for a job and explore your possibilities.
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