Developing an efficient team is one of the most challenging tasks a startup owner can face. You may have a vision for the future of your company, but that is insufficient. Without a strong team behind you, your vision will never become a reality. However, how can you recruit the best talent? To answer this question and to assist you in developing a recruiting plan for startups that will propel your company to success, gain an insight into the startup hiring plan breakdown process.
When should you start building your startup hiring plan?
It is never too early to start! Ideally, founders and CEOs should begin to plan their recruiting strategies before they have the funds to pay for a pool of talents. This way, they can prepare or collect additional funds to offset potential burn rates. Many investors prefer pitches that involve a recruiting strategy because they know where their money will go and which critical positions or vulnerabilities will remain unfilled. However, suppose you come to this realization later in your company’s history, after you’ve made your first Talent/HR hire. You’ll also need to grasp the process to assess your team’s work and coordinate your efforts.
Three core steps you need to take for your startup hiring plan
Step 1: The approval
You need to institute a standard approval process that happens every time you open a role. This process should apply to all departments and positions at all levels, including full-time, part-time, and temp positions. This process should account for budget and resources for someone responsible (e.g., founder, executive, recruiter, hiring manager, or agency) to work on the role while defining the role and responsibilities.
Initiating a hire
The hiring leader discusses any new processions needs whenever a department needs to:
- Open and recruit for a new position
- Rehire for a position after a layoff or firing
- Hire a freelancer, contractor, or other temporary staffers.
The person who makes these approval calls could be the CEO or CFO, depending on your org structure.
Here’s a brief outline of how you need to launch the startup hiring plan. Remember that your recruiter, hiring manager, head of HR, and even founder could all be the same person depending on your team size.
- The hiring manager emails the decision-maker to request a new open position — this is called a requisition form. You can make this an easy-to-access template and post it on your wiki for all hiring managers to access. This should include:
- New, refill, or temp position
- Seniority level
- Reporting person
- The basic scope of the role/responsibilities/skillset required with JD attached
- Compensation benchmarks
- The decision-maker approves or rejects
- If approved, the requisition form is sent to HR (if you are a small team, this step may be handled by finance). It’s helpful to attach a job description at this point if it is available.
- HR/Finance reviews the requisition form to verify that the job’s responsibilities, necessary skills, and compensation match the role and suggests edits if necessary.
- Once approved, HR/Finance updates the compensation benchmark spreadsheet with the new role’s compensation bands and shares it with the hiring manager and CEO/Finance for final approval.
- The recruiter is given all relevant information and begins working with the hiring manager to launch the recruiting process.
Step 2: Headcount and capacity
Regardless of the uncertainty, it is critical to maintaining both a short and long-term startup hiring plan and document your recruiting progress each quarter. Investors and board members appreciate seeing these quarterly updates in your quarterly reports to them.
Suppose you are fortunate enough to have someone other than the founder (like lead talent acquisition). In that case, it is critical to provide them with guidelines in the form of a headcount plan and forecast (your recruiter, people operations, or HR team). Like sales employees, recruiters frequently manage pipelines and relationships with job candidates over time; providing them with insight into future hiring needs enables them to cultivate the right connections.
There are three critical points to consider: headcount planning (determining which new employees to hire), the approximate timeline, and capacity planning (determining how many roles your recruiter can take on any given time).
Planning for headcount
Budgeting for additional headcount typically begins in the early Q4 of your first year. All new positions are discussed and are subjected to the annual budgeting process for planning and approval.
Sometimes, the circumstances dictate the need for additional headcount outside of the previously approved roles. In this case, a discussion should be held to justify the new approval and ensure that the team understands why the position is prioritized over previously planned roles. The recruiter’s entire team must know that they will not be expected to work on or source candidates for roles that have not been approved.
The executive team should establish a hierarchy of roles to determine which three to five you’d like the recruiter to focus on first. And which higher-ranking roles will follow later on. Additionally, it’s a good idea to develop a plan for handling backfill if an existing team member leaves. Prepare scenarios where you may need to adjust your headcount plan in response to runway fluctuations or unexpected cash crunches.
Consider the following points when developing your headcount plan and forecast:
- Which individuals do you require today, in two quarters, a year from now, or even later? If you’re looking to hire primarily executives in a short period, you’ll probably want to work with external recruiters. If you’re looking to hire a few key individuals, an in-house recruiter should be able to assist you.
- How much do the roles in your short and long-term plans pay? Additionally, determine how much budget you should allocate for agency fees or referral bonuses for each position.
- How long do you anticipate hiring for each position? When is the anticipated start date for each role?
Planning for capacity
You must establish a reasonable workload for your recruiters to avoid burning them out. This is why it is beneficial to develop a framework for defining the degree of complexity associated with roles.
Roles that are easy to fill or already exist and require little setup can be labeled “Tier 1”. Roles with higher seniority levels or require specialized skills should have the highest scoring, like “Tier 5”. Because recruiters typically fill around 3 to 4 people per quarter, this approach can establish alignment around priorities and realistic expectations. You’ll want to measure or at least estimate your recruiting ratio. This is defined as how many candidates you will need to source and move through each phase of the interview funnel to reach your hiring goals.
Step 3: Positions to fill
Consider the big picture when deciding who to hire with the following factors: the composition of your company and the experience distribution you require. Each management meeting should include a discussion of upcoming hiring needs. These discussions should then be incorporated into the company’s annual hiring plan to ensure that growth targets are met without jeopardizing the budget.
When the hiring manager and recruiter are ready to consider individual roles, they should collaborate to create a detailed job description. We frequently recommend that hiring managers articulate their approval process requirements first and then revisit them with the recruiter at the start of the search.
The following questions should serve as a guide for these discussions, both at the executive and hiring manager levels:
- Why are we creating this position?
- Which way will they steer the company?
- Why are we currently hiring for this position?
- How will this position work in conjunction with current leadership?
- How will their success manifest itself in the first six months? The initial year?
- Which companies have unquestionably recruited top talent for this position?
- What is the prior experience required of the ideal candidate?
5 Core Aspects of your startup hiring plan
Try to Outsource
The workload associated with early-stage companies is often daunting. To alleviate the burden, you can expedite the hiring process and make incorrect decisions. This can be a time-consuming and expensive error. Try collaborating with the outsource companies instead. These agencies will assist you with meeting all of your business needs: from software development to marketing and customer service. By collaborating with agencies, you can understand the skills and qualifications that a candidate must possess to be a promising recruit.
Understand your candidates
Not only work-related skills decide a candidate’s performance. Another critical factor in one’s personality. Are they culturally compatible with the organization? Otherwise, it can harm their ability to do quality work.
Ask personal questions during the recruiting process. What interests and extracurricular activities would the candidate have? The responses provide insight into a person’s personality and social abilities. Consider sending the members on an enjoyable outdoor adventure to assess their problem-solving skills. You’d be shocked at the perspectives that an escape room or treasure hunt experience can have.
In summary, when recruiting for strategy positions at startups, you should consider the candidates’ response (or reaction) to pressure and the extent to which their problem-solving abilities assist them.
Share your Hiring
Unless your startup is hugely well-known, you would almost certainly need to advertise job openings. Here are a few cost-effective and innovative ways to do so:
- Promote your business on famous email newsletters in your field.
- Substack or Twitter are great places to look for such newsletters. For entry-level and internship openings, contact local universities.
- Make contact with recruiting firms that specialize in your field (more on this below).
- Upgrade to Recruiter Lite on your Linkedin account. The Recruiter Lite free trial is available for the first month. The service costs $105 a month after that. Post in your target group’s local slack groups (developers, UX designers, SEO experts, etc.).
Do not Overhire
Two things will happen if you overhire. For starters, you’ll pay more people, which means you’ll run out of money faster. Overhiring will cause you to slow down rather than develop more quickly.
Once you have people on board, you will be pressured to assign them tasks, eventually resulting in more functions than you need and a loss of concentration. When you recruit lots of people, you slow down and miss important deadlines. As a result, you will not only burn through capital quicker, but you will also make less money. Spend a lot of time considering the recruiting strategy. You will develop the company and meet your goals faster if you nail it and make the right hires.
Make Fast Decisions
The startup world is a fast-paced environment. This is frequently reflected in the recruiting process. Before establishing an HR department, the startup founder is the one who is responsible for hiring. However, since an organization is only as powerful as its weakest connection, this phase should not be rushed.
Split the hiring process into three rounds – (A) an introductory meeting, (B) a deep dive into the applicant’s expertise and experience, and (C) a test assignment – is the bare minimum you can do to qualify a candidate.
Begin with short-term employment of 1-3 months. You will gain a greater understanding of a candidate’s success and team spirit during the probation period. Don’t wait too long if the nominee isn’t performing as intended. The sooner you let them go, the sooner you will start searching for someone who is a better match for you.
All great businesses began as a small group of visionary entrepreneurs. Although seeking exceptional workers is not easy, it is a critical component of future success. The information in this article should assist you in identifying and hiring top talent in your field while also outsourcing tasks before you reach that level of expertise. Bear in mind that each startup’s recruiting plan will be based on its unique needs. However, what if you are a complete beginner in all this startup hiring plan processing? You might get confused quickly on how you should with your hiring process. Furthermore, suppose you already own an excellent funding amount. In that case, it could be more troublesome not only for your hiring process to be executed but also for your product development to be constructed.
To avoid such complications, JetRuby has developed a technological flow with one core priority: understanding how your digital product can be correctly developed. The very first step of our technological development flow is called a Product Development Strategy. It is an accessible business consulting service where our experts will produce a general plan covering the future product development and the action plan with high-level features. Already got interested? Leave your project details below, and we will contact you in under 24 hours!