With the Prime Minister’s thrust on ‘Make in India’ campaign and its offshoot, ‘Start-up India, Stand-up India’, the start-up ecosphere in our country has received a shot-in-the-arm. The advent of app-based technology has spurred the rise of food delivery, ecommerce, grocery, travel industry and many others. Foreign investments, angel funds and banks have all expressed interest in the ‘start-up’ culture, largely due to the high scalability of these business models and predicted profitability margins and huge market shares. Consequently, the need for a talented and versatile workforce, both technical and managerial, has led to intense talent wars between established players in the industry and those waiting to surge ahead. In such a scenario, authors feel, it is imperative to discuss one of the most essential ingredients of this success story, i.e., recruitment vis-à-vis the challenges incumbent on these companies, the prevalent best global practices, recruiting remedies and innovative methods to reengineer traditional recruitment setups.
How start-up hiring differs from that of established firms
Start-ups, being typically small, when they start out, have a high growth rate as the process is scalable. However, due to constrained resources, in terms of manpower, technology, and budget, the approach towards recruitment has to be tailored differently from what their ‘big-league’ counterparts adopt. The key differences in the strategic approach to recruitment between the two are:
- Sell vision and mission: Unlike established companies, startups do not have brand image or competitive benefits to use as tools for enticing candidates. They therefore have to focus on selling what they as an organization seek to accomplish. However, the vision and mission of the firm while appearing aspirational should have a realistic balance such that the vision does not appear unachievable.
- Target versatility: Startups during their initial phase do not need to hire specialists, but need to hire versatile candidates who can take up multiple roles at once. It therefore makes sense for them to involve as many candidates during an interview process as possible which will broaden the horizon of candidature pool and trap flexible candidates. However, along with flexibility, it is also very important that the candidate is a social fit for the organization as the set-up of a startup requires colleagues to work in close proximity with each other.
Challenges in start-up hiring
While the work-environment in an entrepreneurial venture may be dynamic and ever evolving, there are a few inherent disadvantages in the positioning of a start-up as an attractive choice of employment. Guillaume Decugis, CEO of Scoop.it, aptly summarizes in his words -“why would A-players jump ship to work with anobody? For startups, recruiting is a marketing job”. A further elucidation of the most critical challenges is provided below:
- Long work hours and less pay: unlike a 9-5 job, a start-up requires a high degree of organizational commitment, tolerance for uncertainty, and focus on long-term results as opposed to short-term gains. Thus, lateral employees with 2+ years’ experience in established firms find it difficult to adjust to a diametrically opposite culture.
- Scarcity of Resources: Due to lack of access to sophisticated recruitment channels/instruments, additional burden is imposed on the already frugal manpower, who are sometimes diverted from their core competency into doing a role they are not adequately qualified for.
- Hiring for position versus Hiring great people regardless of position: Too much emphasis on the position can result in overlooking talented and visionary employees. However, an alarming mismatch between job description and candidate competencies may also result in veering off the right track.
- Lack of brand value and employee’s concern for stability: Perhaps the most critical factors; funding, profitability and expected growth are big question marks for any startup. Hence, as stated before, selling the company’s vision, explaining it and showing the prospect how he can help the story move forward, are of paramount importance.
Prevalent Global Best Practices
Before we suggest some remedies and radical approaches to re-engineering recruitment strategies, an overview of some of the best practices adopted by growing businesses globally would be in order. While there are several unique tactics in play, we decided to showcase the ones we thought were truly innovative and consolidated them.
- Exceptional Job Descriptions: iPlace USA, a recruiting firm, advertises open positions through videos. Bollywood themed videos narrating love stories of two college graduates seeking their 1st job were used to drive the message how the company differed from competitors vis-à-vis salary, incentives, pay-for-performance and ethics. At Money Desktop, billboards are put up to showcase the type of problems that can only be solved by most talented software developers.
- Hiring failed entrepreneurs: TaxiForSure values those who have tried on their own but could not succeed due to some reason(s). For dealing with multiple and diverse roles, in a challenging, fast-paced and dynamically changing environment, candidates who have a ‘self-starter’ and ‘take ownership’ spirit, are preferred.
- Role-play/Sample Project: ‘Branch’, a social media startup, funded indirectly by founders of Twitter, organizes hackathons, to which local software developers and college students are invited, on a long weekend. They compete with the company’s developers; Branch can then identify potential recruits even before recruiting formally starts!
- Orthogonal strategy: Unmetric, an Indian social media analytic firm, hires smart, intelligent people for roles they would typically not consider. Their diverse team of aeronautical engineers, lawyers and teachers, manage marketing, operations, and finance. Thus experience in another field, combined with raw talent is leveraged successfully.
- Overhauling the ‘traditional interview process: Spotify, a music streaming service, holds ‘cultural interviews’ candidates after clearing preliminary technical screening and initial live interviews, are introduced to potential co-workers and managers in an informal setting, such as a bar, or a coffee-house. This helps in effective evaluation of peer-peer interaction and thus culture fit, an increasingly important requirement.
Recruitment Remedies
Before attempting to overhaul existing approaches, a start-up can attempt to rectify some of the unintentional malpractices that plague the hiring efforts of established players. We recommend simple, yet effective measures:
- Anonymous resume screening and blind interviewing: Hide irrelevant information from resumes, conduct telephone interviews and written questionnaire interviews to avoid voice and visual bias.
- Analysis of cost of a bad recruit: Besides the apparent cost incurred by the firm, other cost intensive consequences of a bad recruit identified by CareerBuilder are lost sales and tarnishing of brand image due to unfavorable propagandas via referrals and social media.
- Speeding up of lead-time in recruitment: Prolonged lead-time would amount to losing out on good applicants who get approached by others. Criticism about such delay in social platforms could cost the firm to lose out on future potential recruits as well.
- Data analysis for quantifying business impact: Measure on-the-job performance of new recruits, group them into high and below average performers, and assess the common traits amongst the high performers to point out the traits that correlate with high performance. This would be helpful in collating data for future quality hires.
Reengineering recruitment
With innovation impacting almost every sphere of our lives, it is but impossible for HR to be unaffected by the sweeping changes around us. We suggest the following approaches:
- Focus on identifying passive candidates and building relationships: proactive effort through LinkedIn, College websites (for entry-level), and professional networks/associations, are some tactics for building a steady pipeline for recruitment. Tools like Quesocial and TalentREEF can also be used.
- Effective use of hiring manager social network: Hiring managers should be encouraged to tap personal social media channels to influence their networks. Social aggregator tools like sendible.com and wisestep.com can help in easing out-reach efforts.
- Treatment of recruiting as sales strategy: Identifying targets, collecting information on contacts, prospects and closes will help recruitment leaders identify good results and benchmarking them.
- Active use of HR analytics: Data scientists, who are already hired by start-ups aplenty, can explore tools like ‘WantedAnalytics.com’and ‘CareerBuilder’s Talent Supply Demand Tools’ to explore supply/demand gaps of specialized labor pools across geographies. This will enable more accurate decisions regarding selection of recruitment channels, sources and lead times. Though initially the cost may be a little higher, it is a one time cost as these capabilities can then be indigenously developed.
- Mobile platform and video based recruiting efforts: Employer branding, video job descriptions, communication with prospects, resume uploading and tracking should all be mobile friendly to take advantage of increasing mobile usage. This will help in increasing not only prospects but also the yield ratio. Job postings, job descriptions, employee profile can be moved from traditional text format to interactive video formats.
Final thoughts
To sum it all up, startups do indeed live up to the buzz they have created in the industry. It is an open ground for workforce strategists and enthusiasts alike, to formulate strategies in the field of recruitment whilst experiencing an evolutionary journey alongside the uncertainties borne by startups intrinsically. There would be no better way to sell their vision as that for organizations born out of radical thoughts, seeking accomplishments, while staying true to their core values.
References
- Team Zip Recruiter, “How startup hiring is different”,www.ziprecruiter. com/blog/how-startup-hiring-is-different
- David Smooke, “50 start-up founders share their biggest hiring challenges”, February 11, 2014,www.smartrecruiters.com/blog/50-startup-founders-share-their-biggest-hiring-challenges/
- Holly Regan, “Recruiting best practices from today’s hottest start-ups”, September 10, 2013, www.new-talent-times.softwareadvice. com/best-recruiting-from-startups
- Madhumita Prabhakar, “How four Indian startups are tacking the hiring challenge”, October 1, 2014, www.linkedin.com/pulse-how-four-indian-startups-are-tackling-the-hiring-challenge
- Pearl John, “Enhancing objectivity in talent acquisition”, Talent acquisition Practices in Indian Organizations, joint study by SHL Talent Measurement And People Matters, CEB & People Matters
Author Information:
Prateik Singh and Choden Tendup Bhutia
MBA (HR specialization), Batch of 2015-17, Symbiosis Centre for Management and Human Resource Development (SCMHRD), Pune
