Knowing When to Hire in a Startup

Problem

"Unless your startup raised million of dollars, it's safe to say that startups are always in a cash crunch. The work is growing, the expectations are growing, and the customer's needs are growing. But the company can't always afford to fill the increasing demands with a new hire contract. Thus, it is imperative to have in place a framework so that you can know when to hire and for what position."

Actions taken

"Especially in startups, I advise to wait to hire someone externally until two months after you feel an extreme pain point in the organization. By that I mean waiting until someone in the company is either about to get burnt out or until someone is working on tasks that are way beyond his or her capacity. This is because in startups people typically tend to take on multiple roles. It's the nature of the beast. But in my experience, two months is the make-it or break-it point. Here's why. In startups there are always going to be ups and downs. The team could be working through a push for a month, but after that the workload tapers off for the next four months. So even though everyone was working above and beyond their usual work for a few weeks, that doesn't mean that it wasn't manageable. That is why I recommend waiting two months because if that push were happening for that longer duration of time then there's a good chance that at least one person is feeling a permanent strain. Another reason why I say wait two months before hiring externally is because the whole dynamic of the team changes with every new addition to a startup. Unlike large companies- where the roles, responsibilities, and structures are stable and clearly defined- the responsibilities of individuals in a startup are constantly changing, shifting according to the needs of the company. So although you may have hired someone to alleviate some of the pressure from the highest pain point in the organization, that person needs time to adjust and to fuse into the role(s) that he or she will be dependent for. For example, the last eight hires that we onboarded are doing different work in addition to what they were initially hired for. They have expanded their scope and fashioned themselves to fit in. Only after some time did we identify the next highest pressure spot and hire there."

Lessons learned

• "One of the common mistakes that people make when hiring for a startup is hiring for the wrong role. They may realize that they don't have anyone for a specific position and plan to hire for that particular spot. However, be aware of the iterative nature of startups. Needs are constantly changing and while you may believe you need to fill that gap now, the position may become obsolete in the future."
• "Your strategy of when to hire and who to hire will shift as the company grows larger."