Opinions expressed by Entrepreneur contributors are their own.
Starting out is always tough, especially when building a team for an early-stage startup. Founders often lack the resources to attract and retain top talent, but having a strong team is critical to the product’s success.
From the candidate’s perspective, joining an early-stage startup might look like this: an unknown company; it could be a huge success, but it could also flop. The tasks are certainly interesting, but the level of uncertainty is high, the сompensation is modest, and there are no guarantees.
From the founder’s perspective, the situation is no better: there is no large budget, no established HR brand, no market positions, and it’s challenging to compete with the industry’s big players.
How can these two realities be brought together? Here are some tips I’ve developed and tested through personal experience. So, let’s dive deeper into it.
1. HR is not just about compensation — start with your culture
Building a strong culture is fundamental, and it should be a priority from day one. You’ve probably heard the iconic phrase “Culture eats strategy for breakfast.” Before creating and implementing a business strategy, it’s crucial to know who you are, where you currently stand, where you aspire to go, and the grand vision behind your company. Understand your core values and what values you aim to share with the world.
Founders must answer all these questions before starting to recruit and hire. This forms the mission, vision, and strategy of the startup. From these insights, you can develop an EVP.
2. Identify competencies and behavioral indicators
Next, consider the type of people you want on your team or those who will thrive with you. This involves understanding competencies and behavioral indicators.
For example, in a startup, employees need to have developed flexibility and adaptability since we work in a rapidly changing environment. We also highly value openness to new ideas, healthy ambition, a readiness to take risks for innovation, and the ability to stay calm and decisive under uncertainty and pressure.
If someone lacks these traits, it will be challenging for everyone involved, resulting in poor task performance. This employee probably won’t remain with the company for very long.
Related: From Crisis to Control — How to Lead Effectively in High-Stress Scenarios
3. Formulate your EVP and clearly communicate It
Startup-ready people are typically passionate enthusiasts and risk-takers. They value freedom, room for creativity, a sense of belonging to something significant, and opportunities for career growth. Ensure you offer these. If compensation is below market level, consider offering extra perks like stock options.
On the flip side, understand that startups aren’t for everyone. A candidate could be an outstanding specialist, but they won’t be happy if their mindset doesn’t fit the startup culture. No matter how many perks you offer, such as corporate psychologists, fitness trainers, family insurance, or interest clubs, if the person values stability and status, they won’t join a startup.
For a startup founder, it’s essential to talk about the product’s growth and future potential, communicate a culture of excitement and development, and emphasize the benefits and values it contributes to the world. These triggers are effective in attracting like-minded individuals. This should be part of your EVP — Employee Value Proposition. Choosing a job isn’t always about the pay. You need to know exactly who you’re looking for and understand the needs and expectations of potential candidates to attract the right talent.
4. Start building HR processes
Creating HR processes for an early-stage startup requires balancing structure and flexibility. Essential tasks like hiring and defining roles are set up immediately, while other processes develop over time as the startup expands.
Key HR areas include:
- Recruiting
- Training and development
- Performance management
- Compensation and bonuses
- Corporate culture and internal communications
- Performance evaluation
- Offboarding, etc.
Yes, you will have to deal with all this, and it will be a challenging journey.
Related: How HR Professionals Can Effectively Balance the Needs of the Employees and the Business
5. Consider outsourcing HR back office
For early-stage startups, the main difficulty lies in determining where, how, and when to search for the right talent. The workload is extensive, and experience is often limited, especially with only 24 hours in a day. Moreover, the founder needs to keep their strategic focus on the product. If you try to handle everything alone, the chances of approaching a successful and scalable business model drop dramatically.
Consider outsourcing HR Back Office processes. A team of specialists can manage all aspects, including recruitment, hiring, culture-building, HR branding, and creating retention and development programs.
By outsourcing HR tasks, you can speed up hiring and cut the costs associated with attracting and retaining talent. Most importantly, this frees you to dive deep into product development and reach your goals more quickly.
Building a team is a bottleneck for early-stage startups. This is primarily because of limited resources, high uncertainty, and difficulties in attracting and retaining talent. An early-stage startup is not a classic business, so HR processes for such projects have their own unique complexities.
Today’s top companies were once founded and developed by enthusiasts who believed in the big idea and took risks. Your task is to find such dreamers, innovators, and visionaries for your project — those who are ready to share the risks with you and strive together towards a big goal. The key to assembling your dream team is to know your mission, goals, and values clearly. With this clarity, finding people who share your mindset, worldview, and culture will be much easier.
