The decision to hire employees is a big decision for any start-up.  If it works out, the employee and the start-up will both benefit.  If it doesn’t work out, it could be expensive for the start-up.

Before hiring an employee ask yourself, do I need to hire employees?  If the answer is yes then ask yourself, is there an alternative?  Can the role be outsourced or done by a contractor?  If the tasks to be performed do not need to be performed on a regular basis then outsourcing or hiring a contractor may be a viable option.  However, if the tasks to be performed must be performed regularly and/or on an ongoing basis then it may be more cost effective in the long run to hire an employee.

So, if you decide to hire employees what do you need to look for in a candidate and what should you do?  It will always depend on the nature of the business, but here are some tips for hiring employees in a start-up no matter what business you’re in.

Where to look for candidates and what to look for in a candidate

  1. Ask for referrals from your network of friends, advisers and industry colleagues.  They know you best and any person they refer to you, so are best placed to know whether someone is a good fit for your business.
  2. Look for candidates with experience working in start-ups or smaller organisations, rather than big businesses.  Ideally, you want to find someone who is flexible, who can work both autonomously and as part of a team.
  3. Use recruiters, employment agencies and headhunters.  These people are professionals and have access to a range of candidates, particularly for executive positions.  They will charge you a fee, but are well placed to find you the right person.
  4. Go online and use employment/industry websites, job boards and blogs.  This will enable you to access a large number of potential candidates, hopefully at minimal expense.
  5. Put ads in newspapers and trade publications.  Like going online, this will enable you to access a large number of potential candidates, hopefully at minimal expense.
  6. Find someone who complements the skills of the existing team members and fills skills gaps.
  7. Clearly define the role, both so you find the right person and so only those people who are suited to, and want to do, the role apply for it.

What you should do

Your start-up may not be in a strong financial position and not able to take someone on full-time or take on full-time sufficient employees to meet the needs of the business.  However, there are some alternatives.

  1. Hire part-time and casual employees.  Not everyone wants to work full-time so there are plenty of capable and qualified people out there.  For example, stay at home parents and single parents.
  2. Defer or delay salaries or other payments until the business is profitable.  There will need to be plenty of upside for the employee otherwise the offer will not be tempting for any employee.
  3. Offer equity.  See our article “Issues to consider when looking at a job in a start-up” for more information on employee equity in a start-up.
  4. Employ interns.  Hire people who are seeking work experience opportunities, such as university students and people with no experience who are looking for an opportunity.

Conclusion

There are lots of options for employers looking to hire employees in a start-up. Remember, whatever you do, make sure everything is in writing with either an employment contract or a contractors contract.

Lachlan McKnight

Next Steps

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