There are many tips and advice on hand for business people about how to hire employees for startup businesses.
In fact, I bet almost all of them are quite effective. However, there is one key thing that they all overlook and that is how important it is to have employees once your business gets off the ground.
The startup phase of any business is very crucial and it requires the expertise of good professionals in key positions. Without employees to support you, there will be no progress made toward your ultimate goal – profitability.
In this article, we analyze how to hire employees for your startup and what are the most important roles to hire at the beginning.
What To Consider Before Hiring Employees For A Startup
When you think about how to hire employees for a startup, it is important to consider your budget. This means that you need to be very clear on what you can afford to spend for each employee.
It is also important to know how to hire employees for startups because this will allow you to know what to avoid.
For example, there are companies that hire just anyone regardless of their previous experience. In fact, some of these companies have employees with criminal backgrounds. Although some of them may not have criminal records, you will still risk employing someone with bad morals. This is why it is important to only hire people with a clean background. In this case, a background check becomes fundamental in your recruiting process.
Make sure that your employees have the right skill set in order for them to be able to do their jobs well. For instance, if you are a website design company, you may want to hire people who can optimize your website. Optimizing your website will enable you to get more traffic which will translate into increased sales. However, you have to make sure that your employees are able to optimize the website because otherwise, you will be wasting your money.
It is also important for you to conduct employee training when you are hiring employees for startups. The employees should also be able to understand the rules and regulations of your company. You have to be very clear on the rules regarding overtime and other rules that govern the operation of your business. This way, you will be able to avoid problems and ensure that your employees follow the rules.
8 Strategies And Tips To Effectively Hire Employees For A Startup
The world of business is a tough place to be, even if you are just starting out. You have to learn what the competition is doing, find out what makes your business stand out from the rest, how to attract the best employees possible, and how to keep them on your payroll year after year.
Below we show you some tips that can help you to hire employees for your startup.
1) Understand your audience first
This is an interesting tip because it is something that usually companies do not consider too much. One of the first tips for the recruitment of employees is that you have to understand your audience, who your products and services are meant for. Once you have determined who your audience is, you can focus on creating the ideal environment to sell your product or service, including the best employees that will help to achieve this goal.
2) Motivation is important for employees in a startup
When you hire employees for a startup, you want to keep them motivated. Motivation is one of the most important traits that you look for in potential employees. After all, if your employees aren’t motivated enough to do their work, you won’t get much accomplished. Motivated employees are eager to learn new things and to work hard. They are willing to try things and see things that might be a problem. People who are motivated are happy and stay at jobs that they enjoy.
3) Navigate websites and job portals to find the best employees
There are a number of websites that will allow you to connect with other companies that are in the startup stage. You can also look at job boards and freelance sites to see if there are any candidates that are willing to work for startups. The only problem with this is that the recruiting process in this case can take too much time, and usually, startup owners want to do this quickly. That brings us to the next point…
4) Use a recruitment agency to help you finding and hiring employees
A recruitment agency can help to outsource all the stages of recruitment, from the search of the right candidates to the onboarding of them. A recruitment agency is specialized in finding employees in different industries and it can easily speed up the recruitment process.
5) Understand legal requirements to hire employees
It’s a good idea to make sure you’re familiar with local and federal employment laws, such as job discrimination laws. For example, make sure you know how to avoid job discrimination in your job postings. If there’s a chance your post has discriminatory wording, someone can sue your business.
6) Networking
As well as sorting out your online presence, it’s just as important to dedicate time to networking in the real world. Attending conferences, talks or tech meetups are great ways to grow your network. You might even meet your next hire there.
7) Think about the costs/benefits before hiring your next team member
The new candidate you will be hiring needs to be able to add value to your organization. Since your startup is small and growing, it is important to bring in resources that can deliver tangible value for the company in a timeframe that makes sense. That is why you should consider aspects related to salary, taxes, benefits, equipment, training and evaluate these with regards to benefits as more sales, expansion, relief.
8) Try freelancers at the beginning
If in the beginning, your startup can’t afford full-time employees, trying to hire freelancers is a cost-effective solution. Most of the time, you do not have to consider taxes and benefits, and the salary becomes the main cost, considering that nowadays you can easily find freelancers that can work remotely for you.
The First People You Should Hire For Your Startup
There are a lot of entrepreneurs who do not know how to hire the first employees for their startup.
It is actually not easy to exactly understand which employees to hire at the beginning of the startup journey. There are many positions that could potentially help the startup to grow, but there are some that you should focus on.
In this section, we give an overview of the first employees that you should hire for your startup.
1) Product manager
The product manager, especially in the case of startups that make products, will be your go-to person for all things product-related. This member of the team is in charge of product strategy, vision, and growth. To develop and promote the product, they usually collaborate closely with the engineering and marketing departments.
2) Chief Technology Officer (CTO)
A member of your team who specializes in technology and growth, particularly for tech startups, is critical to the success of your company. While you can recruit freelance front-end and back-end engineers, having someone on your internal team in charge of this area can be beneficial. This job can be split into two separate roles as your team expands.
3) Sales manager
This team member will be responsible for generating new leads and generating revenue for your company. Startups and small business owners who master sales first survive longer.
4) Chief Marketing Officer
This member of your team will concentrate on your customers and how they perceive your product or service. Recruiting a professional with outstanding marketing and advertising expertise is critical to ensuring that your vision reaches a large audience. In this stage, the chief marketing officer should be a jack-of-all-trades. At a later stage, you can expand the team with more specific positions.
5) Customer service representative
Customer service is a vital skill that any company should have. The foundation of your brand is developing meaningful relationships with your consumers and clients. Your credibility will eventually suffer if you don’t have a specialist answering customer inquiries, calls, or complaints. You’ll want to fill this role as soon as possible.
Positions to outsource
Several tasks may be delegated to freelancers or third-party providers. Company owners should consider outsourcing something they aren’t very good at as soon as the returns justify the expenditure.
Some of the positions that would be better to outsource at the beginning are:
- Accountants and financial advisors
- Legal advisors
- Administrative positions
- Web developers, designers, programmers
- Content writers
- HR and payroll specialists
The Importance Of HR Compliance For Startups
Although it might appear that a startup does not need an HR department, ignoring such HR tasks may lead to a slew of issues. Small businesses and startups, by definition, have fewer staff, so they have a tendency to underestimate the role of Human Resources in their organizations.
Although human resources can appear to be a simple collection of tasks, it is as multi-faceted and complex as any other department required to run a successful company. HR policies can be applied haphazardly without HR experts.
Compliance with local laws
In a small business, the founders and managers often have little to no experience with hiring and management. They are completely unaware of the numerous federal and state laws and regulations with which they must comply.
Sometimes a startup needs to hire employees to work remotely for the company and in this case, it must make sure that the employment contract is in compliance with local laws.
Taxes and benefits
The challenges for a startup are related mainly to payroll. Because startups usually do not have employees working in the HR department, it becomes complicated to properly manage taxes and benefits for employees.
Most of the time, managers and founders do not have a clear idea of what to do to manage taxes and benefits for their employees, but this can impact a lot the business situation.
How NNRoad Can Help Your Startup To Succeed
As we previously said, one of the most significant obstacles for startups is finding and recruiting the right workers to begin with.
Usually, larger companies use the strategy of outsourcing HR, but small businesses and startups with five to 100 employees can also greatly benefit from outsourcing HR.
The easy and low-risk solution is to use the services of a PEO (Professional Employer Organization) like us.
What are the benefits of doing this?
First of all, we want to mention a study from NAPEO (National Association of Professional Employer Organizations) that showed that businesses that use a PEO experienced the following benefits:
- 7-9% faster growth
- 50% more likely to stay in business
- 10-14% lower employee turnover
A PEO will provide immense relief from the pressure of HR compliance and companies can have long and short-term benefits.
Below we show you some of them:
1) Avoid hiring internal staff to manage HR
Many startups, especially at the beginning, find it difficult to hire an internal resource to handle HR and payroll procedures. SMEs and startups typically do not have the time or resources to hire internal staff to deal with these HR issues, and the main issue is that the internal staff should be responsible for HR in the country where you intend to grow, as well as managing compliance with local laws. This, most of the time is hard to obtain unless you use a PEO that can help you to take care of HR and payroll.
2) Better hiring and onboarding processes
Consider the possibility of expanding your company into a new country and recruiting staff to run it. You’ll have to go through the candidate selection process, interviews, background checks, and onboarding, all of which can slow down your company’s growth and, sadly, cannot guarantee that you’ll find the right resource at the end of the process. Working with a PEO can put you in contact with local experts with years of experience in recruitment and in managing the onboarding process, helping you to find the best employees to start your business.
3) Better payroll management
Another significant benefit for startups is the factor of payroll. Dealing with payroll is difficult because it necessitates a thorough understanding of local tax and benefit laws and regulations. Accounting professionals with years of experience managing payroll issues are employed by PEOs. Not only does this free up business owners to focus on the growth and development of their business, but it lowers the chance of any costly errors in payroll management.
4) No more compliance issues
Figuring out how to manage complicated local and state laws and regulations is one of the greatest headaches for many startups. Through outsourcing your company’s HR needs, you’re allowing PEO experts to ensure that your company complies with all applicable labor laws. This will assist the company in avoiding possible litigation in the future.
Conclusion
Hiring and managing payroll for the employees of your startup can be problematic, especially when expanding abroad and dealing with different labor laws and regulations.
As we have seen, using the services of a global PEO can reduce many risks and costs that businesses have to deal with when expanding into new countries.
If you are interested to know more about our service and how we can help you with your business expansion plan, feel free to get in touch with us!