10 September 2019
2 hiring mistakes in scaleups (and how to avoid them)
Do you know what’s the number one scale-up pitfall? Hiring. And it’s happening even twice, because there are two different growth stages where you should master certain hiring skills – and most scale-ups recognize that too late.
More than 75% of our clients is in the scaleups stage, so we experience the challenges in terms of hiring on a daily base. In this blog I will share the 2 most common hiring mistakes (linked to different growth stages of your scale-up) and how to avoid them.
10-25 people: From family to small village.
If you’re with 10 people you officially made it to the Death Valley stage. And although that sounds not very well, you should actually be really proud, because 90% of all startups won’t even make it to this point!
Alright, so this is the stage where your team feels like a family. Everyone knows everything (and everyone), there aren’t too many rules and guidelines and most of your employees have the freedom to experiment. And the funniest part: Just like every family has its own (weird) characteristics, your team will have these as well. So all of a sudden there’s some sort of company culture.
Low hiring know-how and clear vision on fit
A team of 10 people will have a company culture – or at least certain traits/standards that characterize the company. Here at Equalture we reached this point and funnily enough I also experience a culture.
Because of the fact that the team is small enough to know everyone and recognize all different interactions between your team members, at least the founding team will have clear vision on fit. In order words: We now know what we’re looking for in terms of both (soft) skills and personality.
The thing most scaleups in this stage don’t know is how the hell hiring works. What tools do I need? How to structure the process? In other words: I know what I want, but how do I find out whether a candidate has what I want?
The result: Bad hires due to a lack of expertise.
These are the tools you need in this stage
Of course you should start with determining your hiring pipeline. We always have the following structure:
- Candidate screening and ranking (with the help of our very own pre-selection technology);
- 1st interview (1 Co-Founder, 1 team member);
- 2nd interview (2 Co-Founders);
At this point you need tooling for two different reasons:
- You need some help with your candidate screening (after all, gut feeling is the one thing you shouldn’t trust on during a hiring process);
- You need a place to ‘store’ all information.
Candidate screening: Pre-employment assessments
One of the hardest things to learn in recruitment is how to properly predict a candidate’s fit in terms of skill set, skill level and personality.
Assessments can help you to objectively screen candidates and determine whether there’s a mutual fit. And since you have a clear vision on fit in this stage, all you need to do is finding an assessment tool that’s able to measure the traits you want to measure.
Structure your hiring process: Applicant Tracking System
Collecting information is important, but it’s worth nothing if you don’t ‘store’ it correctly. That’s why most companies work with an Applicant Tracking System (ATS): A tool in which you can create your jobs and manage your candidates.
We for instance work with Recruitee, which is a really suitable tool when you’re new to recruitment technology. Here we see an overview of all candidates (sorted by application status), an Equalture matching profile per candidate and all notes we’ve made during and after an interview.
This is a relatively cheap solution to prevent yourself from creating a chaos in your email inbox – because that’s what will happen as long as you’re desperately trying to order your applications in your mailbox.
60-100 people: From village to urban city.
Where it feels like a big family or a small village up to 25 people, with 60 people you will enter the point where you might not really know someone from another team. There will (hopefully) be more diversity in your team, which will now only make it more challenging to measure your culture, but moreover it will change your culture. Besides you’ve hired quite some people now, so there will be a much better know-how of hiring and different hiring tools.
High know-how of hiring and unclear vision on fit
The classic mistake that many scaleups make in this growth stage is that, when hiring for cultural fit, they hire for their a non-existing cultural fit. Because culture changes and will most likely be completely different when you’re with 60 people than with 10 or 25 people. So your company culture with 10 people doesn’t exist anymore.
The result: bad hires due to wrong fit measurements.
These are the tools you need in this stage
In this stage you need tooling to tackle the following challenges:
- Team fit and company fit should be redefined;
- Performance management should be defined.
Team fit and company fit: Assessments
At this point you will again need assessments. However, in this stage you will use an assessment tool differently.
In the 10-25 people stage you had a clear vision on the (soft) skills and personality traits a candidate should have. This will change in the 60-100 people stage because the group is simply too big.
Therefore the role of an assessment tool should not only be assessing candidates, but also your current team. To give you an example: Many of our clients start with an internal benchmark when buying product. We will let the different teams play the games theirselves to measure the minimum skill levels and shared personality traits. This helps to (re)define both team fit and company fit.
Performance Management System
Another thing you should start with in this stage is better monitoring your team and its performances. In the 10-25 people stage you will notice it soon enough when someone doesn’t perform well. In a team with 60 to 100 people it’s easier to (i) perform below expectations without getting noticed and (ii) hire a new colleague instead of restructuring a current team. After all, you’re already in the luxury position to have a company with 61 or 99 people, so who cares about the costs of one extra colleague?
To prevent yourself from spending too much on people by not getting all potential out of your team I would recommend you to implement a Performance Management System (PMS). A good example is Impraise, a Dutch PMS that is specialized in scaleup teams.
Made it to a team of 100 people in your company? Congrats, this means you actually learned from your hiring mistakes and you’re ready for the real deal – because hiring will always be a tough challenge, but as long as you know where to focus on in which stage of your company it will all be cool.
Are you keen to learn more about how Equalture can help you during your different growth stages? Just schedule a 30-min video call with us. And don’t worry, there are no strings attached.