28 November 2019
Our Manifesto For Scalable Hiring
”My twin sister, Fleur, and I started Equalture in 2018 because we firmly believe that your #1 recipe for company success is Scalable Hiring. In this manifesto I will explain our definition of Scalable Hiring and share why a growing company can’t live without this.”
Company Sustainability: Why it all starts with Hiring Success
”Company sustainability. It’s the ultimate goal of every scaleup that’s aiming to conquer the world. The surprising thing, however, is that some startup/scaleup founders perceive their business case as their growth enabler and the team ‘just’ as an asset to actually grow.
If that’s what you’re thinking as well, I hope this manifesto is a wake up call for you — because a business case isn’t a company. It’s just your first step towards setting up a company and (hopefully) it’s the foundation of the vision you have for your company.
The real growth enabler, however, is your team, or even more specific: The extend to which you’re able to successfully build a team:
- Your company isn’t sustainable if your potential market size is growing, while your market share is decreasing;
- Your market share can’t grow if you’re not successfully growing (in terms of both sales and the quality of your product/service) or when clients don’t stay with you;
- You can’t both grow your sales & product and make your customers happy without a top-performing team;
- Your team won’t perform well if they’re not happy or when your team isn’t stable (meaning that there’s a high turnover rate);
- And ultimately: People aren’t happy and will leave your company when there’s a misfit or if the team is too homogeneous.
And the only way to prevent this is by making the right hiring decisions by making your hiring predictable. Or like we say: Hiring Success.
The three dimensions of Hiring Success
When it comes to predicting Hiring Success, the following three dimensions are the ones you should definitely master:
- Job fit;
- Cultural fit;
- Team heterogeneity.
Job fit and Cultural fit: The Fit Prediction Cycle
This is our definition of job fit:
Job fit is the extend to which a person fits the required competencies of a specific position in terms of skill sets and intelligence.
This is our definition of cultural fit:
Cultural fit is the extend to which a person feels comfortable with and/or fits the company’s values, beliefs and working methods.
The hard thing here is that both job fit and cultural fit is not only different for each team/positions, but also develops during different growth stages.
Stage A: Up to 10 people (Low-Low)
In this stage assessing fit is based on gut feeling. Most of the jobs you’re hiring for are new to your company, so there’s no option to benchmark your current team to analyse the required skills to fit the job and required personality traits to fit the culture (if you even have a culture already with this amount of team members).
Stage B: 10–25 people (Medium-High)
You have probably found your product-market fit and are now ready to scale your company. Moreover, according to a study into scaleup cultures, this is also the point where you have created the fundament of your company culture.In this stage the team feels like a family, so hiring for cultural fit is quite ‘easy’ for you. Besides you’ve now hired some key roles, meaning that you have a better understanding of how skills could indicate job fit.
Stage C: 25–50 people (High-Medium)
With a team of 25 people you will probably have most HR processes more clearly structured. You’ve learned from some previous hiring mistakes and you’re now able to properly benchmark your team to be able to analyse the current skill set, desired skill set and the key personality traits that indicate your company culture.Assessing job fit will now get ‘much’ more easy for you since you’ve had some time to practice and access to data required to analyse your successfulness rate so far. Cultural fit, however, will now become slightly more challenging, because this is the stage where you as a founder don’t know anything about all your employees. It’s more of a village now than a family.
Stage D: 50–150 people (Medium-Low)
50 people means that there’s a need for structure and also restructure. When reaching this stage your company will need to find a better balance between hyper growth and sustainable growth, which means that roles will change, new roles will be added to the team and new structures lead to different types of interaction (which leads to some cultural changes).In other words: You’re now in a transition stage, which makes benchmarking harder and the historical data insufficient.
Stage E: More than 150 people (Medium-Medium)
If your company made it to this stage, you’re a rockstar. You’ve survived the most challenging growth pains. Hopefully this also results into the fact that Employee Turnover is low and team performances are getting better and better.To summarise, you will experience that the ability to successfully predict a candidate’s fit will fluctuate during your company’s different growth stages.
Team Heterogeneity: The power of Benchmarking
I know that hiring for fit sounds like the #1 hiring goal. One thing you shouldn’t forget however on the way is that hiring for fit also causes for some danger, namely The Copy Paste Effect. This means that you’re keep hiring people who fit the skill set and personality traits proven to be successful in your team. The danger of this is that you will build a homogeneous team on the long run instead of a heterogeneous team, which will put your level of innovation and creativity on hold. Ouch.
To prevent yourself from building a low fit, homogeneous team, we firmly believe in the power of benchmarking. This process of benchmarking contains two different steps:
- Internal Benchmarking. Measuring your team’s current skill sets and personality traits.
- Industry Benchmarking. Comparing your team with similar teams in similar companies (in similar industries) to create an overview of the missing skills and personality traits.
When analysing your team this way, you will be able to measure both fit and chances for heterogeneity.
Hiring Success as a formula for Scalable Hiring
So that’s Hiring Success: building a high fit, heterogeneous team. Now I can hear you think: ”The story started with the term Scalable Hiring, right?”.Yes, you’re completely right! Scalable Hiring is the last step to solve the hiring puzzle.
This is our definition of Scalable Hiring:
Scalable Hiring is the state in which a company is able to ensure long-term Hiring Success by successfully predicting a candidate’s contribution to the three dimensions of Hiring Success.
So that’s why Fleur and I started Equalture two years ago: To help companies become and stay sustainable through Scalable Hiring. Ready to rumble?”