May 6th, 2014

Five workforce factors to consider as your startup grows

Five workforce factors to consider as your startup grows

When it comes to hiring new employees, entrepreneurs at many startups have deep knowledge of their industry but little experience with recruiting and expanding their team. That can make decisions challenging, at best.

For example, a Portland software start-up tried hiring a UX specialist by getting their employees to post the job opening on their social media pages. A recruiter at Volt saw the job on Facebook one week, and the next, and for several weeks after that.

Since the company wasn’t finding the person they needed, the recruiter contacted them and talked to their VP. After learning more about the start-up and their open position, the recruiter suggested that a contingent employee might be a better option than hiring someone directly. The VP admitted he never considered that option because in previous positions, he’d never been directly involved with the hiring process.

If your company is growing, here are a few things you’ll want to think about when it comes to hiring.

1) Define your culture

People aren’t looking for great tasks, they’re looking for a great job, a place where they will enjoy working. Your company needs to define its culture – structured or flexible? Serious or casual? Collaborative or competitive? – and be able to clearly communicate that culture to prospective employees. Hiring the right people keeps turnover low and productivity high, so make sure candidates know what to expect.

2) Figure out a hiring strategy

If you have to hire someone for a project immediately, you are more likely to get “good enough” instead of “great.” As you plan future projects, factor in how you many people you’ll need, the budget for their salaries, and how you will find the specific talent the project requires. The key is gaining access to qualified resumes. If you don’t have that, partnering with a recruiting companies gives you access to their large talent network.

3) Develop a structured process

Establishing effective recruiting, onboarding, and training processes is critical to mitigating risk and getting employees started on the right foot. Learn the labor laws and adhere to them precisely; create a standard interview process so you can consistently compare candidates; decide if you want to invest in background checks or drug screening. A structured process will help your company make better hires in a shorter time.

4) Determine how you want to hire

Hiring in-house employees may be best for roles with steady, long-term workloads. For short-term projects, hiring contingent specialists gives you more flexibility with less administrative effort. Many companies hire Independent Contractors (ICs) for specific development tasks, though make sure you comply with IRS rules about working with ICs. These are all valid ways to build your team – the best way depends on the role.

5) Know the true cost of an employee

Salary is just one element of the costs associated with an employee. The Bureau of Labor Statistics estimates that employer overhead for a new hire in the first year averages 43% of that employee’s salary, including recruiting costs (internal or external), employee benefits, training time (for both the employee and the trainer), state and federal payroll taxes, and more.

Hiring the wrong people can have a negative impact on both productivity and morale, and hiring them the wrong way can make it a harder problem to solve. The more you know about hiring, the more you’ll see how hiring not just the right person but the right type of employee is essential to growing your business.

If you have any questions about best practices for recruiting, feel free to contact me at I specialize in helping Portland tech companies build a great workforce.

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