Three common mistakes to avoid when hiring your first few team members

It’s widely accepted that having the right team is one of the most important factors for start-up success.


But many cash-constrained and time-poor start-ups can struggle to make the best hiring decisions.


Julie Seletto, co-founder and operational director of recruitment firm Seed Talent, says start-ups usually only hire when they have to, when the stress of massive workloads really begins to wear on them.


“It’s absolutely key that you don’t wait until your business is under pressure or you’re in desperate need to hire someone,” Seletto says. “The key thing in establishing a business is staying true to your culture and brand. So always be looking to hire for the right talent, don’t leave it until you need them.”


She shared the top three first hire mistakes start-up founders make and how to avoid them with StartupSmart.


Take the time to realise your own skills gaps


Before you even start flicking through CVs or composing job ads, founders need to take the time to work out exactly what skills their team will need to reach their growth goals.


“The main hiring mistake we see all the time is failing to take the time to understand what you as a founder need. Often start-ups get excited and carried away and want to grow the business quickly, so hire on a whim,” Seletto says.


But companies that take the time to recognise what skills they need but don’t yet have, and approach recruitment at least partly as a skills acquisition process, will rarely regret the time investment, says Seletto.


“As a director, you need to push your ego to the side and realise what skills you have to get the business where you want it to get to, and what gaps you have. Because first and foremost you need to attract people to provide or fill those gaps,” she says.


Don’t scrimp on costs for first hires, but be smart about how you structure the salary


Often start-ups choose to economise on early hires because they have no other option, but Seletto says being willing to pay more for your first few hires is a wise decision.


“Too many start-ups sacrifice quality for costs. But getting the right people on board early is crucial, so you probably want to invest more in your first few hires so you’ve got excellent people to help build the culture,” Seletto says.


As outsourcing continues to flourish, Seletto says more and more first hires for start-ups are growth and marketing team members so you can offer a lower base strategy with ample performance incentives.


“Figure out what you want to achieve from each hire and structure each package flexibly around that. Try to structure packages so they can earn more, but emphasise the ‘earn’ part: attach it to targets with a lower base salary supported by lots of short and long term incentives,” Seletto says, adding profit sharing or equity options are good incentives to attract entrepreneurial types to your team.


Set really clear targets and don’t be afraid to move people on


Many start-ups hire organically, from their own networks or via social media. Seletto says this means it’s especially important to have really clear targets and goals for the new hire, and be willing to move them on if they aren’t performing.


“In reality, if you hire someone and it’s not working out, you can finish them up quickly. But to avoid having to do that, you need really clearly defined goals, targets and expectations. You also need to coach those you’ve invested in to give them and you their best shot at success,” Seletto says.


By having clear goals and regularly following up with new hires, you can make sure you have similar expectations and touchstones to discuss their performance against.


She adds networking and attending events is critical for savvy start-up founders on the hunt for excellent talent.


“For start-ups, they join you at the early stages, not the business. So get out there, get to know people and leverage your reputation,” Seletto says. “When you don’t have an established brand you need to sell your vision and story. Start-up directors should always do the hiring in the early stages because they’re the business.”


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