As small business owners, it’s hard to know just when to hire that first employee. Here’s an article with 7 key items you should consider before making a decision.
7 Keys to Hiring Your Start-up’s First Employee
Hiring your first employee is a huge step for your start-up. In addition to the sudden sense of responsibility (you’re now in charge of someone else’s livelihood!), it’s a strong signal that your company has real merit: Someone has chosen to turn down other opportunities to help make your idea happen. And in many cases, he or she is embracing a significant amount of risk to do so.
But the most fundamental way in which it changes your business is bandwidth. A new person dedicating all of his or her time and focus to the company means that suddenly you get to move faster. A lot faster.
At my company, ReWork, it took over a year to get to the point where we were ready to bring someone else onto the team. We didn’t read any here’s-how-to-hire-someone books, but instead relied upon our observations of other start-up experiences, and advice from our Unreasonable mentors. And after three months, 30 applicants, and a steep learning curve, we were able to find exactly what we were looking for. His name is Shane Rasnak, and he is awesome.
Based on our experience (and that of other founders we’ve talked with), here’s the advice we’d give anyone else in this boat.
1. The Sooner, the Better (If You Can Afford It)
Hire someone as soon as you know that you need them and can afford them, even if it’s tight at first. The extra oomph that another person gives in brainpower, creativity, and sheer legwork is totally worth it. Things that would otherwise take you weeks will be doable in days. Entire work streams will disappear from your to-do list.
In many cases, founders who are reluctant to hire even when it’s clear they’re overworked end up kicking themselves later when they realize how much they weren’t getting done while they delayed. We sacrificed our own pay to make room for Shane, and it was more than worth it.
2. Hire for Potential, Not (Just) Track Record
One key trait of a skilled hiring manager is the ability to see potential, not just evidence of past success. Look for someone who has a strong interest or passion for causes or missions that are similar to yours, and, separately, evidence that the person is really good at what he or she has done before (even if that’s a variety of different things).
Unlocking potential has to do with marrying someone’s skills and passions, so even if a person hasn’t yet found a way to truly unleash herself, if your position can do it for her, you’ll likely see results. We turned down applicants with Master’s degrees and 10 years of experience because we sensed that Shane had immense potential to excel at our company. Also, it was clear that he was interested in punching above his weight.
3. Have Applicants Demonstrate Skill or Aptitude
Many people know exactly how to answer interview questions in a way that instills confidence in a hiring manager. In short, it’s (relatively) easy to bullshit. So, research shows that the best way to vet someone is to have him or her complete a task for you—for example, if you’re hiring a salesperson, ask them to sell you something. We had our applicants create an outreach strategy to reach our target audiences, giving them relatively little direction to see how they would tackle the assignment without guidance. The results were telling, and those that clearly didn’t put the time or energy into making it quality were removed from the running.
4. Have Everyone on the Team Interview the Stars
Finding a cultural fit for your team is tricky. Just because Person A and Person B get along, and Person B and Person C get along, doesn’t mean that Person A and C will get along (let alone work well together). As three co-founders with quite differing personalities and work styles, it was important that each of us would work well with our first hire. So we interviewed him four times, twice after we knew he was our top choice. That may seem excessive, but we needed confidence that he’d fit in well. When each of us felt that we’d have a productive working dynamic with him, we knew we had the right guy.
5. Invite Them, Truly, to be Part of the Team
Once you hire someone, you have a choice: You can consider him an employee, in the sense that you issue him directives, evaluate his work, and compensate him for his time. Or, you can consider him a member of the team that has chosen to dedicate his time to making your vision a reality, including learning alongside you and experiencing the ups and downs of your venture. And the latter is one of the main reasons why people join start-ups in the first place. We made it a point from day one to show Shane that he was part of our team, and that intention has already paid dividends.
6. Design an Onboarding Process
While we did some things right during the hiring process, there are others we would have done differently. For example, the extent of our “official” onboarding for Shane was a two-hour conversation on his first day on the job. Other than that, we tried our best to show our culture and expectations over the course of many smaller conversations. And though the result has been fine, we’d definitely do it differently next time—we would put together a series of sessions ranging from our culture and intent to company history and strategy. At the very least, having all these things spelled out means that everyone who joins the company will have the same experience.
7. Have Your Legal Ducks in a Row
Here’s a bold admission: We didn’t have an employment contract for Shane for the first six months that he was working for us. As a young business, we just hadn’t prioritized our legal documents. Again, though everything has turned out fine, I do not recommend this approach. Not having a contract in place (or terms discussed with advisors and lawyers) meant that both Shane and our team were legally unprotected. Fact is, not all hires work out. And when you’re laser-focused on revenue and market development, the last thing you need is a legal headache. Knowing that everyone is officially taken care of means that you can focus on what matters most.
Your first hire is a huge step in the life of your company. Take the time to do things the right way, and you’ll make sure that your first employee will be there for the long haul—and be one of the greatest things to happen to your company in its early days.