As a startup, you have the opportunity to build your team out from square one. Square one is you. Each person you add to your team either strengthens your core leadership unit and, in turn, your business. Or it weakens your business from the inside out.
But the modern hiring landscape as we approach 2020 isn’t a rosy one. 44% of employers are currently trying to hire full-time employees. 45% currently have jobs they can’t fill. Nearly 60% say that most job openings stay open for over 3 months. They’re struggling to find the right people.
This demonstrates just one reason it’s essential that a startup has a system to hire well. Let’s explore 5 more compelling reasons hiring is such a critical element for startup success.
1. It’s the Framework for Success
Shannon Sharper, Google’s Hiring Effectiveness Manager had this to say: “Hiring is the most important thing you do…If you invest in the right people, you have to invest a lot less in later processes.”
It all starts with your employees, more specifically, those in leadership. It doesn’t matter how much you spend on marketing and product development. It’s unimportant that you’re committed to your customers. You could bring in the top business consulting firm in the world to streamline every process and maximize efficiency.
If you’re not building a firm foundation with the right people, nothing else matters. Every initiative will cost you more with a reduced return on investment.
2. Right Team Members Make You Money
You know the basic human capital principle. In order for a business to succeed, employees must add value to the organization that exceeds their compensation packages. The higher up that employee is in leadership, the greater this “return on investment” must be.
What they do ripples throughout the organization, determining how effective the tiers of employees beneath them can be. While hard to measure, making poor hiring decisions costs businesses astronomically in the form of lost productivity.
70% of employees in an average company aren’t engaged. Around 5% of employees deliver 95% of this value. Stats like these remind us that hiring people who add value to the organization isn’t easy. It takes work.
Understanding how important hiring is is the first critical step toward making the best hiring decisions for your startup.
3. Investors Invest in People
Investors don’t care about how great your business idea is if they don’t feel that you have the people behind it. Ideas are just ideas. But the right people get things done.
They adapt to changing market conditions. They evaluate risk, forecast and plan for growth.
Even if you’ve secured Series A funding, chances are that you’ll be going through many rounds of funding as you grow. Investors see having a strong team with a growth mentality, innovative mindset and can-do attitude as an asset.
It increases the valuation of your company now, reducing the equity you give up to an investor.
4. A Reputation Can Last a Lifetime
As a startup, you have a proof of concept. But you’re still unknown on a larger scale. This leaves the gate’s wide open for people to develop an opinion of you early on.
Whether “justified” or not, a bad reputation will haunt you for years to come. Inversely, developing a great reputation early will follow you, making everything easier from hiring to marketing to finding a new wholesaler.
When you hire a high-octane team of people, they not only know how to prevent public relations nightmares and bad online reviews. In the event that you hit a bump in the supply chain, production or marketing, the right people know how to manage events, minimizing impact and obtaining the best possible outcome.
5. Quality Employees Are a Magnet
When you have a dedicated, productive, creative team of people already working with you, more people want to become a part of your culture. Employees are happier and more productive overall.
People enjoy coming to work and being around other people who they know care about them, the company, their role and the customers.
A study reported in the Harvard Business Review showed that people who are happy at work are 31% more productive. Salespeople sell 37% more. Job accuracy goes up by 19%. There’s less turnover along with the costs associated with filling vacant positions.
This kind of workplace attracts more people who appreciate the healthy work environment.
Top employees want to stay in a supportive, productive work environment. Those who don’t fit in because they just like to “get by” will look for other work. Like all magnets, it will push away people who aren’t compatible with a successful business workplace.
Build Your Premier Executive Team from Square One
It all starts with you. You’re square one as the founder of this company. The team you build around you will shape the course of your company. Hiring quality employees, starting with leadership, is the framework for your success. Billion dollar investors understand the value of the right people.
You do too.
When you hire the right people, you create a magnet that attracts more productive people. This spells success for your business.