8 Common Hiring Mistakes Startups Make and How to Avoid Them

Startups can be exhilarating, exciting, and highly rewarding, but they are also hard work and the odds are long. According to the Bureau of Labor Statistics, just 20% of startups fail to make it past their first anniversary and about half fail by year five. The Harvard Business Review says that more than two-thirds never deliver positive returns.

Hiring mistakes aren’t the only reason startups fail to succeed, but they play a significant role. Here are eight of the most common errors companies make when hiring for startups and how to overcome them.

1. Hiring by Resume, Not Experience

Experience will be a determining factor in success, but it requires the right kind of experience. While interviewers will want to examine a resume and a candidate’s background, it’s more important that they have the experience startups need. Just because someone has a degree or worked somewhere else, it doesn’t mean they can hit the ground running.

Another hiring mistake startups often make is hiring for a particular skill. While that skill may be essential, they must have a depth of experience beyond that skill as well. Employees must be able to juggle multiple roles and responsibilities within startups.

2. Ignoring Red Flags

It’s also easy to ignore the red flags that emerge when talking to candidates, especially if they have the skills the startup needs. It can be tempting to ignore the warning signs that come up and figure it won’t matter if they can get the job done. It does matter.

While companies need to make sure they are treating candidates fairly and without bias, hiring the wrong person can undermine a startup, especially in the early-growth stages.

3. Hiring Within Your Network

When starting a business, it is common for a founder to recruit a few people they know and trust. As companies expand, however, they need to go beyond their personal networks to find qualified workers. Hiring friends and family members can make it difficult when it comes to managing them, especially if it’s not working out.

4. Going Too Big, Too Fast

Many startups want to come out of the gate strong, so they go on hiring sprees even before they are ready. Often, startups are looking to grow in size to show investors that they are serious. Other times, ego proceeds profits.

Hiring for startups should be methodical and aligned with strategic goals. Lean and agile teams have guided some of the world’s best startups.

5. Mismanaging High-Volume Hiring

When it is time to grow, startup hiring often includes bringing on board a large number of employees at the same time. High-volume hiring can be a challenge and hiring mistakes are common.

Prioritize the essential, non-negotiable skills, then look for the right cultural fit. Even when companies need to hire people quickly, they must meet the startup ethos to be successful.

6. Ignoring Cultural Fit

Cultural fit is critical for all hires. Startups often have limited resources when they’re growing, so anyone startups hire has to be willing to do whatever it takes to get the job done. Employees must be OK with having to clean the workplace, go buy supplies, take out the trash, run to the post office, or do anything else that comes up.

Hiring for startups also needs to focus on agile and flexible workers. It’s not uncommon for startups to pivot or change priorities as the company evolves. Startups can’t afford to hire workers who can’t adapt quickly when situations change.

7. Hiding Negative Information

Employees want to work for startup founders that are passionate and driven. However, it’s easy to let passion obscure potential roadblocks. During the interview process, make sure to talk about the upside but also discuss any potential negatives about the job.

Employees need to know the reality of the job. They’ll find out soon enough. If a company hasn’t been honest or neglected to tell them negative information, they may not stick around.

If they need a “perfect environment” to thrive, they aren’t suited for a startup.

8. Waiting for Unicorns

While startups need to find key individuals that will drive the company forward, waiting for that unicorn to walk in the door is not a good idea. If unicorns do exist, they’re exceptionally rare. Don’t postpone hiring for key positions hoping to find this mythical individual that may never emerge.

Hiring for Startups

Finding the right employees is challenging in any environment. For startups, it’s essential. Large companies can overcome hiring mistakes, but hiring the wrong people can slow down or cripple startups before they start to gain momentum.

Avoid these common hiring mistakes and improve the odds of startup success.

Authors

Paul Dughi

Paul Dughi has held executive management positions in the media industry for the past 30 years. He earned his master of business administration degree while working full-time as President of a multistation television group and is the author of two books on marketing and management.