Employees are valuable assets of companies of any size, especially for startups. As startup companies are still in their early stages, they need to race against time to grow with limited resources, including limited human resources.

Since startups generally do not have an HR Department or an individual, who has expertise in the field of recruitment, they generally rely on reference with inadequate recruitment methods. Startups easily hire people, but they likewise very easily lose employees.

There is no definite figure regarding the turnover rate of startup companies in general. However, high turnover talent in startups is very common.

Gambling can be fun, yet dangerous

With an inadequate recruitment method, startups are kind of gambling in recruiting employees. Gambling can be fun when startups are lucky enough to sign the contract with the right and fit candidate in one straight shot.

Yet, it can be dangerous the other way around. Losing productivity and time is a big setback. One resignation of an employee can affect the whole workflow and can even disarray the company’s plans and objectives.

Inadequate recruitment process can even potentially damage the reputation of the company when a former employee resigned in an unfavorable way and has negative and bias opinions towards the latter. The negative opinion can certainly affect others perception about the company. Bad reputation costs way too much even for established companies, let alone for startups.

What to look for from a candidate?

Ganesh Krishnan is an entrepreneur and investor, who has worked with more than 15 startups. He, as Livemint quoted, said that the first 10 recruitments are crucial to a startup because the initial team determines the tone and culture of the company.

Krishnan also said that a startup should pay attention to the candidate’s characters, whether they have experience as risk takers, fast risers in their career, and their ability to take more responsibility of work. Those characters may be needed by a startup to be able to ‘run’ fast.

In addition, startups should also determine on whether they will need experienced or talented employees. The experienced candidates are like a well-established oil rig that can be expected to produce a number of barrels every day. Startups can determine the appropriate KPI based on the employees’ capacities. Meanwhile, the talented candidates are like a virgin land, which consist of raw and unreached gold. However, startups still need to observe their skills.

So, should the startup recruit formally?

When the co-founder and CEO of Log 9 Materials, Akshay Singhal needed a senior researcher, he subsequently recruited an individual on the recommendation of the head of development. There was no formal interview to check the background of the right candidate for the position. A team member vouched that the individual’s skills met the company’s needs. Exactly 22 days after being recruited, the senior researcher was fired for being indiscreet about the confidentiality of company information. Since then, Singhal only recruits through a formal process.

Perhaps, many startups experience similar things as Log 9 Materials. It turns out that skill is not enough, attitude and tracking records are also some essential elements, which can only be validated by a thorough recruitment process. Therefore, it is very important for startups to have a formal recruitment policy at a very early stage.

Sources:

https://www.nngroup.com/articles/negativity-bias-ux/

http://www.livemint.com/Leisure/D7V6oAOzYU2Hkmg26WAqdL/Why-startups-need-a-recruitment-process.html

http://blog.mcquaig.com/startups-bad-hires