How to set up and run a small business

Leaderboard – Run – People

You are here: Home » Run a Business » People » The Challenges of recruitment for startups

The Challenges of recruitment for startups

June 26, 2018

Challenges new businesses face when hiring staffHiring the right people is vital for the growth of your company. It is likely to go some way in contributing to the development of the business and helping it to become successful.

The task of recruitment varies across different industries depending on their nature. For example, recruitment in hospitality is seasonal and finding the right people can be difficult.

Moreover, recruitment can be even harder for startups, so here we take a look at some of the main challenges facing startups when it comes to looking for people to join their team.

A lack of hiring experience

Most young startups will not have the finance to invest in an HR department to deal with recruitment, which can be a disadvantage.

Having a lack of experience when it comes to hiring people whilst simultaneously juggling the demands of the business when looking for a new employee means that more often than not there isn’t a clear selection procedure in place.

Consequently, it is common for people to be hired on a reference basis but making quick decisions like this means that startups do not have adequate time to test the aptitude of a candidate before deciding to employ them.

Furthermore, recruiting people based on personal networks is not sustainable for a startup in the long term.

For example, as a business grows in size, you may need to hire 5 or 10 people at once and you will find it difficult to apply the same strategy as you had done when the startup was smaller. This is why you should thoroughly plan how you recruit, hire and interview.

However, startups do have one important advantage over bigger, more established companies, in that you are able to hire people far more quickly.

Big companies often take months to go through the whole recruitment process and finalise an offer, whereas as a startup, you will be able to quickly make a decision without having to deal with as many processes and procedures.

The speed with which you can act is something you should be using to your benefit when recruiting.

Company reputation

The reputation of a company is an important factor for jobseekers, which can pose an issue for young startups. Earning a good reputation can take years and so it is very difficult for a new business to build a glowing reputation overnight.

This can make it tricky for startups when it comes to being able to compete with other highly reputable businesses in an industry also looking for people to fill similar roles.

Limited resources

Due to the often-limited resources a startup has, another issue that arises for some startups is feeling that they are unable to recruit the very best for their company as they cannot compete with the market salaries elsewhere, feeling that potential employees will be put off from wanting to work at their startup.

It can therefore be difficult for startups to attract top talent when salary expectations are high, and if a company is not able to give benefits to employees that they could receive elsewhere, such as bonuses, extra holiday time or a company car, things get more challenging.

Standing out from the rest

There are things that you can do to ensure your company stands out from other, bigger companies.

For example, your company could include things such as flexible holiday time, emphasise a collaborative work environment, or include other perks and benefits.

You could also look into the EMI Scheme which allows you to grant certain employees shares in the business in a very tax-efficient way.

The main thing to remember is that whilst your company may not necessarily be able to offer huge starting salaries, there a number of other ways you can offer perks to candidates, it will just require you to be creative in terms of what will make people want to choose your business over others.

For example, offering a fun workplace and quirky features such as standing desks can help catch candidates’ attention.

Finding like-minded individuals

One challenge that frequently arises for startups is the problem of trying to find like-minded individuals who share their vision and are able to be loyal and dedicated to the brand whilst not necessarily receiving instant gratification as the company is in the early stages of developing and growing.

Lack of visibility

Another issue that can crop up with recruiting for startups is that they do not advertise well enough the position that they have available, meaning that fewer good candidates come forward purely due to not knowing that the startup was accepting applications.

This can be due to a number of reasons, one of which includes not having the funds to advertise, but it can also come down to not using social media channels to promote vacant positions. Social media is a fantastic free bit of marketing for startups, and important when it comes to networking too.

More help from ByteStart

ByteStart is packed with help on all aspects of starting and running your own successful business, some other popular guides include;

Starting Up

Employing staff

Motivating your team