It’s a common problem that just about every fledgling startup comes upon sooner or later: how do you assemble a diverse team of skilled individuals without breaking the bank? With a limited amount of funds in your hands, you need to be strategic about bringing new talent into the fold. Finding the right balance between people who will do the job well and people who will do the job for less competitive salaries can be tricky, but it’s something you need to pull off if you want to achieve success. To learn more about hiring on a startup budget, check out the tips below.
1) Seek out inexpensive talent
Startups stand to benefit a great deal by offering internships. The labour market is saturated with young, inexperienced individuals looking for an opportunity to develop skills and prove themselves. This is especially true for startups located in cities where there are colleges and universities, which offer a wealth of passionate young individuals with the ability to learn the ropes of the startup world. In many cases, these people are willing to work on an unpaid basis. For more information on hiring and managing interns, check out this helpful article from Inc. Magazine.
2) Consider hiring friends
It might sound like a disaster in the works, but it’s fairly common for founders of early-stage startups to bring their friends onboard right off the bat, especially if they’re looking to hire fast. Friends are people whose personalities and skills you already know, giving you a stronger sense of where they might fit into your organizational culture, which bypasses the need for a time-consuming hiring and vetting process. Also, if these are people who’ve been following your business idea from its inception, you might have already infected them with your passion—which increases the likelihood they'll be amenable to a lower salary at the beginning. If you’re afraid of the potential pitfalls that can arise when hiring friends, check out this informative piece from Entrepreneur Magazine.
3) Offer desirable equity options
If you can’t offer very much money, there’s always another option: equity. By supplementing less competitive salaries with stock options, you might be able to persuade new talent to join your startup team. For your typical new hire, a quarter-point of stock should be sufficient. If they’re the kind of uniquely talented individual your company needs to flourish, going up to a half-point or even a little more might prove beneficial. Ultimately, it’s up to you to figure out how much the employee is worth and make your offer accordingly.
4) Settle for the right people
When you don’t have very much to offer, it’s just a reality that you might have to settle for individuals with modest talent—but that doesn’t mean they won’t be a good fit. When the talent pool is shallow, hire the candidates who will bring the greatest amount of motivation and enthusiasm to your organization. These are the people who will go the extra mile for your team and will be more likely to stay on with you for the long-term. If you’re concerned about wanting to thoroughly vet your talent, hiring for a finite probation period can help you determine which employees are more likely to maintain their enthusiasm into the future.
For more information about hiring employees, check out these articles from Entrepreneur Magazine and this piece from Small Business BC. MaRS Discovery District also has some useful HR workbooks.