Hiring Pitfalls

Summary: I’m confident that I could fill this page many times over with the sheer volume of different insights, experiences and scar tissue I’ve gained through hiring. Here are a few to get going.

Hiring for today or tomorrow?

Hiring is hard, full stop. But hiring into a business that’s in a constant state of flux and change is crazy hard since it requires you to carefully balance the need to put out today’s fires while anticipating what you’ll

need tomorrow. Getting this balance wrong can be the source of much angst and will probably slow everything down.

Unfortunately, getting it right is easier said than done because today’s problems are tangible, they’re real, and they’re probably piling up in your inbox right now, so you’re living with them daily. You might even be losing sleep over them.

Tomorrow’s problems really don’t seem like problems at all, and if they are, then they’re the good kind of problems to have — they’re non-specific, they’re conceptual or abstract, and more importantly, they’re not here yet.

To make matters worse, the degree of difficulty and risk associated with hiring is multiplied when you’re filling a people manager role, where the organisational impact crater created by a bad hire or promotion is often much greater and potentially damaging not just to progress but also to your culture.

As a rule of thumb, I always tried to hire by anticipating what the role might look like 18 months to 2 years out. Hiring a candidate that’s right for the size of the business today carries the real risk of them tapping too soon after they arrive as their team or function quickly grows beyond their capability or experience. This is not likely to be a great experience for them or the team, never mind the drag on growth it might also create for the business.

Promote from within, or hire from outside?

As you progress from the start-up stages towards becoming a scale-up and beyond, at various points, you will need to hand off responsibility for managing and leading people, teams and functions to others. Tasks and responsibilities that you designed, built and then directly managed will no longer require your involvement in the same way, and so handing them off to others will free you up to take on the necessary and important job of dealing with the next set of growth challenges you’ll encounter.

You’ll also need to be comfortable not being at the coal face as you pass across these responsibilities, which some leaders can struggle with.

Often you may have to choose between promoting an early individual contributor or junior team leader into a new role where they may require a lot of coaching and support from you in order to learn how to manage large teams or functions, or you’ll bring in someone with prior management experience but who won’t know anything about your company. Check that you’re personally up for that commitment, and make sure you have at least a basic understanding of coaching techniques otherwise, you may end up doing the job for them without realising.

Sometimes this isn’t even a conscious decision, particularly in the early stages, where it’s often the case that early team members just pick up or absorb adjacent micro-functions or processes that need to be looked after in the building phase. But eventually, these tasks will need to be discretely and deliberately managed rather than just looked after by a generalist early team member.

Here it’s important to recognise that managing and building teams in a fast-growth context shares little in common with managing teams in large, mature businesses.

And while it may seem plausible that people managers from larger businesses ought to be ideal candidates, they may struggle when dropped into the often chaotic, messy world of building and growing a start-up, and they also may not enjoy having to roll up their sleeves and building the processes and systems they depended upon in their prior roles.

Some may also feel the need to replicate the big company org chart they relied upon to get things done in their previous company, which can result in low-efficiency headcount bloat just when you can’t afford it, nor need it. So, try to avoid hiring big company execs and managers too soon because organ donor rejection is a real risk at this stage.

There are rare exceptions where bringing in big company execs can work out — for example; I came to Xero having only ever managed larger and more mature teams and businesses, but I’m a freak outlier — in most cases, you’ll want to find people who have had direct experience working inside and building a fast-growth business, but these are often the hardest to find.

Looking after old-timers

However you achieve it, bringing in outside hires can sometimes cause early employees to question their role or feel overlooked. The hard reality is that out of the first 10, 20 or 100 people you hire, few will remain with the company forever. But this doesn’t mean they can’t have a valuable role to play as the company grows. Their generalist skills can often be redeployed into new projects or mini-startups within the now larger business. The key is to be open and respectful with early employees, but don’t keep them hanging around if they’re deeply unhappy or feel resentful about being sidelined. They played a critical part in building the business to this stage, which should be celebrated and hopefully, if they were in early, they may also have the cushion of a little equity in the business.

Generalists to specialists

Another pitfall to avoid occurs when you move on from the stage where everyone has needed to generalise and do a little bit of everything, and you need to start hiring specialists, such as someone who can come in and run sales operations.

When recruiting your first specialists, it’s easy to become dazzled by candidates with deep specialist expertise in critical areas you lack as a generalist. You may overlook the other important factors and competencies they also need to bring.

I’m excited by new ideas, so I found it very easy to get so excited by the prospect of all the amazing new processes and capabilities a specialist will bring that I sometimes completely failed to check for the other important qualities and skills they also need, such as people management capability, or being a great team player.

Hiring for diversity

Things move fast in a start-up, so it’s easy for the normal run of play to be a little lastminute.com in nature. But waiting until your hair is on fire before moving to fill important roles can risk storing up problems that might not be obvious straight away.

If circumstances force you to run a short recruitment process and hire the first best candidate you find, then this may not always result in recruiting the most diverse candidate for the role. And left unchecked, this can leave you with a permanent lack of diversity in your culture, which can quickly spiral beyond your control and may be incredibly difficult to remediate later.

Diversity absolutely should be an important factor in hiring, not least since there’s plenty of evidence that diverse teams do better than non-diverse teams. But diversity-friendly hiring processes can come with a time premium that sits out of step with the hustle and urgency often associated with getting stuff done in fast-growth companies.

For example, if ethnic or gender-diverse candidates make up only 15% or less of the likely applicant pool for a given role or specialism, then statistical probability dictates that your recruitment process may need to remain open for a much longer period of time if you’re to avoid always hiring the best candidate from the first batch of likely majority candidates you come across.

Urgent hiring timescales tend not to result in diverse hiring outcomes, and this can be very hard to wrestle with during the early stages of building and growing a start-up when speed is of the essence. It’s tough, but rather than course-correcting for diversity once you’re up and running, I’d advise getting there early — it makes everything much easier.