5 Ways to Save Money on Your Hiring Strategy Now

September 3, 2013

11:00 am

Ask your average corporate recruiter, and they’ll scoff at startups having trouble hiring great talent. But what they don’t realize is the numerous obstacles that face growing companies when it comes to hiring the best people.

Startups are burdened by a lack of time to devote to the hiring process. And in many cities, they often have trouble finding highly skilled technical talent willing to take a risk and join a startup – even one with incredible potential.

Plus, it’s really hard to compete against big, local brands offering higher pay, fewer hours, and better benefits. And technical talent often prefer the flexibility of freelance roles where they can manage time, costs, and the type of projects they work on.

Startups often turn to headhunters in desperation. But there’s one problem: headhunters cost an arm and a leg. Specifically 15-30 percent+ of the new hire’s salary. For a developer, that can run more than $10,000 or more based on the level and the city. Plus they aren’t always looking out for the startup’s best interests. They want to make the placement and get the cash. They’re not incented to care about long-term fit or performance.

Instead of passing the buck and sucking up the contingency fees, there are cheaper and easier ways to find the talent you need:

1. Hire an internal recruiter or two

If you’re going to hire at least two people in the next 12 months, it’s a worthwhile investment based on what you’ll spend for a headhunter. It takes the burden of managing the process off of the leadership team, and the recruiters can also begin to help you manage the team and growth.

2. Use sourcing tools and searches

Forget expensive job boards. Use your current developers to use unique search strings and do some advanced online searching for candidates you wouldn’t find otherwise. For example, one of Facebook’s best engineers came from a small, no-name web shop in Maine who wouldn’t have been found locally.

Or, make a small investment in a tool like RemarkableHire that combs niche tech sites like StackOverflow and Dribbble to find actual evidence of performance and tech knowledge rather than the self-professed Hadoop expert you find on LinkedIn.

3. Get the whole team involved

This isn’t an employee referral contest. Require team members to participate in the search for every new hire and offer up three candidates for each open position. In a startup, sometimes it’s all hands on deck, and hiring is no exception. It will help everyone become involved in what matters to the team, and they’ll help create better networks of talent you can tap into in the future.

4. Look outside your zip code and sell your city

It’s not that there’s a nationwide skills gap, but there is one in your city. As you’re searching for and attracting talent, consider bringing in talent from other cities. The cost of relocation will still be cheaper than a headhunter. That said, you’ll have to sell the virtues of your city compared to bigger startup scenes like Silicon Valley and New York. Focus on cost-of-living and unique attributes of your locale.

5. Be ridiculously honest

You won’t get great talent by spinning a fantastic tale. You’ll piss off new hires during month one when they realize the honeymoon is over. Instead, be honest up front and reinforce that you’re being honest compared to other companies. You’ll get major points for not trying to put lipstick on a pig. If candidates know what sucks about working for you and they still want to, then score.

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Susan Strayer LaMotte is the founder of exaqueo. She helps startup and high-growth companies develop cultures, build employer brands, and create talent strategies to help scale and grow businesses. Follow her @SusanLaMotte.

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