In the first quarter of the year you will see us focus our thinking around an area of growth that we are ourselves in at Sprout. Entitled ‘Two years in’, our team will explore topics that businesses are likely to come across at this stage of growth.
Moving from hiring mates, to people outside your network
In New Zealand, we are super connected. It’s scary how we can meet someone new and then find 2-3 degrees of separation within minutes.
The great thing is that when we start a business, we usually have an idea of who we’d like to get on board for our first few hires.
Regardless of whether you know them or not, first, you need to consider, do you need to hire someone full time, or could it be part-time work? Could you outsource the work, or consider using consultants? What exactly is the role and how will that fit into the broader organisation?
Mates you want to work with
There are pros and cons around working with people you have previously. The obvious advantage is trust. This can only truly be built up over a period of time and it also means you have an understanding of each other’s strengths and weaknesses.
Our advice here is to avoid complacency in the hiring process. We see three steps to consider in hiring people you know:
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Decide on the role your business needs before the person. Then assess them against that role.
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Ensure you do checks and assessments relevant to the role, just as you would for someone you don’t know.
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Set clear expectations around what is expected through a job description - don’t just assume they’ll ‘get what you need’.
Most importantly, openly discuss a scenario where it doesn’t work out. What if they don’t perform in the role? How will you work through this with them and balance their friendship with the success of the business? You should also encourage them to give you feedback if you’re not performing as a leader.
As part of our offering at Sprout, we often meet with people as part of the initial vetting process. A third party view is always useful, but especially when you are looking at adding friends or family to the business. It gives an impartial perspective and generally simplifies the process.
Hiring people who aren’t mates (yet!)
At Sprout, we have found that on average when businesses get to eight people, that’s when they look beyond their immediate network of people they know. This is usually the point where you’ve run out of mates that you “want” to work with!
The key difference now is that the ‘trust factor’ simply isn’t there. My personal opinion is through the hiring process you should feel at a minimum 80% confident that they are a great hire. Then from day one, the fastest way to accelerate the building of trust is simply to show that you trust them.
Unsurprisingly, the background checking, setting clear expectations, an accurate job description and discussing how you’ll work together are all still crucial when hiring those that aren’t mates.
However, putting in the time in the early days to really get to know the person, what motivates and drives them and what else is going on in their world are also essential parts of the onboarding process.
What’s important is to make your new team members feel like part of the crew. As you don’t have the same history with them, make sure they feel included and ensure they feel like they belong.
Take care in hiring
The cost of making a mistake in hiring is estimated to be between 75-150% of the salary of the individual. Hiring people into your team is part art, part science and of course you’re not going to get it right every time.
However, put the effort in upfront. It often baffles me how much attention a company spends on a new laptop, phone or photocopier, but this isn’t always the case with human recruitment.
Let’s use the photocopier as an example. It might cost considerably less per month than employing someone, yet people agonise over the decision to select one. We spend time thinking about requirements, try out a number of options, do research and ask for product reviews before making a decision.
Yet, when adding a person to your team the process is often considerably less robust. That person will not only cost the business more than the photocopier, they’re also more complex, less predictable and crucially, can do a lot more for the growth of your business!
So consider the photocopier principles when adding to your team:
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What do you actually need (job description and organisation structure)
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Do your research (background checking)
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Screen the different options (interview a quality shortlist)
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Ask for product reviews (reference checking)
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Get your team’s opinion
You may be thinking, yeah, but we need to move fast to secure great people. You are 100% correct, but speed does not mean you can’t be thorough.
Known to you or not, hiring the right people is always connected to the success of the business. Mates or not, take the time upfront in hiring the right person for your company.
Brien Keegan is the founder and managing director of Sprout. If you are interested in talking to him about growing your business through people you can reach Brien on brien@sproutnz.com
