Why your hiring strategy needs to change as you go from start-up to SME
Needing to recruit staff is always a positive sign that a business is growing and doing well. However, there are certain things that need to be considered, especially for those making the transition from start-up to SME.

Recruitment can be an expensive exercise for any business and according to Senior Account Manager with SEEK Business, Dennis Midgley, it costs around $75,000NZD to bring on a new employee and conduct a comprehensive induction. “You need to take the time to find the right person so that in three months you’re not going through the recruitment process again,” says Midgley.

Start-ups and SMEs have very different recruitment phases, says Midgley. Therefore, it’s important to tailor hiring strategies to the current needs and future growth of the business.

Recruiting for start-ups

“It’s harder for start-ups to recruit because they need to find that unique person who can hit the ground running without going through a lengthy induction process that will slow the growth of the business,” says Midgley. His advice? For start-ups to spend time identifying the attributes they want in an employee and not to compromise. “Be clear on who you are looking for and what they’ll be doing day-to-day,” says Midgley.

Start-ups can then evolve as the business grows. “As a business expands, new roles become available and existing roles become larger,” he says. “You need to invest time into making sure you are employing people with fresh eyes and minds who can contribute to the growth of your business.”

Transitioning to a SME

“There is less risk in recruitment for small businesses because you often have the ability to recruit from within,” says Midgley. The benefit of this means when businesses are ready to recruit externally, candidates can see there is an internal progression structure. “This gives you more credibility.

“External candidates can see that you sometimes do recruit from within and that helps with culture-building.”

“Employ well – don’t employ fast”

Neil Roberts is the CEO of Harmoney, which started in 2013 with a team of five people. It is now the largest and fastest growing peer-to-peer lending marketplace in New Zealand. Roberts says it’s vital to take the time to employ not just for skill, but also for attitude. “A person’s attitude in a fast-paced organisation is the key to success,” he says. “You need someone who is not afraid to muck in, join a project team and lead a discussion. Employ well – don’t employ fast.”

“Above all, start-ups are personal,” says Roberts. “It is not like a corporate. All of the things you do in a day can have a huge impact and it’s hard not to take it personally. Resilience and empathy are must-haves to enable a strong culture.”

“As we have grown we have put in systems and processes. Now we are much more planned, strategic and effective with our sourcing strategies.”

Hipages was founded in 2004 by two friends in a garage and now has a team of 250 in both Sydney and Manila. The online marketplace connects proven and trusted local trade professionals with customers, and Chief People Officer, Jodette Cleary, can see a huge difference in how Hipages’ hiring strategy has changed over the past 12 years.

“In the early days, things were moving so fast we often went to market for a role when we were already desperate for more resources,” she says. “This sometimes meant we didn’t make the right selection decisions.”

“As we have grown, we have put in systems and processes. Now we are much more planned, strategic and effective with our sourcing strategies,” says Cleary. The key learning has been to scope roles, define what success looks like for each role, use sourcing technology effectively and to be relentless, only hiring for cultural fit, no matter how desperate we are for the skills.” says Cleary.

Although Hipages is no longer a start-up, it still has that personal touch. “For those candidates who have attended interviews but are unsuccessful we send them a thank you card together with two movie tickets,” says Cleary. “I am dismayed not many companies speak with candidates and give them feedback on why they were not successful. I am very proud we do this and receive numerous emails from candidates thanking us for this simple act of respect.”

3 recruitment tips as you transition from start-up to SME

  • Look for high performers who are optimistic, unafraid to work hard and lateral thinkers to suit the start-up culture as it moves into a growth phase.

  • Employ well – don’t employ fast. Take the time to get the right person with the right fit and the right attitude.

  • Plan for growth – define what success looks like and have clear expectations of employee attributes, roles and responsibilities.