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How to Secure and Retain Top Talent, Part 1

Every hire at a start-up is important, but the first few hires are the most crucial. The first few hires, after the co-founders, will help define the culture at the start-up, as well as augment the skills of the co-founders. So how do you make the right hiring decisions and get (and retain) the best talent without 10 years of experience as an HR manager or any of the advantages of an established company?

Location, Location, Location

Creating a start-up in certain locations will be advantageous in attracting and retaining top talent. Locating your start-up near where the top talent goes to college, such as Boston/Cambridge and Palo Alto (among others), makes it easier to recruit that young talent prior to graduation. Many students who enjoyed their college experience look positively on the opportunity to stay in the same general area.

In addition to locating near talent-rich universities, locating in areas with a strong start-up scene, such as Austin, Texas and Seattle, Washington (among others), also makes it easy to attract top talent. Everybody likes to hang out with people similar to them. Top Talent generally wants to be surrounded by other top talent in an environment that encourages and meets the needs of start-ups and their employees. Locating in one of these areas will increase the size and quality of the talent pool you have to choose from, including talent right out of college and more experienced talent. If you’re paying attention, you probably realized universities like Harvard, MIT and Stanford (among others) that produce large volumes of top talent (especially top tech industry talent), are frequently located in or near areas with a strong start-up scene, like Boston/Cambridge and Silicon Valley. It’s not a coincidence.

Choosing not to locate near a talent-rich university or in an area with a strong start-up scene isn’t a death sentence for a venture, it just means you’re fighting against the current when it comes to securing and retaining top talent.

Money Talks…

You don’t have the financial resources you need to attract the top talent. Google, Facebook, and others are offering 6 figure salaries to developers. Most early stage start-ups can’t match that figure, especially before getting funded. One solution is to offer potential employees an equity stake in the company, but that doesn’t always work. Finding talent that believes in the mission of your start-up is often more effective in landing that talent than trying to fight the big players in your industry directly on compensations.

Now that you know how to attract talent, how do you make sure top talent is right for you?

Culture Matters

Not the guy you want as your HR Manager when it comes to picking a cultural fit

Talent is important. That goes without saying. But a potential employee must be a good cultural fit for the company as well as a talented individual. The fewer employees in a company, the more each one impacts the work environment and company culture. In addition, to the immediate impact a new hire has on a very small start-up’s company culture, you hope the early hires will stay with the company long term and eventually become the elder statesmen/senior executives in the future. That gives these individuals an outsized impact on company culture, so be careful!! Don’t rush to snatch up top talent without first considering his/her impact on company culture because it could easily have an impact on both your ability to attract talent in your next round of hiring, as well as the direction and feel of your company in the long run.

Get Help

You can’t afford an HR manager or a recruiting firm this early in your company’s lifecycle. That doesn’t mean you’re on an island when it comes to getting help with the interview process. Last week we told you how to Score a High Profile Mentor. Whether your mentor is high profile or not, you should find a mentor with experience in the start-up world, especially if this is your first venture. Don’t be shy about inviting that mentor to sit with you as you interview potential employees. The mentor can help ask the interviewee important questions that you may not have known to ask. The mentor can also provide both quantitative and qualitative (or gut feeling) reviews of the interviewee, providing you with a more experienced perspective on the scary task of hiring the right person.

Last Resort

As a last resort, or sometimes as a first choice, offer to hire a strong candidate on a contract (temp to perm) basis. This has several advantages. First, you can watch the person work and take note of their work habits. In addition, you can see the quality of their work first hand and how long it took to produce that work. Second, you can see how well the person’s personality and temperament fits with rest of the office, or how strong the culture fit is. Initially, it may take a month or so to figure out if an employee is a good fit for your start-up. Eventually, as you hire more employees, it will take less and less time to determine whether or not to make a permanent offer to an employee who starts out as a temp. There are many start-ups that exclusively hire this way, although you may not need or want to use a temp to perm model for every employee.

We’ll write more on hiring issues next week.

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