4 Hiring Challenges Every Startup Will Face

Ready to hire new employees? Here are some of the biggest hurdles you will face to make your first hire and steps you can take to overcome them.

Even for well-established companies, the hiring process can be a hassle. Hours spent poring over resumes and interviewing strangers (most of whom will never be hired) is a time-consuming process that diminishes productivity.

Once you find the right candidate, you must still complete employee training and an onboarding process. Let’s just say that it’s not surprising that the Society for Human Resources Management estimates the “average cost-per-hire is $4,129, while the average time it takes to fill a given position is 42 days.”

For startups, the hiring process is even more complicated. Here are some of the biggest hurdles you will face to make your first hire and steps you can take to overcome them.


1. Undefined hiring policies and processes

Even though most businesses face challenges and hassles during the hiring process, those problems are minimized by the presence of pre-defined background check policies, company culture hallmarks, documented interview processes, and more. As a new company, you may not have a proven hiring process to fall back on when it’s time to recruit.


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The Solution: Sit down and sketch out a policy.

Before you hire anyone—preferably before you even post a job listing—sit down and create a hiring policy.


  • What kind of employees do you need?

  • What do you envision for your company culture?

  • Which skills do you need to bring to the table?

  • How in-depth will background checks be?

  • Will you include verification checks for education, professional certification, and work history, or will you focus largely on criminal records?

  • Will new hires be required to sign a Non-compete Agreement or a Confidentiality Agreement, depending on the position?

  • What will your interview process look like?


You should answer these questions before you hire a single employee. Once your policy is in place, you can create specific job descriptions for open positions, which will help you identify the right candidate during the interview process.


2. Small job applicant pool

For some professionals—particularly young people right out of college—the idea of working at a startup to build something new is incredibly exciting. However, working for a startup also involves a fair amount of baggage.


Hiring new employees
Photo: © ty, YFS Magazine

Generally speaking, startups are cash-strapped ventures that are funneling a majority of profit back into the company. As a result, the luxury of offering high salaries, great benefits, or a strong work-life balance is slim to none.


The Solution: Offer employee perks that don’t involve money.

If you expect your team to work longer hours for less money, you have to make it worth their while. Equity in the company is an obvious tactic, but one that some entrepreneurs are reluctant to use. Even without signing away a percentage of the business, you still have a flexibility that other employers don’t.

Let employees work from home; offer flexible work hours; and create a culture that is fun and vibrant instead of stuffy and dull. Young professionals will flock to jobs that offer these perks—especially if you can offer high-level positions and work experiences that they aren’t going to be able to get at bigger and more established companies.


3. No resources for a long recruitment process

Even for large companies, the hiring process hurts productivity by pulling team members away from their day-to-day work to conduct interviews. In a startup environment, this kind of productivity loss is even more problematic, because you have a very small number of people on your team.


Photo: © Andriy Bezuglov, YFS Magazine

Pulling a team member away from his or her core job can have a profound impact on daily operations. Even after you hire someone, it can still take weeks or months for a new hire to reach full productivity.


The Solution: Find a balance between fast processes and finding the perfect hire.

Startups face a constant hiring dilemma. Do you rush through the hiring process to avoid productivity loss, or do you let the process stretch on until you find the perfect hire?

To be successful, you have to strike a balance between the two extremes. Use all the resources at your disposal—background checks, well-defined job descriptions, a firm idea of what you want your company culture to be, etc.—to work toward the perfect fit.

Consider setting a deadline to fill each position. This balance, along with thorough employee screening, will help you to make a strong hire without wasting too much time or money.


4. Acclimating new hires for a startup environment

Startups create notoriously fast-paced work environments. The typical job at a startup involves high levels of responsibility, innovative ideas, consistent teamwork, and independence. Not every person is ready for the pressures of the work, which can lead to long adjustment periods and less-than-superb performance for the first few months.


Hiring Mistakes That First-Time Entrepreneurs Make
Photo: © djolerad, YFS Magazine


The Solution: Look for people who have startup experience.

Find employees who can hit the ground running. This often means hiring someone who has experience working in a similar environment. You’ll need a team that can handle the fast-paced environment of a business that is constantly evolving.


Hiring the perfect employee is more difficult for startups than established businesses. By considering all the angles and being aware of the challenges and solutions listed above, you should be able to start building a vibrant and hard-working team without making too many blunders along the way.


This article has been edited.

Michael Klazema has been developing products for criminal background check and improving online customer experiences in the background screening industry since 2009. He is the lead author and editor for Backgroundchecks.com. He lives in Dallas, TX with his family and enjoys the rich culinary histories of various old and new world countries. Connect with @BackgroundBiz on Twitter.


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