Startups

Startups – When to Hire and Fire (and What To Do if They Quit)

Startup hiring

This guest column is by Marjorie Mae Mendoza, freelance writer & blogger at iPrice

With the further expansion of the Internet age, more and more people are becoming entrepreneurs, cashing in on their million-dollar-idea and other gimmicks to win the unpredictable and elusive hearts of customers. The slow current of business has become a stream, eventually becoming a tidal wave that promises success and profit. This fast-paced environment created younger, more-daring, and oftentimes less-experienced entrepreneurs that trodded away from the politics of hiring, firing, and dealing with office resignation. Welcoming a newcomer in your company is easy, but what about letting people go? Adapting to the demands of this rapidly-evolving environment is necessary to prevent your startup boat from capsizing, even if it involves slipping in the pink slip.

When do you hire

There is this old idea in Silicon Valley that says: “hire slow, fire fast”, however, this idea doesn’t work with a startup. You would need as many good hands as possible to keep your ship from sinking, so instead of hiring less people, and firing more, you would need to “hire fast, fire fast”. In Singapore on the other hand, influenced by its relaxed, laid-back
corporate environment, most companies hire slowly, fire slowly”. As much as possible, you would want to retain all the good employees and weed out bad ones which could heavily affect productivity. So instead of firing someone, what you need to do is screen your potential employees before signing their work contract.

What to look for in a potential employee

In an interview, every person you shake hands with seems to be a pretty good candidate for the job. You would want to hire everyone that comes through that door (if you have the budget for it, why not?), but like what Tyra Banks always says: “only one can be in the running towards becoming America’s Next Top Model” or in this case, [startup name] new hire.

Interviewees might have experience, but they might not have long-term commitments nor willingness to adapt to your work environment or the demands of the industry. What you need is an employee that has 5 or more of these traits to help man your startup:

1.    Drive

Startups need manpower that would help the company move forward. Even if it is outside the job description, this employee should display a great drive to help the company in every way possible.

2.    Creativity

In a startup, creating your own paths is necessary, instead of following the ones that are laid out for you by your bosses and colleagues. As Collective[i] VP of Talent and Performance Management Francesca Romano says “great thinkers are not always the person with the highest GPA or the best SAT score or the most impressive advanced degree. Rather, it’s the person who asks why, and to what end, and how can I do this better.”

3.    Humility 

Startups will significantly slingshot an employee’s learning curve and career in a lot of ways, but mistakes will always be common. Find an employee that knows humility, acknowledges these mistakes, and recovers instantly with optimism, ease, and new ideas to solve the problem.

4. Flexibility

A startup needs skilled employees, more importantly, it needs individuals that can do more than just one thing. Having multi-skilled staff is like hitting two birds with one stone; you have a single individual who can do more than what his/her job description says. Tie it with the next one, and you would come up with the best pool of employees you could ever have on your startup.

5.    Willingness to learn

A flexible employee with a passion is someone that startups need. To keep your startup ship from sailing, it takes good and passionate hands to keep it afloat. Having a jack of all trades with a passion of learning is better than a master of one.

When do you fire

Firing somebody is hard but necessary in a startup. While most entrepreneurs dread the thought of handing somebody the pink slip, it should be done and be done soon. An unproductive and underperforming individual has no place in this rapidly-evolving environment. Even after coaching, additional training, and a significant amount of time, more often than not, these employees don’t get better. And, the longer you retain them, the more unproductive it’s going to be and worse, it could send unhealthy vibes to your other employees. Moreover, it’s going to cost you time and money, something that startups value the most. If you don’t have the balls to fire someone, then you shouldn’t be an entrepreneur in the first place. It is a fast-paced environment that requires you to be tough as nails, even when you have to fire somebody.

According Cheryl Yeoh, founder of the Malaysian Global Innovation and Creativity Centre (MaGIC), “as a founder, you have to trust your intuition”. You have to be honest about giving these employees constructive feedback about their failing performance. Give them specifics on where they can improve on, or what you can do to help out. Treat people with professionalism, and respect while being transparent about their position in the company. In layman’s term, call them out on their poor performance and do what you need to do to keep the ship running.

What to do when they quit?

It might be easy for someone with 20 or 100 employees, but if only have 4 (including you) in your startup, that accounts to 25% of the productivity lost in 24 hours. If a large company loses 25% of their employees, it would probably make the Wall Street Journal front page. It’s not something that can be predicted or calculated, it just happens, whether in small startups or fortune 500 companies.

As a founder, you put your passion in your work, sacrificing time, money, and effort in pursuit of success. However, you cannot expect employees to do the same for your company. While many are passionate about their job, they work to be better for themselves, just like what you are doing for the company, and there’s nothing you can do about it.

When an employee hands over his/her resignation, don’t take it personal. In this setting, you would want what’s best for everyone and support them in any way you can in the company, but you can’t provide that to everyone. Sometimes, employees outgrow the roles that you give them and take the next step in their career, and if you can’t provide that, somebody will be able to.

Your job is make your team love their jobs. Once you are handed a resignation letter, ask them what their thoughts are, and what they would like to accomplish in the coming months or years. The next thing that you should do is listen carefully to what they say, and help them achieve their goals with or without you.

Why do good employees quit?

More often than not, good employees quit because of reasons other than growing in a career path. Some good employees quit because they are unhappy either with your work environment, their managers, or oftentimes, their salaries. So what pushes good employees to quit their jobs?

Because of their managers

Good employees don’t leave good companies; they leave their managers. As a founder or one of the founders, you have to keep an eye out for your managers and how they treat their underlings. Though it doesn’t affect the financial aspect of your company, it does greatly affect employee morale which can trigger a domino effect on others.

Because they don’t have space to be creative

When employees have the space to be creative, they feel more empowered. Empowered employees have the freedom and confidence to make great suggestions, and decisions which could help your startup in many ways possible.

Because there are no opportunities to develop skills

Passionate employees always have a willingness to learn and develop new skills aside from the ones that got them hired in the first place. If you have talented employees, it is your job to keep up and find areas in which they can expand their skill set, provide and honest feedback. Talented employees tend to get bored easily, like a german sherpherd in an enclosed apartment or cage. Once they get bored, they start wrecking things and exploring new ways to grow, even if it means leaving the company.

Because employees feel unappreciated

Nothing feels better than a pat on the back for a job well done at work. For startups, founders need to communicate with their employees to find out what makes them feel good whether it’s a raise, bonus or any financial reward, or public recognition. With the increase of work load and demand, startups should take another look at compensation packages that would benefit their employees and make them feel appreciated.

Running a company isn’t always easy, especially if you have employees that look up to you to guide them. Hiring is always a great indication that your company is steadily growing, but along the way, losing employees is inevitable. Whether they are moving on to the next career path, or simply losing productivity, a startup is no place for anyone who doesn’t have the guts to manage employees well. As a founder, you need to trust your instincts, be professional, show respect and appreciation, and be transparent for your employees.

Image Credit – Getty Images


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