In this instalment of “Ask an expert”—a blog series that seeks to address common mistakes that entrepreneurs make—Angelo Casanas interviews Margo Crawford, president and CEO of Business Sherpa Group, who offers her two cents on recruiting.
Entrepreneurs begin their journey with an idea, followed shortly thereafter by facing the daunting task of bringing that idea into reality. This entails not only finding the right resources, but also finding the right human resources.
Human resources (sort of like your company’s supply and demand of personnel) can mean the difference between realizing your dream or creating an organizational nightmare.
In today’s post I turned to Margo Crawford, President and CEO of Business Sherpa Group and a regular presence in the MaRS Best Practices and Entrepreneurship 101 series. Her organization offers small and medium businesses in North America an effective and cost-efficient means of tackling human resources. Business Sherpa Group assists these businesses not only on a strategic level, but also on a tactical level, including providing services relating to recruitment, organizational structure and compensation planning.
What common mistakes do entrepreneurs make when it comes to recruiting?
Most entrepreneurs know that they have to build a team, but the biggest mistake they make is to be reactionary. Companies will say, “We need a developer” or “We need a finance person,” and then they go out and hire the person without stepping back and thinking about what the company really needs to do.
What usually happens is that companies think about the traditional roles that need to be filled. What they’re not thinking about is what roles they will need in the next six months or in the next two years and how they’ll resource those positions.
What happens to entrepreneurs who make this mistake?
I see a lot of companies in their first or second year [of operations] that have hired a number of resources and then all of a sudden find out that their employees do not have the skills they’re looking for or are not the type of people who can adapt to the different types of competencies required, besides the technical skills expected.
On a number of occasions, startups have found that they have a lot of people with one skill set, but since business can change quickly, like in technology for example, they find that they still have gaps left to fill.
It’s a big problem because you may find that you’ve over-hired really quickly or that your team is not performing the way you want it to because of the different mix of people you have on hand at a particular point in time.
Over-hiring or mis-hiring can also be costly mistakes that affect the development cycle of one’s product and keep it off track. The problem in a startup is that you have so few resources to rely on. Getting it [hiring] wrong has a much greater impact on a startup than it does on a bigger company where you have much more time to recover.
What should startups do instead?
Entrepreneurs running a startup will already be thinking about their business plan. They know their technology road map (or they should), they know what financial milestones they have to hit and they know what customer activity they must attain. So, if you pull all of those things together into one time horizon, then you can just add one element to that: determining what resource mix of people you’ll need. Having all of those elements together will help startups set out a road map for the mix of hiring that they’ll have to do at different points in time.
Another recommendation is to not be hasty in posting jobs on job boards or throwing them to recruitment firms, as these tactics may be too costly and expensive in the early stages of a company.
Also, if you do not have real clarity about what you want and need, people will just respond to the job posting that is provided. Startups should take the time to define how this individual will work and what conditions this person will be working under. Will there be a lot structure or no structure? Will he or she be presenting to the board of directors or will this person be client-facing? Asking such questions—apart from considering the skill sets you need—will help set the expectations for the role and define the role much more clearly. This will help startups focus on the right hiring and avoid a lot of pain later on.
- Video: Recruiting: Entrepreneurship 101
- Slides: Workforce of the Future is Upon Us
- Workbook: Building an A-Team
- Article: Recruitment, selection and hiring
Angelo is the associate for corporate services at MaRS. As a recent convert to innovation, he assists the many moving parts of the MaRS ecosystem to meet the demands of both internal and external stakeholders. See more…