Recruitment and Selection Strategies for Building a Strong Team

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The key to the success of any company is building the right team at the right time, but the process of finding, recruiting and selecting the group who will be 'on the bus' through the journey can be one of the least planned out and executed activities in a start-up, often leaving companies having to rein in headcount, or reduce burn and critical gaps in their team at a later stage. In this session you will learn the principles of recruitment and selection as well as practical approaches for early stage companies including critical tips and pitfalls to avoid along with a set of lessons learned from years of supporting start-up companies.

Part of the MaRS Best Practices Series - with speaker Margo Crawford, President & CEO, Business Sherpa

More, including session video: http://www.marsdd.com/events/details.html?uuid=df2648aa-c50c-4c4b-9a61-66101151c9bd

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Recruitment and Selection Strategies for Building a Strong Team

  1. 1. Margo Crawfordbusiness sherpa
  2. 2. Margo Crawfordbusiness sherpa Entrepreneur’s Toolkit: www.marsdd.com/entrepreneurs-toolkit.html HR Workbook 1: Building an A-Team HR Workbook 2: Compensation HR Workbook 3: HR at Work Creating an HR plan: Butteriss on human resources Building HR processes, policies and procedures Compensating employees Hiring your friends: Is it such a good idea? Video: Human Capital: Building high performance teams Video: Human Resources Management
  3. 3. Margo Crawfordbusiness sherpa business sherpa group trusted. capable. results-driven Start-Up Recruiting Building Your A-team
  4. 4. Margo Crawfordbusiness sherpa Introduction GOAL Share practical realities of building an A-team in a start-up environment Tips, tools and lessons learned
  5. 5. Margo Crawfordbusiness sherpa Introduction September 10th 12:00 – 1:00 PM (Room CR2) focus on recruitment and selection when building start up teams September 17th 12:00 – 1:00 PM (Room CR2) compensation and rewards strategies/tools September 24th 12:00 – 1:00 PM (Room CR2) unique look at sales recruitment and sales compensation plans
  6. 6. Margo Crawfordbusiness sherpa Background Business Sherpa   Virtual VP of HR supporting start-ups, early-stage companies and social venture enterprises   25+ years of HR experience (10+ years in start-ups)   HR Professional of the Year Ottawa 2006   Co-founder of Meriton Networks (optical networking start-up) from formation to sale 8 years later   Supporting start-ups in Toronto and Ottawa over past 2.5 years as Business Sherpa
  7. 7. Margo Crawfordbusiness sherpa Unique Issues of a Start-up Founders   May be in leadership roles whether they should be or not!   Founders are the foundation with biases & preferences – some good some bad Money   You have it ….then you are running out of it   Over-filling the ranks will consume your cash quickly
  8. 8. Margo Crawfordbusiness sherpa Geographic Challenges   Where you form may not be where your ‘talent’ lives   Customers will impact who and where you recruit for some roles Market Timing   Don’t get multiple shots at hitting the market window at the right time – anticipating vs. reacting even more critical   Miss-hiring and losing time can be a devastating blow vs. an annoying inconvenience Unique Issues of a Start-up
  9. 9. Margo Crawfordbusiness sherpa Building a Team – Recruitment 101 Your best shot at getting it right Plan well Search creatively Choose wisely
  10. 10. Margo Crawfordbusiness sherpa Planning around key milestones = precision hiring Ready Aim Hire Formation Year1 Year3 Year4 Year2 Year5 Technical Milestones Proofof Concept V.1 Product V.1GA Product V.2 Product V.2GA Product Financial Milestones Seed Funding SeriesA SeriesB Strategic Revenue +Margin Revenue Yearly Revenue Growth Quarterly Revenue Growth SeriesC IPO/M&A Customer Milestones Company Launch Early Customer BD Customer Trials Strategic Customer Sales Repeat Sales Repeat Sales Repeat Sales New Accounts New Accounts New Accounts V.1 Sustaining V.2 Sustaining Recruitment Milestones CEO R&D Lead CFO (P/T?) PLM Sr. R&D Marcomms Int./Jr. R&D BD/ Sales QA SE’s Sales (Hunter) Sales (Farmer) CTO Sales Support Customer Support HR (P/T?) VP Sales VP Marketing Admin. Support CFO (F/T) Accountant COO? HR (F/T?)
  11. 11. Margo Crawfordbusiness sherpa Key Observations About Recruitment Milestones Ready Aim Hire Recruitment Milestones CEO R&D Lead CFO (P/T?) PLM Sr. R&D Marcomms Int./Jr. R&D BD/ Sales QA SE’s Sales (Hunter) Sales (Farmer) CTO Sales Support Customer Support HR (P/T?) VP Sales VP Marketing Admin. Support CFO (F/T) Accountant COO? HR (F/T?) Identify Pillar Hires   Key to success, but timing may differ depending on budget, sector, market, technology, customers, etc. Creatively Fill Gaps   Functions must get done, even if you can’t hire   Consider all options advisors; part-time/virtual support; contract out; technology licensing VP-level Not Necessarily First Hire   Consider what must get done – do you need a ‘doer’ or a ‘builder’?
  12. 12. Margo Crawfordbusiness sherpa Key Observations – Recruitment Milestones Ready Aim Hire Recruitment Milestones CEO R&D Lead CFO (P/T?) PLM Sr. R&D Marcomms Int./Jr. R&D BD/ Sales QA SE’s Sales (Hunter) Sales (Farmer) CTO Sales Support Customer Support HR (P/T?) VP Sales VP Marketing Admin. Support CFO (F/T) Accountant COO? HR (F/T?) Consider Timing   Recruitment can take from 1 – 3 months; plan accordingly Be Prepared to Swap Out   Reality of limited time/funds/people   Think strategically Building Up Headcount – Easy Solution   Very tempting to over-hire early in order to accelerate timelines   Can seriously affect the burn rate; or consume future key headcount
  13. 13. Margo Crawfordbusiness sherpa Ready Aim Hire Establish Key Recruitment Funnels   Initially based on your pillar hires   Based on key hires over time Development Sales Product Mgmt. Marketing Continue to Fill The Hopper   When sourcing candidates, keep all funnels in mind – fill the hopper as good candidates uncovered
  14. 14. Margo Crawfordbusiness sherpa High Credibility Sourcing Low Credibility Sourcing Trusted Individual Endorsement Executive Search Employee Word of Mouth Employee Referral Program Social Networking Recommendations Head Hunters Internal HR Job Board High Cost Process Low Cost Process Ready Aim Hire Finding Talent – time & $$$ Spending more $$$ does not necessarily reduce time nor improve results.
  15. 15. Margo Crawfordbusiness sherpa Ready Aim Hire Resources To Help Internal HR Team   Full time may not be affordable   Virtual HR being widely adopted for start-ups – can provide tremendous value in supporting effective recruitment at a fraction of the cost of head hunters Networking   Tremendous networks to support companies: team; MaRS; Board; advisors; investors; former colleagues; schools
  16. 16. Margo Crawfordbusiness sherpa Ready Aim Hire Recruiters   DO NOT handoff your recruitment – requires time and management   Expensive 20% - 25% of starting salary – use selectively   Keep focused on roles that are most challenging   Manage tightly and demand results – or change   Use limited recruiters at once – can be very overwhelming otherwise   Select firms that have specialized in your sector   Terms: contingency only and no exclusivity Executive Search   Use only as needed and for most senior level roles   Typical terms 30 – 35% of starting salary and usually a retainer involved   Used very strategically and NOT as the first tool in the tool kit
  17. 17. Margo Crawfordbusiness sherpa Job Descriptio n POST Website (maybe?) Job Boards Paper Engage Recruiters Ready Aim Hire Typical Approach:
  18. 18. Margo Crawfordbusiness sherpa Typical Result: Job Descriptio n Onslaught of responses Ready Aim Hire Engage Recruiters
  19. 19. Margo Crawfordbusiness sherpa Signs of ineffective Recruitment:   Looking at resumes sporadically – as they come in OR as you can get to them   Interviewing candidates weeks apart   In a continual state of wanting to see who else might be out there   Changing requirements while recruiting   Interviewing on the fly   Preparation for an interview is re-reading the resume Reality of start-up environment   There are many pressures and fires to be put out – recruitment will not remain the highest priority throughout the recruitment process   Resources are thin – so support to manage the process is often not there   Conditions constantly changing Ready Aim Hire
  20. 20. Margo Crawfordbusiness sherpa Keys to Effective Recruitment in a Start-Up: Ready Aim Hire 1.  Process 2.  Description 3.  Choice
  21. 21. Margo Crawfordbusiness sherpa Process   Tight recruitment process will save time and improve results   Create a project plan for each recruitment effort   Have all resources work to this plan and key decision points Ready Aim Hire Stage 1 – create a recruitment funnel   Job postings – on targeted sites   Recruiters – internal and external as appropriate   Strategic search – source from networks Stage 2 – develop long list   High quality match resumes only   Do not screen ad hoc – review large sets of resumes at once   Do not allow recruiters to feed resumes in a trickle
  22. 22. Margo Crawfordbusiness sherpa Stage 3 – identify short list:   Best matches   Aim for 6 – 8 - do not start interviewing until you have this Ready Aim Hire Stage 4 – 1st round interviews:   Make interviews structured and consistent   Interview with others – efficient; easier to assess candidate (can have several interviewer groups)   Prepare questions – connect to job description Stage 5 – 2nd round interviews/testing:   Introduce a ‘testing’ component – e.g. do a presentation for you   Aim for 3 top candidates Stage 6 – references and offer:   Get permission for references (think about who should conduct references)
  23. 23. Margo Crawfordbusiness sherpa Sample Recruitment Plan: Ready Aim Hire
  24. 24. Margo Crawfordbusiness sherpa Job Descriptio n A vanilla job description will produce vanilla results. Ready Aim Hire Description   Becomes an essential filter for automated and manual search mechanisms   A guidepost to keep selection on track
  25. 25. Margo Crawfordbusiness sherpa Features of Excellent Job Postings for Start-Ups   Clearly articulates ‘table steaks’ skills   Paints a real picture of the ideal candidate   Sells the opportunity through role, technology, industry, etc.   Has a deadline to match recruitment plan Ready Aim Hire
  26. 26. Margo Crawfordbusiness sherpa Reaching Out – advertising your GREAT opportunity   Job Boards – 2 types   Those that cost a lot and reach millions of candidates   Those that cost little and reach targeted audiences   User groups   Business/professional networks   Professional associations   Alumni associations   Etc.   Print ads – don’t!!! Useless for start ups for $$$   Web site – may or may not be an option (stealth vs. launched)   Word of mouth – ALWAYS – use advisors, board, investors, colleagues   Social Networking Ready Aim Hire
  27. 27. Margo Crawfordbusiness sherpa Ready Aim Hire Social Networking has completely changed the game…..   Previously company phone lists were a protected asset   Now – access to everyone   Problem is the clutter has multiplied   One network can access millions   Everyone is a ‘friend’ and can recommend a candidate – with no way of validating the quality of the reference SO how do you find and reach your stars?
  28. 28. Margo Crawfordbusiness sherpa Ready Aim Hire Best Professional Networking Tool Pro’s   Access to millions of professionals in all industries, professions and geographies   Career focused   Provides access to contacts useful beyond recruitment Con’s   Access to millions of professionals in all industries, professions and geographies   Unreliable filtering of quality candidates   Adoption just picking up in Canada – network is still light
  29. 29. Margo Crawfordbusiness sherpa Ready Aim Hire Tips on effectively using Linked In   Post opportunities – about $150/posting   Take every opportunity to build network in all geographies and industries   Use search capabilities   Reach out to candidates – customized and personal   Leverage common contacts, or marquee roles/industries/ technology   When searching – look at what other funnels you can fill   Update company’s profile – update key events
  30. 30. Margo Crawfordbusiness sherpa Ready Aim Hire Choice   Biggest failure in recruiting is to have one to choose from   THIS IS NOT A CHOICE!!   Never stop at the front end of the process (filling the funnel) until a candidate is hired   Do not be left in a default position AIM TO HAVE A CHOICE OF 3
  31. 31. Margo Crawfordbusiness sherpa Choosing is the biggest challenge of all!!   Who YOU like the best may not be best for the company   Interview – a balance of asking and selling – hard to know what you are seeing   Comparing candidates over a protracted process is difficult to do   Interviews easily drift off course   Interviewing is mentally exhausting   A tendency to like or dislike; be cynical or wanting to make candidates feel comfortable can take away from the evaluation process   A highly faulty process!!! Be aware of this and plan accordingly. Ready Aim Hire
  32. 32. Margo Crawfordbusiness sherpa Mitigating the Risks:   Prepare questions based on the job description – ask questions that tell you something   2nd round of interviews can be very telling   Interview several candidates over a couple of days – keep it very tight   Know your biases and plan around this   Interview with someone else – so you can mentally rest and evaluate during interview   Big believer in ‘testing’ – or putting candidate in-situ as much as possible   Finally – put your concerns on the table….in fact force yourself to find some to put on the table 1st Interview: Company – asking Candidate - selling 2nd Interview: Company – selling Candidate - asking Ready Aim Hire
  33. 33. Margo Crawfordbusiness sherpa Making an offer:   WAIT – check references first!! ALWAYS   Do your homework   Understand where they are at/expectations   What can you pay   What is the ‘bundle’ you offer (salary, benefits, options, role, opportunity, sector, technology) – this is the offer – not just $$$   Provide verbal and written offers (make sure you have a solid employment contract) with a deadline to accept – so you can go back to other candidates   Once offer is accepted – keep connected to the candidate until they are in the door and in seat Ready Aim Hire
  34. 34. Margo Crawfordbusiness sherpa Best Recruiting Tips for Start-Ups 1.  Know the pillars you must build upon. 2.  $$$ spent ≠ saved time or quality results. 3.  Use full scope of recruitment tools. 4.  No not hand off recruitment 5.  Most effective recruitment:   Tight Process   Clear Description   Have Choices
  35. 35. Margo Crawfordbusiness sherpa Best Recruiting Tips for Start-Ups 6.  Descriptions are your best filter and guidepost to keep recruitment on track 7.  Never make a default choice – aim for 3 solid candidates to choose from. 8.  Know the biases risking the process – mitigate these.
  36. 36. Margo Crawfordbusiness sherpa Questions Thank You!

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