How to Win the Hiring Wars
Laborious, frustrating and lacking in immediate gratification - recruiting is far from straightforward when building a company. It’s easy to fall into the trap of dragging your feet when hiring or, at the other extreme, leaping into a poor decision. Both can be fatal.
A CEO’s time is precious, and the most dangerous thing they can do is spend it ineffectively. But bringing on board an exceptional team can transform a business. In fact, the most successful founders are spending at least half their time, if not more, obsessing over talent. I decided to dive into the topic and conversations with Marius Istrate (former Chief People Officer at Uipath), Merita Ramadani (Head of People Operations at Payhawk), Piret Saag (Head of Learning & Employee Experience at Veriff) and Radhika Chudasama (People Director at FintechOS) inform the insights that follow.
Building defensibility through hiring: top tips
As an investor, I’m often surprised when founders tell me no one has asked them about their culture and hiring strategies in fundraising calls. In part, it speaks to a wider problem of how little emphasis is placed on the power of a team’s ability to recruit. As Marius Istrate pointed out in our chat about his experience at Uipath, building a moat around talent acquisition was one of the most effective ways to create defensibility.
But how does one go about getting the right talent? The age old question continues to elude and consume even some of the best companies. For my first installment of Chai, I decided to sit down with four experts from some of the most successful companies in CEE and the Baltics. Having led people functions at UiPath, Payhawk, Veriff and FintechOS, they kindly agreed to reveal some of their top tips for hiring:
⌛Hire before you need to: you can never plan how long it will take to find exceptional talent, and so it’s critical to hire when the opportunity presents itself. Waiting until you absolutely need to hire is too late, and is likely to lead to mistakes.
📚 Know your ABC’s (always be closing): if you don’t think you can convince the best people in the world to join your company, you have a much bigger problem. Practise your hiring pitch in the same way you would if pitching the product to a prospective buyer. According to Marius, in the grand scheme of things, very few people will join a company exclusively because of the product. Instead, it’s the culture, vision and story that matter.
💯 Set explicit values from day 1: don’t just hire the best people, hire the best people for you. Culture fit is incredibly important, and can easily get lost in translation. If in doubt, over-communicate what it means to work at your company.
⭐ Have a North Star: people are excited to come to work every morning when they’re motivated by the mission. Piret Saag notes that founders need to create a common, succinct, and clear goal. If you can’t define your north star in a few words, you’ll struggle to build this momentum. Veriff, for example, has a simple, yet powerful, motto: “To help honest people be trusted online and off. We are a force for good”.
🏎️ Meticulously improve the formula: founders and people leaders should look to continuously iterate on what they look for in exceptional talent. Merita recommends taking a look at the characteristics of the company’s top performers every 6 months and baking in their traits to the hiring criteria.
💚Authenticity: working at a startup is far from sunshine and roses. From his own experience, Marius points out that in times of crisis people will always appreciate honesty even if things aren’t going to plan.
⏰ Fire fast: as difficult as it may be at the time, don’t hesitate when something isn’t working out. Not letting someone go when they aren’t the right fit can be more harmful than keeping them around and waiting until they leave on their own.
🤔 Think about bringing on a head of talent: more often than not, founders and their teams carry the burden of hiring alone for too long. According to Radhika, it’s a good idea to build out an internal people/recruiting function before you think you’ll need it. When considering what to look for, Merita believes that while previous recruiting experience is always helpful, ultimately you want someone who sees their role as a ‘builder’.
👥 Hiring KPIs: once you start to scale the team, hiring itself becomes a function that needs careful execution. At this point, it’s helpful to consider measuring several metrics throughout the recruitment process. Piret suggests a few that might be worth keeping in mind:
Timing
Sourcing channel efficiency
Candidate experience
Offer acceptance rate
HR tech stack (e.g. ATS)
The Talent Wars and Why Culture Matters:
One of the most common themes that comes up time and again in the quest for a great team is the perpetual lack of talent. Just this month, the UK has announced that there were more than two million vacancies in tech last year, more than any other labour area. A recent global report from Gartner states that IT executives list talent shortages as the most significant barrier to the adoption of 64% of emerging technologies, ahead of cost and security. In 2020, this opinion was only held by 4%.
It’s unsurprising that in recent years we’ve seen tech companies engage in battles to win over the best people. As Marius explained “the talent war is an eternal one, it’s a continuous cycle that never seems to get any better.” Having obsessed over recruiting his whole career, both as the founder of SkillValue (an HR tool) and as the former Chief People Officer at Uipath, he’s experienced in fighting over a limited supply.
According to Marius, we must be doing something seriously wrong if even after a decade, we’re still struggling to attract and keep our employees. Indeed, the average tenure of employees has dropped from ten years to five. In tech, the outlook is even worse, with a median time of three years. Armed with large equity packages, attractive salaries and benefits, even brands like Google and Amazon can’t seem to keep their employees for more than a year on average.
One of the biggest assumptions companies make is that salary, benefits and a ‘cold drinks fridge’ is what people look for when they take a job. In reality, it’s the opposite. Nearly nine times out of ten, workers between the ages of 22 and 37 would take a job for lesser pay if the company’s values were better aligned with their own. In the end, it all comes down to culture.
But what exactly does company culture mean, and how do you define it? According to the Harvard Business Review, ‘culture expresses goals through values and beliefs. [It] guides activity through shared assumptions and group norms…when properly aligned with personal values, drives, and needs, culture can unleash tremendous amounts of energy toward a shared purpose and foster an organization’s capacity to thrive.’
As social animals, we’re programmed to seek out meaningful environments and relationships, which outrank our desire to seek out fiscal reward. Moreover, in the right environment, we’re doubly inspired to be our best selves. For example, take a look at Brie Wolfson’s brilliant memoir of what it was like to work at Stripe in its early days. As she describes ‘the culture was demanding…but I have to admit that it felt good to care about anything that much. And, to be around people who I know cared that much too.’
While company culture is dynamic, it can be moulded and shaped. Brie also poignantly notes that ‘it felt like magic, but there was deep thought, care, and intention behind everything.’ Although there’s no right or wrong way, below are a few suggestions about how to think about culture building:
✨ Purposeful and particular: build culture with intention and care. Spend time obsessing over your north star, what you want to achieve and what values you're motivated by. Crafting your manifesto needs to feel like you’re weaving a tapestry with your company’s story. Be ambitious, distinctive and exciting: as Marius remarks, you need to incentivise people in a way that makes them dream.
🤝 Shared: culture is a group phenomenon. It doesn’t exist solely within one person, nor is it simply the aggregate of individual characteristics. It develops with each new hire, and resides in the shared behaviours and beliefs of the group - that is, the unwritten rules.
⛳ Start with the recruitment process: as each new hire develops the culture, it’s crucial that you’re intentional with the talent you acquire. At Payhawk for example, ‘a bias for action’ and ‘building’ is one of the core values they bake into the hiring criteria. Anecdotally, Merita explains, in a period of growth their Sofia office ran out of parking spaces - in response, the team immediately organised carpooling amongst themselves. If you’re nailing the recruitment process, you might see some unintended consequences that let you know you’re on the right track.
🖌️Original: it’s key to build a unique culture. As tempting as it is to copy Netflix’s infamous culture manifesto word for word, Piret advises not to emulate something you’ve seen elsewhere. To help with this, Marius suggests defining and creating your culture in opposition to something.
As we enter a new normal of hybrid working, a looming recession and a seemingly uncertain funding market, conversations around talent will become even more important. While this piece only touches the surface, it’s my hope that it will inspire more conversations around what it means to build company culture and assemble brilliant teams. Finally, I want to say a huge thank you to Marius, Merita, Piret and Radhika for sharing their experience and insights on recruitment.