Hiring for a Startup: Growing from Startup to Scale Up

The shift from selling a few thousand products a year to managing a national or international business is pretty huge. Many startups go through a big struggle period because their team of people cannot meet the changing demands of a growing business. Founders and entrepreneurs feel frustrated by poor performance, constant crises, and increasing employee turnover.

Sound like you and your business? Maybe you need some help with hiring for startups.

I’ve been through this stage with some high-profile companies. Gousto. Hotel Chocolat. BULK. Beer52. These are big brands with massive reach that I’ve worked with through this transition. I’ve learned some tough lessons about how to build a team with capacity to scale your business.

In this article, I’m going to share some of this real-world, hard-won knowledge with you. Stuff like:

1. The Importance of People Strategy: Businesses struggle in transition because people struggle in transition. Let me show you how to anticipate these struggles and pave the way for growth.

2. Avoiding Common Pitfalls: Over-promotion, poor planning, and cultural mismatches are common problems. Thankfully, the solutions are pretty straightforward.

3. Future-Proofing Your Team: Scaling up your business isn’t a mystery. Others, like myself and the companies I’ve worked for, have done it before. Let’s really get to grips with what’s going to happen and how you can get ready for it.

Enough intro - let’s get into the first thing we can understand together: what makes building a team for scaling up a business difficult.

Hiring for Scale: Why It Can be Tricky to Get Right

Startups face unique challenges during their growth phases. Moving from a small, nimble team to a larger, more structured organisation is a tricky process. Many founders, laser-focused on the exciting parts of growth like new markets and products, often overlook the critical need for strategic hiring.

A key challenge is the necessary shift from a founding team of generalists to a high performance team of specialists. This can be the phase businesses find the hardest or get wrong. There is a high chance that the people that got you to £1m revenue will not be the same people that get you to £10m revenue. Without a plan for developing your specialist teams, the pattern of growth -> crisis -> shrinkage will keep repeating itself. You’ll break the cycle by getting ahead of the recruitment curve with a good team development and hiring strategy.

Understanding the Challenges

As your business scales, the demands on your team change rapidly. What worked with ten people won't necessarily work with fifty. This transition period can be riddled with poor performance, operational bottlenecks, and employee burnout. I've seen this firsthand in my work with brands like Gousto and Hotel Chocolat. The key issue? Companies often fail to plan their people strategy with the same rigour they apply to systems or processes.

The Importance of Strategic Hiring

Strategic hiring is essential for sustainable growth. It’s not just about filling positions quickly; it's about finding the right people who can grow with your business. This means looking ahead, understanding the skills and roles you'll need in the future, and making sure your current team is supported and not overburdened.

Why Many Get It Wrong

Many startups make fast decisions, like promoting the longest-serving employee to a role they’re not ready for. This can lead to high turnover and cultural disruption. Instead, you need a forward-thinking approach, considering not just immediate needs but also future demands. By planning your people strategy effectively, you can avoid these common pitfalls and set your business up for long-term success.

Hiring Process in a Startup: How the Real World Looks

Startups and entrepreneurs are like economic unicorns these days. Everyone wants to be one and few people understand the challenges they face. Based on my extensive time in warehouses, Distribution centres, and leading operations teams, let me tell you what hiring really looks like in a high growth business.

Key Characteristics of Startup Jobs

A fast-growing business is, as you'd expect, changing rapidly. This puts huge strain on the employees and leadership. This happens for a few reasons:

• Rapid sales growth puts pressure on every part of the supply chain.

• New products, new markets, and new processes introduce a high degree of complexity that can easily outstrip the skills of employees.

• In a pressurised workplace, most people's negative personality and cultural traits come to the fore.

None of these are surprising, or a sign of business trouble. They are pretty natural growing pains of a business scaling from start up to scale up. However, we can smooth out the difficulties by hiring the right people at the right time.

Resources are typically limited in a startup, which means every hire counts. The stakes are high, as each team member plays a crucial role in driving the company's success. It's essential to hire versatile employees who can wear multiple hats and grow with the company at the very early stages of your business. But as it matures and gains scale and complexity you will need to think about how you switch from a team of generalists to introducing more specialist skills.

In a startup, what you needed last week or last month might be very different from what you'll need in six months. Founders often face forward, excited about new opportunities, but they need to think about the people in the engine room who are keeping things running.

Common Mistakes in Startup Hiring:

1. Overpromoting Underqualified Employees: One of the most common pitfalls is promoting employees who aren't ready for higher responsibilities. This often happens because it's the quickest solution in a pinch. Overpromoting someone who isn't equipped for the role can lead to burnout and stress and eventually cause them to leave. This not only loses you a good employee but also affects team morale.

2. Making Knee-Jerk Hiring Decisions: In the rush to fill gaps, startups might make hasty hiring decisions without proper vetting. This can lead to mismatches in skills and roles, creating more problems down the line. Planning ahead and understanding the skills you'll need in the future is crucial. These decisions might solve a problem temporarily but can create bigger issues as you scale.

3. Neglecting the Alignment of Company Culture and Values: Culture fit is vital for any company, but especially for startups. Bringing in people who don't align with the company's values can disrupt the existing team dynamics. Founders need to consider not just the technical skills but also whether new hires will fit into the company's culture. This ensures a cohesive team that can work well together during the scaling process.

4. Hiring someone too senior for the role: Often, when the operation or supply chain is neglected and in chaos, it is thought that bringing in a COO from a big blue-chip company will solve all the problems. However, this can worsen the issues if not carefully considered. Scaling a start-up operation requires a very different skill set compared to managing an established corporate business. It is common for such hires to be a complete mismatch and leave within six months. Finding people experienced in navigating the next phase of the journey is critical.

By understanding these key characteristics and common mistakes, startups can better navigate the complexities of hiring as they grow. This strategic approach to hiring can pave the way for sustainable growth and a resilient team.

Developing a Strategic Hiring Plan

Planning is crucial for avoiding the pitfalls of unplanned growth. Many businesses falter because they don’t anticipate their staffing needs. Founders are firmly faced forward, looking at the next exciting project that will likely add more complexity to the operation. They’re not thinking about the people that are sitting in the engine room at the back. This oversight can lead to burnout and high turnover, undermining the business's growth.

Steps to Create a Hiring Plan

1. Assess Current Personnel and Identify Skill Gaps:
   Start by evaluating your existing team. Identify who’s excelling and where the gaps lie. I've seen brands make knee-jerk decisions of just over-promoting the next person in line. They're actually putting them at risk. Understanding these gaps helps in making informed decisions rather than rushed promotions.

2. Define Future Growth Targets and Corresponding Hiring Needs:
   Determine your business’s growth trajectory. Are you expanding into new markets or launching new products? Each goal will necessitate new skills which is going to mean development of the existing team or a new hire. What you needed last week, or last month, is going to be very different to the skills needed to handle all your business in six months' time.

3. Develop a Timeline for Hiring and Onboarding New Employees:
   Create a timeline for your development and hiring needs to ensure smooth integration. Many founders overlook the time it takes to get people upskilled or the right people in place. They only start to address it when it becomes too late. Planning ahead prevents reactive hiring and ensures you have the right team in place as you scale and avoids expensive mistakes that need unwinding down the track.

By following these steps, you can create a strategic hiring plan that supports sustainable growth and mitigates common challenges faced during rapid expansion.

Assessing Current Personnel

Taking a good, honest look at your current team is one of the most important steps in recruitment. Many of your people will be filling multiple roles. Which ones are they really good at? Where are the gaps that will grow when someone is promoted from the inside? Your early hires can have a lot of emotional attachments for you. That doesn't mean they are the best people to promote or keep for the long term.

Measuring Engagement and Performance

One of the first things a founder or manager must do is measure how engaged their employees really are. There are a few key questions:

• Do they really care about the business?

• Is their work suffering due to a high workload or poor management?

• Are they close to walking out the door?

These are real questions. The only way to answer them is to venture out of the office and talk to people. Engagement surveys are the way to go.

Of course, these surveys come in lots of different forms. If you're running a small business with 12 employees, you probably don't need a written survey. Just go chat with your people. But if you've got two warehouses and a total staff of 64, then you should probably have one on one meetings with your key team members and use some kind of survey for the rest.

How do you know when engagement is suffering? You'll see a few signs:

• Fewer moments of employee camaraderie

• Increasing absences and missed days of work

• Change in atmosphere

The only way to gauge a change in atmosphere is to be connected to your team. You’ll notice tangible signs of decreased work quality or dropping standards. But being in the room is the only way to know when tempers are fraying, someone is being excluded, and the team is starting to break down.

What to do next? You've got an engaged and active workforce, how do you plan your next hire or start the recruitment process?

Do a Skills Gap Analysis Before the Job Search Starts

Evaluating existing skills against future needs is vital for sustainable growth. At IMPACT EVOLVE, we would strategically work with the business to understand their growth plans. Where are they at today? What skills and organisational design and structure have they got in place?

Let's think about an example. If we're working with a business and they want to grow their revenue, what do we say about skills? We might say, "Okay, you're five million now, you want to get to 20. At a broad level, we've got four times the size of the output. How we do that is the next question.”

Then we want to break that down into the implications for the business. For example, to continue, “So, 10 million of that is going to come from direct-to-consumer sales, five million from retail, and five million from international. If international sales are currently handled by a warehouse manager but will soon need someone skilled in customs and cross-border tax,we then have some decisions to make. Is there someone in the team we can upskill? Should we outsource this new requirement to a specialist? Or do we need to hire? Whichever decision you take, this needs to be planned and thought through in advance.

This strategic planning involves using a skills matrix tool to assess the capabilities of the existing team. We get into much deeper insight at an individual level to say, if that person is going to continue to be successful in their role, the output of that role needs to quadruple in both volume and complexity. So, for them to be successful, these are the tools and skills they need. Maybe we need to give a training course ahead of time, or perhaps one-on-one mentoring or we take the decision to hire.

By addressing skills gaps proactively, you ensure your team is prepared for future demands, preventing knee-jerk reactions and fostering a supportive environment where both managers and employees can thrive.

Strategic Workforce Planning

The supply chain management hiring process can be lengthy. A quick hire takes a month, but it's not uncommon for businesses to take two, three, or even six months to get their first hire for new management. A recruitment agency might help, but they might also not understand your business and its needs.

Instead of rushing things, we stress the importance of strategy. Aligning your hiring strategy with your business strategy will produce great results in the right timeline.

Let's look at how to do this in a general sense.

High-Level Planning

Strategic workforce planning is crucial for aligning your hiring strategy with business growth plans. You need to look at your revenue goals and market expansion to determine your hiring needs. For example, if your goal is to expand into international markets, you'll need to plan for skills or roles that handle customs and cross-border tax implications. If you're going to introduce a new sales channel have you really considered the skills, resources and systems that are going to be required to launch successfully?

Here are three areas to consider to align business and hiring strategies:

• Will your planned growth require more resources?

• Will the growth require more specific skills?

• Will your expansion include new locations?

Answering yes to any of these means you should be planning to hire more people or upskill your existing staff. Usually both. For example, a warehouse manager might be perfect right now but feel under tremendous strain when asked to manage two warehouse locations. If they are not given the correct skills, resources and tools to be successful, they might just break under the strain.

Detailed Role Assessment

Creating a skills matrix and mapping out future roles helps in prioritising hires based on immediate and long-term needs. We use a skills matrix tool to evaluate the current disciplines and skills of the existing team. This helps in developing job descriptions and KPIs tailored to specific growth stages, ensuring that each hire is strategically aligned with the company’s growth trajectory.

If your company's roles don't have specific descriptions with specific KPIs, then you are probably struggling to measure effectiveness. This becomes the perfect place to start. After all, if you don't know if your current team is successful, how can you know whether you should promote them or replace them?

Hiring Best Practices for Startups

Once you understand who you need to hire, how do you decide which candidate is the best fit? Job boards and recruitment sites don't always do a great job filtering out candidates.

Instead, you could turn to experts who know what they are doing. Generic interview questions and background checks are only going to get you so far.

Cultural Fit and Values Alignment

Ensuring new hires align with the startup’s culture and values is vital. Founders often overlook the importance of cultural fit during rapid growth. To maintain a cohesive company culture, consider strategies like involving multiple team members in the interview process to gauge cultural fit.

Working with a partner who knows the industry is also really important. They'll be able to see whether someone is a good fit based on their experience in logistics and supply chain management. More importantly, experience helps them understand the phase of the journey they are skilled at delivering. Remember, it takes a unique toolkit to be successful in a business that is scaling fast. It’s also a very different skill set to one that thrives in a mature and stable business operation.

Practical Hiring Tips

There are lots of ways to go about finding the right person for the next stage of growth. Instead of making a long list, here are two key things we have learned along the way:

• Avoid the temptation to hire overqualified candidates for the sake of vanity. Balance senior hires with the current stage of business growth. Some businesses hire the ex-CEO of some global leader thinking that's the way to go. But that person might be "too big" for the job. Your company will be better served by someone whose career stage matches your company's growth stage.

• Using real-world tests and case studies in the interview process can help assess practical skills effectively. This ensures new hires are not only qualified but also the right fit for your current needs. This is a way of stress testing someone in the interview process. A hypothetical scenario or thought experiment is a great way to explore how someone thinks and how they might react to stress in the business.

What about the current employees? How do you know if they are the right fit for the future? We work with three As:

• Attitude - Do they want to grow and learn new skills?

• Aptitude - Can they perform at a high level and move the company forward?

• Alignment - How well do they get along with other leaders and staff?

These are, in many ways, a judgement call. You know your staff and you'll have to decide if someone's attitude and alignment will really work with your business growth plans.

The IMPACT EVOLVE Difference

Here are three things we bring to the table that will make your hiring strategy much more effective:

1. We understand your business. No, not “we will strive to understand your business.” That’s recruitment agency talk. We’ve really been there and done that on shop floors and in warehouses for decades. We know - from personal experience - how supply chains and logistics work.

2. We think strategically and holistically. We don’t just sign up to hire your next warm body. We work with you to gain insight into the skills your business needs to scale up. Then we help you evaluate the whole business and all your staff members. With this holistic evaluation, we plan the training and hiring you’ll need to put the right team in place.

3. We join you in the hiring process. Recruitment agencies might just spec out their jobs to job boards and filter CVs for you. We join you in the process. We craft job descriptions and adverts. We review CVs. We reach out to our contacts in the industry on your behalf. We interview candidates with you. We give you our expertise and experience so every new hire fits your journey and culture.

IMPACT EVOLVE is a partner, not a project manager or recruiter. We’ll be there with you during the entire hiring process to help you find the best people for your next stage of growth.

Conclusion

Strategic hiring is critical for the growth and success of startups. For personalised hiring advice, schedule a consultation or discovery call with IMPACT EVOLVE. Our proactive approach can help you build a resilient team ready to scale with your business.