How to Evolve Your Hiring at 50, 100, and 500+ Employees

As your startup grows, the stakes in hiring couldn’t be higher. What worked for your team of 20 won’t suffice as you scale to a workforce of 200 or beyond.

In episode 13 of the podcast, I dive into the four phases a startup goes through as it scales how their hiring practices need to evolve in each one.

Whether you’re scaling rapidly or at a steady pace, it’s essential to ensure you’re not making costly mistakes that could impede your growth and affect your bottom line.

Phase 1: The Startup Phase (Up to 50 Employees)

In the initial phase, startups often rely heavily on a “friends and family” hiring model, where you’re reaching into your personal network, relying on informal processes, and making decisions based on gut feelings and relationships.

While this approach can work when you’re small and nimble, it quickly becomes a liability as you grow and your needs become more specialized and diverse.

Here are some key actions for this phase:

• Define and Conquer: Clearly articulate why each role is crucial to your startup’s success. What unique value does it bring to your team? This clarity will ensure you only hire when you absolutely need to.
• Test Before You Invest: It’s vital to implement a paid project to test new candidates’ skills in a real-world context. This not only evaluates their capabilities and competencies but also assesses their cultural fit and adaptability within your team environment.

Phase 2: The Formalization Phase (50 to 100 Employees)

As you progress into this phase, relying on spreadsheets and informal processes will no longer suffice.

You’ve reached a point where introducing systems and structure is necessary to handle the increasing complexity of your operations.

Here are some key actions for this phase:

• Implement an ATS: An Applicant Tracking System (ATS) isn’t just an option—it’s non-negotiable during this stage. It ensures consistency, accountability, and efficiency across your hiring processes, reducing the chances of errors and enhancing organization.
• Standardize Everything: From job descriptions to onboarding processes, creating a uniform approach is crucial to prevent inconsistencies and maintain quality. This helps to establish a strong foundation for all recruitment activities moving forward.
• Hire a Recruiter: Bringing a dedicated recruiter on board will focus the effort on sourcing the right talent for your organization, freeing your existing team members to focus on their core responsibilities without being bogged down by recruitment tasks.

Phase 3: The Professionalization Phase (100 to 500 Employees)

At this stage, hiring transitions into a full-fledged operation.

The “startup mentality” that promotes an informal structure and flexible rules must give way to a more professionalized approach that can support sustainable growth.

Here are some key actions for this phase:

• Train Your Team: It’s important to equip hiring managers with the necessary skills and knowledge to make informed decisions. Proper training can significantly improve the quality of hires, ensuring that each addition is a strategic move toward company goals.
• Track and Measure: Utilize data analytics to refine your hiring process. Monitor metrics such as time-to-hire and offer acceptance rates to help manage and control recruitment costs effectively.
• Document Everything: Compliance becomes critical at this scale. Ensure every hiring action and decision is logged and tracked meticulously in your ATS to avoid potential pitfalls and ensure legal protection.

Phase 4: The Enterprise Phase (Beyond 500 Employees)

Now, you’re in the big leagues, and your hiring strategy must evolve to reflect your status as a significant player in the industry.

The complexity of your recruitment operations will increase dramatically, necessitating a strategic and scalable approach.

Here are some key actions for this phase:

• Leverage Automation: Use the latest tools and technology to streamline processes and reduce manual tasks, allowing your recruitment team to deliver results faster and not get held back by administrative work that adds no value.
• Enhance Employer Branding: Position yourself as a top employer in your industry to attract the best talent available. A strong employer brand can significantly improve recruitment outcomes and increase employee retention.
• Globalize Your Process: As you grow, tailor your hiring practices to accommodate a diverse, international workforce. This includes understanding cultural nuances and legal requirements in different regions to create a seamless recruitment experience.

Overcoming Common Hiring Challenges As You Scale

Fast growth brings its own set of unique challenges. Here’s how you can tackle the six most common hiring hurdles that frequently arise during rapid expansion:

1. Maintaining Culture While Standardizing Processes: Good processes protect, not harm, your company culture. They ensure you hire people who align with your values, maintaining the essence of what makes your company unique, even as you grow.
   
2. Balancing Speed and Quality: Avoid the temptation to rush. A bad hire can be costly—estimates suggest over $25,000 per mistake. Maintaining a balance ensures quality doesn’t suffer and that each candidate is thoroughly assessed.
   
3. Managing Compliance: Each new jurisdiction you expand into adds layers of complexity. It’s crucial to consult with labor law experts to navigate compliance requirements smoothly and avoid legal issues.
   
4. Controlling Costs: Regularly track metrics like cost-per-hire to ensure your spending is effective and you’re getting a good return on your recruitment investment.
   
5. Maintaining the Candidate Experience: Keep interactions human, and personalize communication throughout the hiring process to maintain a positive candidate experience. This can set your company apart in a competitive hiring landscape.
   
6. Scalable Onboarding: Deliver a consistent onboarding experience across departments, ensuring all new hires feel integrated from day one, which is vital for both employee satisfaction and productivity.

Actionable Tips for Your Scaling Journey

• Invest Wisely: Choose systems and tools that are capable of scaling with your organization. Being forward-thinking in your HR tech investments can save time and resources in the long run.
  
• Strategic HR Hiring: Add HR and recruiting personnel proactively, before hiring bottlenecks occur. This ensures that you have the resources needed to keep pace with growth.
  
• Regular Updates to Policies and Procedures: Continuously refine and update policies and procedures to match your evolving needs. This flexibility helps in adapting to changes in your business as it scales.
  
• Train Hiring Managers: Equip your hiring managers with the skills and knowledge needed to make effective hiring decisions, improving outcomes and boosting team productivity.
  
• Data-Driven Decisions: Measure everything and use analytics to refine and improve your recruitment strategy continuously. Data will help you to make informed decisions and take action quickly where needed.

What’s Coming Next?

In the next episode, I’ll address capacity vs capability and why it matters in hiring.