Emphasis on the importance of human resource planning early on in the start-up process by looking at the legalities of hiring employees, the process of recruiting and how to manage and pay employees.
2. Business Sherpa Group
HR Strength.
Guidance.
Support.
Entrepreneurship 101
Human Resources &
Recruitment in Start-Ups
Business Sherpa Group
3. Background
Margo Crawford
Ø 25+ years of HR experience (12+ years in start-ups as a
founder and business sherpa)
Ø HR Professional of the Year
Ø Co-founder of Meriton Networks (optical networking
start-up) from formation to sale 8 years later
Business Sherpa Group
Ø Business Sherpa Group is a full service HR team - from
executive level to new grad HR professional – providing
full HR functionality for small enterprises
Ø Supporting over 20 companies in Ottawa and Toronto
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4. Introduction
Themes
• HR in start-ups today – best practices
• Planning your organization
• Recruitment vs. Strategic Talent Sourcing
• Effective recruitment in 2012
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5. What has changed…
Start-up realities in 2012
• Start-ups today know cash is king, so:
• They will not grow larger than they absolutely must
• Each new hire must = best decision for the next dime spent
• Marketing efforts focused on reach to customers, partners &
investors - not on creating local presence
• May have to last longer before realizing an exit
• These are all significant hurdles for effective HR and
recruitment
Business Sherpa Group
6. What has changed…
Some additional pressures:
• Finding people has never been easier; finding talent
has never been harder
• Social media for professional use has been fully embraced
and now is being exploited – creating a lot of noise
• Supply and demand – lingering tech bubble in Silicon
Valley could become a threat locally
• Time and bandwidth pressures have not lessened!!
Business Sherpa Group
7. HR in start-ups – getting it right
Small companies can be ‘best-employers’
through:
1. Effective planning
2. Discipline with best practices will save $$,
time and build the best team and culture
3. Strategic talent sourcing vs. recruitment
Business Sherpa Group
8. Business Plans & HR Plans – usual approach
HUMAN
RESOURCES
MARKET
• More
of
a
budgeCng
• Customers
exercise
than
• CompeCtors
organizaCon
plan
• Partners
• Headcount
• Influencers
• Maybe
a
Ctle
Product
• posiConing
• Maybe
a
level
SoluCon
FINANCIAL
Service
TECHNOLOGY
• Business
case
• Features
&
specs
• Pricing,
costs,
margin
• Technical
milestones
• Resources
needed
• Schedule
&
road
map
• Investments
required
• What
it
will
look
like
• Budget
• What
it
will
do
Business Sherpa Group
9. Organization Design Life Cycle
Strategic
“DEFINE”
• Founders
and
early
staff
take
on
mulCple
roles
• Usually
a
build
up
of
technical
resources
(sr.
level)
Operational
• Selling
is
performed
by
CEO,
CTO,
founders
“PLAN”
• Board
–
focus
on
direcCon
and
advice,
supporCng
team
to
achieve
early
proof
points
Tactical
“DO”
Formation
• Proof points
• Get resources
• Achieve milestones
• Early customer engagement
Business Sherpa Group
10. Organization Design Life Cycle
• ExpectaCons
focus
on
customer
Strategic engagement
“DEFINE” • Technical
team
may
be
pulled
into
more
customer
based
acCviCes
• Timelines
Cght
for
product
and
technical
deliveries
Operational • AddiConal
financing
requirements
“PLAN” arise
• Board
–
expectaCons
increase
around
customer
acCvity
and
accurate
reporCng
and
forecasCng
• More
business
operaConal
needs
to
Tactical manage
more
staff,
transacCons
and
“DO” reporCng
Formation Pre-revenue
• Proof points • Product ready
• Get resources • Customer engagement wins
• Achieve milestones • Clarity on forecast & results
• Early customer engagement • Internal operations forming
Business Sherpa Group
11. Organization Design Life Cycle
Strategic
“DEFINE”
ExpectaCons
Operational in
all
areas
“PLAN” increase
and
intensify
Tactical
“DO”
Formation Pre-revenue In revenue
• Proof points • Product ready • Tight execution: design, build & delivery
• Get resources • Customer engagement wins • Internal operations smooth and robust
• Achieve milestones • Clarity on forecast & results • Strong performance/reporting
• Early customer engagement • Internal operations forming • Established customer base
Business Sherpa Group
12. So what!!!
Strategic
“DEFINE”
May
have
Individuals
who
covers
a
lot
of
territory
in
early
days
Operational
“PLAN”
Tactical
“DO”
Formation Pre-revenue In revenue
• Proof points • Product ready • Tight execution: design, build & delivery
• Get resources • Customer engagement wins • Internal operations smooth and robust
• Achieve milestones • Clarity on forecast & results • Strong performance/reporting
• Early customer engagement • Internal operations forming • Established customer base
Business Sherpa Group
13. So what!!!
Strategic
“DEFINE”
In
Cme
will
only
be
able
to
cover
porCons
of
requirements
Operational
“PLAN”
Tactical
“DO”
Formation Pre-revenue In revenue
• Proof points • Product ready • Tight execution: design, build & delivery
• Get resources • Customer engagement wins • Internal operations smooth and robust
• Achieve milestones • Clarity on forecast & results • Strong performance/reporting
• Early customer engagement • Internal operations forming • Established customer base
Business Sherpa Group
14. So what!!!
Strategic
“DEFINE” Leaving
significant
criCcal
gaps
Operational CapabiliCes
“PLAN” may
be
limited
in
the
face
of
greater
expectaCons
Tactical
“DO”
Formation Pre-revenue In revenue
• Proof points • Product ready • Tight execution: design, build & delivery
• Get resources • Customer engagement wins • Internal operations smooth and robust
• Achieve milestones • Clarity on forecast & results • Strong performance/reporting
• Early customer engagement • Internal operations forming • Established customer base
Business Sherpa Group
15. Impact on the company.
Ø Leaders drawn into day to day operational activities….not out in front of
customers enough
Ø Leaders with a huge number of direct reports
Ø As scaling pressures increase – response is to add more bodies
Ø Start seeing major bottlenecks in some roles (doing too much and too many
decisions flowing through one individual)
Ø Titles for early stage leaders – blocking senior leader hires at a latter stage
Ø Mix of titles (reflecting what was offered vs. organization plan) – confusion
over reporting, responsibilities, career path
Ø Board expectations not being met (reporting, performance)
Ø Challenges in hiring sales – sometimes too early, sometimes wrong DNA
Ø Lack of separation of roles leading to weaker strategic decisions e.g. product
management - development -sales
Business Sherpa Group
16. Plan the organization - not the headcount
So in planning the organization:
Ø Consider the potential future critical gaps – feature these into your plan
Ø Also as you bring people in at different stages, consider if these hires will
also leave gaps later on
Ø Consider that the requirements for planning, reporting, coordinating will
increase – these will be important resources
Ø Individuals performing multiple roles will need to eventually gravitate to
fewer or one…… plan to build in for separation of role
Ø There will always be the need to be looking forward from a market and
technology perspective and at the same time address the market and
technology now
Business Sherpa Group
17. Features of strong organization planning
Key
Run
the
Define
‘What’
Build
Reach
Deliver
Design
FuncCons
business
market
technology
&
Test
&
Sell
&
Support
Generally
Marketing
External
& Comms
Prod. Head of
Facing
CEO
Mgmt.
CTO
Head of R&D
Head of Ops.
Sales
Customer
Support
&
Sr.
Head of Design Head of
Prod.
Leadership
CFO
Bus. Dev.
Market.
R&D
Leaders
Manufact.
Sales Eng.
Prod.
Bus. Dev.
“Define
&
Market.
Plan”
Marcomms
Logistics
PM
Install & Test
Generally
Controller
Manuf Eng.
Mark. Supp.
Product
Market Engineers
Internal
Accountant
Technical Supply chain
Research
Scientists
Support
Office Mgr.
planners
Lab Tech
Sales Eng.
Facing
HR
Techs.
Test Tech
Media
Trainer
Marketing QA
Customer
Purchasing
Research
Research
collateral
PM
Support
“Do”
IT
assistant
Relations
assembly
Sales Supp.
Business Sherpa Group
18. Financial
Technical
Customer
Milestones
Milestones
Milestones
Milestones
Organizational
Seed Formation
Early Proof of
CEO
CFO
CTO
(P/T?)
PLM
Customer Funding Concept
BD
Lead
HR
(P/T?)
Series A
Sales
V.1
Customer Product
R&D Sr. R&D
Trials
BD/ Marcomms
QA
Company
Launch Strategic
SE s
V.1 GA
Revenue
R&D
Product
Int./Jr.
Strategic
Admin.
Support
Sales
Customer
(Hunter)
Sales Series B
(F/T)
VP
CFO
Repeat V.2
Sales
Sales Product
+ Margin
Revenue
New
Sales
VP Accounts
(Farmer)
Marketing V.2 GA
Product
Yearly
Accountant COO?
Repeat Revenue
Sales Growth
HR
(F/T?)
Sales
Support
New V.1
Accounts Series C Sustaining
Repeat Quarterly
Sales
Support
Customer
Revenue
Growth
Integrating Organization Plan & Business Plan
New V.2
Accounts IPO/M&A Sustaining
Business Sherpa Group
19. Executing on a plan – discipline & best practices
Ø Thinking about organization – sets foundation for many HR best
practices:
Ø Job levels and compensation planning
Ø Clearer understanding of what is required in roles
Ø More compelling job descriptions
Ø Effective sourcing and recruitment
Ø Other foundational HR best practices critical for optimizing
performance:
Ø Setting out employment terms, policies and practices
Ø Looking at total rewards; not just salary – benefits, options, career growth,
incidental rewards
Ø Performance management
Ø Employment agreements, protecting IP and confidential information
Ø Professional development & employee engagement
Ø Not out of reach – many ways of achieving best practices
Business Sherpa Group
20. Finding talent:
Strategic Sourcing vs. Recruitment
Conventional sourcing
BUT this is a very strategies really only
competitive market! target active or near-
active candidates.
NEAR-ACTIVE ACTIVE
PASSIVE CANDIDATE CANDIDATE CANDIDATE
Career
Sa'sfac'on
Factors
Like
People
Happy
in
Job
CompensaCon
SaCsfactory
Career
is
growing
Learning/having
new
experiences
ExciCng
Work
Fulfilling
other
needs
(altruisCc)
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21. Strategic Sourcing vs. Recruitment
NEAR-‐ACTIVE
NEAR-ACTIVE ACTIVE
ACTIVE
PASSIVE CANDIDATE
PASSIVE
CANDIDATE CANDIDATE
CANDIDATE CANDIDATE
CANDIDATE
Perfect
Candidate
Active
Near
Active
Active
Active
Near Active Near
Active AcCve
Active
Near
Active Active
This approach ignores a very Near
AcCve
This approach is not large addressable market Near
AcCve
Active AcCve
AcCve
Active Active
targeted to the perfect Active
candidate for the Active Active
company. Near
Most sourcing draws in Active Active
Active
those actively or thinking
about a career change. Active
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22. Strategic Sourcing & Recruitment
NEAR-ACTIVE ACTIVE
PASSIVE CANDIDATE CANDIDATE CANDIDATE
Effective Recruitment
Campaigns
CRM – Candidate Relationship
Management Program
Active
Active
Near
Active
Business Sherpa Group
23. HOW - Strategic Sourcing & Recruitment
Understand your perfect candidate!
Same principles as understanding your customer
SEGMENTATION
• Research the profile of the perfect candidate for each role
• What are the attributes, behaviours, career patterns and indicators of high
potential
• What are the relevant career satisfaction factors
Ø This will inform key messages to these target candidates
Ø AND channels to reach them
Business Sherpa Group
24. HOW - Strategic Sourcing & Recruitment
Understand your perfect candidate!
Same principles as understanding your customer
MESSAGING
• Based on what you know and what you discover – develop the messages and
brand that speaks to these passive candidates
• GOAL is to implant the idea of your company as a career choice to all passive
and active ideal candidates
• This messaging will be heard through branding, recruitment activities,
marketing programs, speaking notes, and on-line activities and promotions
Business Sherpa Group
25. HOW - Strategic Sourcing & Recruitment
Understand your perfect candidate!
Same principles as understanding your customer
CHANNELS
• Based on what you know and what you discover – develop strategic sourcing
programs that address a full spectrum of channels to REACH the active, near-
active and passive candidates
• Develop plans and programs with a view to:
Ø find talent
Ø nurture relationships
Ø convert passive candidates to active candidates
Ø close on perfect candidates
Business Sherpa Group
26. HOW - Strategic Sourcing & Recruitment
Understanding who you are targeting; what they care about and how to reach them
will result in:
1. Clarity on what a successful candidate looks like for your organization
And avoid hiring based on what skills present themselves
2. Creating a compelling job posting that will speak to the best candidates for
your company – giving higher likelihood of good matches
And avoid generic descriptions that cast a wide net and loses the interest
of your highest potential hires
3. Allows you to roll out an effective recruitment campaign that will reach the
target candidates that are best for your organization
Avoid shotgun approaches that can be noisy and expensive that miss
reaching your high potential hires
Business Sherpa Group
27. Effective Recruitment
Tight Execution is Key
• Know what you are looking for and when
• Think of a highly targeted approach
• Process from start to ‘in-seat’ will generally take no less than six weeks
WITH all stars aligning – plan for 2 months or more if highly specialize role
• Think before you act – a little preparation will make the effort much more
productive
Focus in on a tight plan in the
context of a bigger picture
CEO HR QA Admin.
Accountant COO?
(P/T?) Support HR
CFO
(P/T?) Sr. R&D CFO (F/T?)
Organizational R&D Int./Jr. (F/T) VP
CTO Marketing
Milestones Lead R&D Sales Customer
PLM
Marcomms VP
(Hunter)Sales
Sales Sales Support
SE s (Farmer) Support
BD/Sales
Business Sherpa Group
28. Sourcing – a new world.
There is a LOT of noise!!!
High Cost
Process
Executive Search
Recruitment Firms
Internal HR
Employee Referral
Program
Job Board
Social Networking Employee Trusted Individual
Low Cost Recommendations Word of Mouth Endorsement
Process
Low Credibility High Credibility
Sourcing Sourcing
Business Sherpa Group
30. Social networking tools
Pro’s Con’s Tips
Huge reach in all geographies Volume is overwhelming Filter your search in terms of
geography and use additional
filters
Can reach specific individuals who Will be contacted by many who Use In-mails to send customize
seem to be a good fit think they are a good fit messages to candidates of interest
AND follow up
Can post jobs Any posting will get a huge Compelling description that speaks
response from candidates around to the candidate you want to reach
the world will allow for easier filtering
Can target communities by Some user communities shun Preferable to have outreach from
connecting with user groups and recruitment efforts someone in the company
using other social media
Some user groups have job boards
Can see recommendations on Some have become expert at Filter the recommendations – which
individuals getting referrals from everyone – ones do you trust
more noise
Still do your own reference checks
Lots of statistics to look at about You have to read into these to Read with a note of skepticism –
companies and individuals understand what is self-promotion always do your own due diligence
vs. legitimate signs of excellence
Business Sherpa Group
33. Social Networking Tools – Best Practices
Ø Post your opportunities on your corporate Linked In and personal LI
Ø Push out to target communities
Ø Search and contact those of interest with In-mail or call; customized
contact only
Ø Trust your own networks – with a critical eye
Ø Consider Ad-words to create presence in relevant communities
Ø Post messages or tweet opportunities
Ø Give attention to your company’s corporate profile
Business Sherpa Group
34. WRAP UP
The Case for Candidate Relationship Management
Ø Increasing competitive pressures
Ø Sourcing tools creating a lot of noise
Ø Recruiters – still the most expensive option
Ø Small teams = more accurate recruiting
It is not hard – you know your perfect candidate IF you think about it in
advance!
Ø Use this knowledge to describe what you are looking for and what you offer
Ø Use this to set a sourcing strategy – who to target, where to target and what
messages to use
Ø Use this knowledge to screen and select your perfect candidate
Ø Manage relationships with passive candidates – let them know about you BEFORE
you need them and before they think about career changes
Business Sherpa Group
35. WRAP UP
The Case for Candidate Relationship Management
Ø Similar concepts to Customer Relation Management principles
Ø Once you identify high potential targets – you want to nurture the
relationship
Ø Let them know about you
Ø Contact them periodically with your news
Ø Network with them
Ø Let them know about you before they are thinking about a decision on their
career
Ø This can be as sophisticated or as simplistic as you wish – the goal is
the philosophy of nurturing relationships – founded on knowing your
high potential candidates
Planning the organization & knowing what
you want and need will ultimately drive
TALENT MANAGEMENT SUCCESS !!
Business Sherpa Group