How To Expand Your Startup Team But Keep Costs Low

The ultimate aim of any startup is to grow as sales do. This might mean buying new equipment and software to make processes more efficient, and it might be necessary to employ staff to help you expand your capacity.

Whether you’ve hired staff before or not, expanding a team is a daunting prospect. There are many pitfalls to avoid. Statistically, just under half of all new hires fail within 18 months of starting, and the average cost for a new employee is approximately £50,000 in the first twelve months.

A failed new employee can be a costly mistake that can drain your startup of financial resources.

Also, a new member of your team could disrupt the current harmony that exists within your business. If they don’t have the right ethics, they might affect how customers see your business and damage you startup’s success and growth.

The worst-case scenario is that the new employee forces an established key employee to leave your business. The consequences of this can be disastrous.

FoodtoEat is a perfect example of how bad hiring can harm the success of a business in the short-term. The online ordering service gives consumers access to different food vendors of varying size. She charges the food outlet just ten cents for every order.

The founder, Deepti Sharma Kapur, wanted to hire a sales team, but her choice in sales team proved costly. She hired people who were good salespeople but didn’t understand her business’ culture, industry or the company’s long-term goals.

In the end, she had to let people go. A distraction that you don’t want as a startup.

If you want to avoid these mistakes, then take a look at the tips below. They will help you hire more efficiently and save costs.

  1. Consider Why You Are Hiring In The First Place

When you are expanding your startup team, you need to ensure you have the right reasons to hire in mind. There are many different reasons why you might want to expand including:

  • Access to a better or more diverse skill sets.
  • To increase production capacity.
  • To allow you to concentrate on a set of business-critical tasks.

However, it’s not wise to expand your startup team just because you have the funds to do so, or so you can do less work.

In addition, you should consider whether the costs of expanding the team will benefit you. Could you be better off outsourcing or investing in technology or software to help improve your workflow?

  1. Consider Why Candidates Will Want To Work For You

The environment in a startup is often close-knit and this can be very appealing to a lot of job seekers. As the business succeeds, everyone can feel a sense of achievement and this thrill can be very motivating.

However, as you grow, motivation can be trickier. So, the question is, why are job seekers going to apply and stay with your business? Money isn’t always the best motivator.

So, what can you offer them that will inspire the best job seekers to work with you to achieve your company’s goals? One option is to offer more holiday than is required by law.

You should certainly make sure you have a great business location (within budget) and workspace for the potential new hire. Being out in the countryside might be nice for lunchtime walks, but it isn’t always the best option for ease of access.

  1. How Are You Going To Cope With Holidays And Absent Employees?

When expanding your team, you might think handling holidays and sickness is going to be easy. You can think again. Imagine two employees wanting to take time the same time off, how do you manage the dispute without upsetting them? Or perhaps one employee is sick when another is on holiday – how can you get the work done now when you are committed to other projects?

The answer is not to just to hire more people. For holidays, you need a holiday application process that is transparent and fair. This should be managed without the use of emails as these can go astray. If you are struggling, you could consider hiring a temporary employee for some tasks.

  1. Are You Hiring The Best Candidates

Do you know what makes the best candidates? It isn’t just skills as these can potentially be taught. The best candidates have the right attitudes and ethics that match the current culture of your business and your business’ long-term goals.

There are advantages to this approach. First, those with the right skills have set processes and ways of completing tasks. These might not match your current company’s way of doing things and can annoy you or current staff.

Secondly, two or more different sets of attitudes within a business culture can confuse customers. This can stop them purchasing from you.

By hiring the same attitudes throughout the business, your business can have standardised ways of behaving towards customers and other stakeholders.

In addition, a large majority of failed new hires is due to the organisational culture conflicting with their personal ethics.

  1. Do You Have A Good Onboarding Process

You can’t just expect a new employee to jump into the business and immediately be an effective member of your team. It will take time, sometimes a lot of time. A good onboarding system will help to reduce that time and will help the employee feel like part of the team, acclimatise them to your organisational culture and can reduce staff turnover.

Many onboarding processes in businesses are insufficient. They either give no direction to the new employee, embarrass new employees with rituals or break them in too early.

Think carefully when you are looking to build your team and decide how you can get them familiar with their responsibilities and your business.

  1. Are You Hiring Too Quickly?

Sometimes the need for a new employee can be urgent. You have a lot of new orders coming in and not enough productivity to complete the work. But that doesn’t mean you should rush hiring. This is when mistakes are made which can be costlier than delaying the work or asking other team members if they would like overtime.

Consider your hiring process and how long you really should be taking to find the perfect employee. It’s always better to wait for two weeks to invite candidates back for a second interview than having to start the process all over again because the original candidate turned out to be unsuitable.

  1. Be Organised

One of the biggest recruitment failures is not being organised. Imagine have a pile of applicants on your desk or scattered in your inbox. This kind of organisation is a nightmare and can lead to the loss of key candidates.

Instead, investing in recruitment software or at least a better recruitment workflow can mean you aren’t wasting time searching for a CV or missing out on that perfect candidate.

  1. Ask The Right Questions At Interview

The final tip to improve your recruitment is to ask the right questions at interview. So many hiring managers don’t know what to ask or how crucial the information they are getting is. For instance:

  • Their best achievement indicates their values.
  • Why they applied for the position gives insight into their motivation.
  • Their top skills demonstrate how they feel about the job and their fit within your organisation.
  • How they will approach their first day informs you about their priorities and how they approach unfamiliar scenarios.

So, in your next interview, be sure that you are asking the right questions to identify essential personality and skill traits. Remember always to take notes in the interview so you can analyse the answers later.

Are You Ready To Hire The Best Talent For Your Startup?

If your startup is growing, you might need help. That often means hiring additional staff to share the workload and increase work capacity. However, the wrong hire can be costly. By taking your time and looking at your recruitment, selection and onboarding process carefully you can make sure you are hiring the candidate that’s best for your company.

This might not be the person with the best skills; but it might be the person who has the attitude to take your business to the next level.

How do you ensure you have hired the best candidate for the job? What questions do you ask in an interview?

Let us know in the comments below.

Amy Grant

Amy GrantVerified account

Reporter at CEOWORLD Magazine
Editorial Aide/Reporter at The CEOWORLD magazine. Nationally Syndicated Advice Columnist. Generally prefer dogs to humans. Loves dragons. New Yorker.
Amy Grant

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