11 steps to create a
hiring plan for startups
An effective hiring plan is a blueprint for the whole recruitment team to hire the right talent. Manage it efficiently with Freshteam.
Hiring new employees takes up a significant amount of time, resources, and funds. And hiring the wrong employee costs organizations almost 2x the employee’s annual salary—for a startup, these issues can make or break its growth trajectory.
So it’s crucial for startups to have a proper hiring plan and determine the purpose of hiring. Know exactly how many employees need to be hired, and the budget for this plan. Follow these simple steps to create an effective hiring plan for your startup:
Before you set out to hire a new employee, establish the purpose. This step is crucial since one of the main reasons why startups struggle is over-hiring. Consider these questions:
Does this position have a short-term as well as a long-term requirement that can’t be skipped?
Can this role be replaced by an app or automation software?
Can existing employees take this up as an added responsibility?
Is the role well-defined and does it give the candidate ample opportunity for growth?
Can you hire someone internally rather than sourcing a new candidate?
How will this role contribute to the overall organizational goals (short-term and long)?
If your answer to all of these questions is yes, then it’s time to look for your new superstar employee with the next steps.
And one of the best ways to ensure that these questions are answered for every hire is to mandate the hiring managers to fill out a job requisition form for any position they’re looking to fill. Follow this guide for an efficient way to write and approve job requisitions.
The budget to hire the required employees varies from one startup to another. During the initial years, it’s always better to be aware of how much your hiring process is costing you and how much ROI is expected from it.
So once the job requisition is approved, look at the salary benchmark reports for the position—depending on how far above or below that benchmark your startup can afford to pay, you can assign the qualification requirements for the candidates.
The next step is to calculate the total spending required to attract the right candidates to apply for the position:
How much budget are you allocating for sponsored job postings?
Are there suitable candidates that can be taken from the talent pool?
Is employee referral a more economical way to hire for this role?
What referral bonus can you set aside for the role?
What tools do you need to spend on to manage the hiring process?
Do you need an external agency to take care of the hiring process?
What’s the budget for training the new hire, and their equipment requirements?
That’s a lot of questions to keep track of, and often startups find themselves spending way over the budget than initially planned. To avoid that, here are 9 ways to reduce your recruitment costs without compromising your quality of hire.
Here's the most important rule to remember when it comes to writing job descriptions: Do not write generic, overly complex, or vague descriptions.
It’s important to add your startup’s character to the JDs and provide a very clear and detailed description of the expected responsibilities and results from the candidate.
This acts as a good filter to keep unsuitable candidates from applying—and makes sure to attract the right candidates for the position.
Writing job descriptions manually can take too long. It may also have grammatical errors that would impact your brand image. To avoid that, you can leverage JD templates available on Freshteam’s free ATS, to speed up the JD creation process.
Either way, here are some tips on what your startup should include in its job descriptions (preferably drafted by the hiring manager):
Talk about your startup, its culture, goals, and people
Write the job description in first person/active voice
Talk about the role and its impact on your startup
Outline your hiring process and make things more transparent
Include an easter egg to automatically weed out applications that haven’t actually gone through the job description
While posting jobs on social media can generate some traction from prospects, job boards like LinkedIn, Indeed, ZipRecruiter, etc attract the best candidates. But it can become very expensive and time-consuming for startups to pay for each job board and juggle multiple tabs for every hire.
Good applicant tracking software (ATS) like Freshteam prove to be extremely useful for startups and small businesses. The ATS helps them manage all the job applications from every channel on a single platform—and they only have to pay for the ATS which can reduce the cost of hiring by almost 90%.
An applicant tracking system also enables startups to look at real-time data that shows them where their best candidates are coming from and which job board is giving them the best ROI. This helps in determining where to spend on sponsored job postings and which channels to focus on when hiring for new positions.
On average, each corporate job opening attracts hundreds of resumes, and you only end up hiring 1 . While your HR team is flooded with low-quality profiles, the good candidates are snatched away by the faster companies.
So how can your startup filter out candidates who are not the right fit for the job without wasting any time on them? Automatic Resume Screening. Good applicant tracking software like Freshteam automatically screens every resume you receive and rejects applications based on skills, education, experience, or anything that doesn’t meet your set criteria for every position.
For startups, this can reduce the hiring process timeline by almost 20%.
In the initial stages of considering a candidate’s profile, email or phone communication helps get a basic overview of the candidate’s interests and expectations. It acts as a quick way to decide whether the candidate is suitable for the next stage. This stage also requires no special tools and acts as a good way to build a rapport with the candidate early on without investing too much time or effort.
Here’s what you need to look for during your telephone interview/email conversation:
Gauge the candidate’s interest:
Check if the candidate is available for the interview and what drove them to apply for the role—this will help in understanding how articulate and goal-oriented the candidate is.
Clarify doubts or inconsistencies:
Are there gaps in the resume that you want to know about? Are they willing to move to your startup’s location? Are they clear about the expectations that come with the role? What are their salary expectations? This will help you know how much thought has gone into their application for your startup and know details that aren’t on their resume.
The catch-all question:
“Is there anything I haven’t asked but you think I should know about?” is a quick and simple way of knowing what is on the candidate’s mind, or if they were trying to conceal anything.
The interview process is usually 3 stages:
Assessment test
Technical round with the hiring manager/team
Culture fit
The number of rounds of interviews varies from startup to startup, but they can broadly be classified into the three stages mentioned above. With each round, while the number of candidates gets narrowed down, the probability of them working for you should go up—that’s how you know that with each round of interviews, you’re filtering out the bad candidates and are progressing with the right candidates.
The process, however, can be very time-consuming and chaotic without the right tools. Candidate screening tools like Freshteam help you manage the entire process end-to-end on a single platform:
Set automated assessments for each position you’re hiring for
Collaborate with the hiring manager and team
View the candidate’s history and interview notes
All of this from one place. This brings more accuracy, makes the hiring process more streamlined, and helps you close on the right candidates faster than ever—and minimizes the amount of manual effort required. This is the startup hiring essential.
Through every stage of the hiring process, there might be candidates who drop off—and these might be candidates that you really liked. But this is normal, especially in the case of startups. But remember, the longer your hiring process is, the more the drop-offs at each stage. And make sure to not waste too much time following up with candidates who are disinterested.
Remember:
Every funnel has drop-offs
Candidates are interviewing with multiple companies at the same time, not just yours
Follow up 2 times before you give up on a candidate
Background checks are crucial—never skip this step, because remember, hiring the wrong employee would mean a waste of time, training costs, re-hiring, and the losses sustained during the replacement process. Not to mention any issues that the bad employee may cause. The references given by the candidate may not be forthcoming about negative feedback—you must coax it out of them. While this process may seem time-consuming now, a good HR software for startups like Freshteam can fully automate your background verification process.
It’s crucial to complete this stage as quickly as possible, especially so for startups. An offer management software helps you do just that—it streamlines the entire process by:
Providing built-in offer letter templates
Automating approval workflows
Enabling team collaboration
SLAs for offer rollout
Paperless document signing
Metrics that help analyze offer acceptance and rejection rates
While your offer management software takes care of the process, remember to add a human touch to it as well by:
Selling the company vision and the role
Offering conversations with other members of the team
Explaining different components of the offer over a call - especially ESOPs (employee stock option plans)
Getting a verbal confirmation from the candidate before sending the offer letter for document signing
Offering to talk to them for any clarifications
Note: If a candidate doesn’t accept within 2-3 days, then it’s probably not going to convert. And if you find your startup losing many candidates at this point, you need to benchmark your offers.
A well-planned, streamlined onboarding process significantly boosts the employee retention rate at your startup. This is the stage at which you need to introduce the new hire to your startup’s culture and work environment—and if this is a good, memorable experience, the employee is likely to stay with your startup for a longer time.
Use employee onboarding software like Freshteam that takes care of all the paperwork and routine onboarding tasks while you have more time than ever to build real relationships with your new employees.
A hiring plan is the process of laying out all the components that go into your hiring—this includes the need to hire for the open positions at your startup, the ideal candidate profile that you’re looking for, your hiring budget, what channels of hiring you’re looking to source candidates from, and everything else that gives your recruitment process better chances of success.
Bad hiring decisions are the third leading cause of startups failing. Research shows that companies that made a bad hire wasted $14,900 on average—and that’s an expensive mistake. So taking a well-planned approach to hiring can contribute greatly to a startup’s success, while poorly planned hiring can impact its growth trajectory—which is why it’s imperative for startups to have a good long-term and short-term hiring plan.
Ideally, the founders and CEOs of the startup should build the hiring plan before they begin building their team. This will ensure that the startup’s funds are allocated toward key roles in the early stages of hiring. In case the hiring plan is being created after the initial hires have been made, founders and CEOs must work with the hiring managers, the finance team, as well as the HR team to create the right hiring plan and implement it well.
Tools like applicant tracking systems (ATS), resume parsing and candidate screening software, and onboarding software can be very useful to reduce the overall cost of hiring significantly, reduce the hiring timeline, as well as ensure good employee retention rates. More than 8,000 startups use Freshteam to achieve all of this effortlessly. Take a free trial and experience Freshteam for yourself!
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