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:

1. Identify the need to hire

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:

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.

2. Allocate the hiring budget for your startup


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:

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. 

3. Craft a detailed job description

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):

what to include in job descriptions what to include in job descriptions

4. Source candidates from job boards

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.

How to source candidates How to source candidates

5. Filter out candidates who are not the right fit


How to choose the right candidates How to choose the right candidates

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%.

6. Approach candidates via mail or phone

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:

7. Conduct interviews

The interview process is usually 3 stages:

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:

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.


8. Manage drop-offs

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.


9. Conduct thorough reference/background checks

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. 


10. Manage offer letters

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:

While your offer management software takes care of the process, remember to add a human touch to it as well by:

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.

11. Onboard the new hire


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. 



1. What is a hiring plan?

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. 


2. Why do startups need a hiring plan?

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.

3. Who should build the 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. 


4. What tools do you need to build a hiring plan for your startup?

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!