Stressful moments can leave you thinking, “If only my startup had just one more employee!” But before you make a move, consider these five reasons to delay hiring your first employee.
Thinking of hiring your first employee can be equal parts exciting and terrifying.
On one hand, you’ll potentially be able to move forward and scale your new company more quickly. On the other hand, you may make the wrong decision — and basically light your hard-earned money on fire. After all, you’re new to this. So what are the odds you can hire the right person on your first try?
As with anything you start, you’re going to make a few mistakes before you get it 100 percent right. But if you take some time to educate yourself on effective hiring strategies, interviewing tactics and systemization, you’ll drastically reduce the amount and impact of the mistakes you make.
In the early days in my companies, we dealt with a lot of freelancers, contractors and task-based hires. It was cheap, but it was also time-consuming from a training and quality perspective. We didn’t have the luxury of using more knowledgeable hires because of a rock-bottom budget, so we had to get incredibly good at interviewing and systemization. The goal? Get everything mapped in such intricate detail that a 7th grader could do the job.
Even so, we were terrible at hiring when we started. Over time, we got better, and the lessons we learned have carried over now that we’re able to bring on more intelligent, experienced, and passionate team members.
In hindsight, I wish we would have waited until we had a few more things accomplished before hiring anyone. But you live and you learn.
You can learn from some of my own mistakes—here are five distinct cases when you should hold off on hiring for your new business. (Click here to tweet his list.)
1. You haven’t validated your concept
Don’t hire just because your company is struggling. Hire because you’ve effectively diagnosed that the reason that your company is struggling is you don’t have a specific role on board. For example, if you’re an e-commerce store and your shipping and logistics are backlogged; or you’re a SaaS platform and your site speed is poor, resulting in customer complaints and lackluster retention — you’ll likely be able to take big steps forward with a new hire.
But if you’re not making sales and you believe the reason why is that you don’t have a CMO, hiring probably shouldn’t be your first step. Instead, educate yourself to the point where you can realistically say that you’ve validated your concept based on real feedback and data from the market. If people aren’t looking to spend money to solve the problem your company solves, a CMO or marketing guru may plug some holes, but you’ll still be on a sinking ship.
2. You haven’t done the math on what position comes first
Don’t just hire somebody you think you need based on what other companies have. They are not you, and you are not them. The dynamics of your operation may seem to demand hiring of a customer support rep if your support queries are absurdly high. However, hiring somebody to fix the bug that all your customers are stumbling on may be a more cost-effective approach. While that new hire gets up to speed, you can pick up the slack on customer support.
Find out the costs of a new hire in contrast to the benefits you’ll gain when they begin to do their job. It doesn’t matter what the competition did — you really have no way of knowing if they made the right decision themselves. Instead, be diligent. Weigh your pros and cons before moving forward.
3. You’re not completely backlogged
I’m a huge proponent of hiring based on need. This means wait to make a hire until it’s essential for your business — such as seeing some sort of backlog in essential tasks that’s getting too long and arduous for your current staff. Don’t build out your staff for vanity reasons. Make sure that each new hire you bring on is well trained and fairly self-sufficient before bringing on anyone else.
But before you hire, make sure that your backlog can’t first be solved by implementing of systemization or automation that are more cost-effective than a new hire would be. For example, if you can implement a marketing automation tool for $300 per month that will allow your current team to be more efficient, you may be able to hold off on making a new hire for months or longer.
4. You haven’t mapped the job requirements and objectively interviewed multiple candidates
Just because you need somebody and you have the money to pay them doesn’t mean you’ll find the right person. Your job description seems like a small piece of the puzzle, but it can be immeasurably important for recruiting the right candidates — and keeping them once you’ve brought them on. Remember, hiring is a two-way street. Candidates don’t have to work for you if they don’t want to.
For example: if you suddenly surprise a new hire with duties that they weren’t briefed on in their job description, you may be getting what you wanted from the new hire. But the new hire likely won’t be getting what they wanted from you, and they may decide to quit. If you’re looking for somebody to fill a specific position, think hard about what you need them to do, and map out as much of it as you can before you even start the search.
5. You don’t have access to somebody experienced who can help evaluate your new hire early on
Even after you’ve done all of the steps above, it’s important to be able to evaluate the performance of a new hire with expert eyes. If you’re well-versed in the job you’re hiring for, you can do this quite easily. But if you’re not a software engineer but need to bring one on staff, you’re going to have no way of knowing how good of a job they’re doing for you.
You’ll still need to be able to tell if the new candidate you’ve brought on is the right fit, so look for a friend or colleague who wouldn’t mind looking over some of the more recent things they’ve done for you as a form of quality assurance. This should help you see whether somebody you’re now working with deserves their walking papers or stock options.
Travis Steffen is a viral growth expert who has started, scaled and sold six tech companies, and is currently the co-founder of both upshare.co and mentormojo.com. You can find him on Twitter: @TravisSteffen.