An article by Om Malik in Business Week entitled Silicon Valley and the Talent Crunch was forwarded to me by a friend and caught my eye. It is an interesting read about Silicon Valley and talent in the area. He points out that early stage investing made up 11% of the deals in Q3 of 2010 vs. only 1% in Q1 of 2010. There is also the mention of other larger companies scooping up talent and possibly paying more than market rate to obtain them. He also mentions a good team, in other words good talented people, make a business succeed. This is true , but they can also make you fail. I do not disagree with his points or conclusions but let me dive deeper based on my experiences.
Attract Good People and Keep Them
This is the key, attracting and keeping good people. Here are a couple things I have noticed.
Attracting Good People
When a start up looks for talent they typically reach out to everyone they know in the area, they also look to their investors for referrals and may try head hunters as well. Getting someone you know into the office for an interview is typically an easy sell as they already have a relationship with you. However getting someone into the office who you do not know, is a talented individual and probably already has a job is an entirely different proposition. You have to sell them, or the investors do, or the head hunter you are working with does.
Convert Good People for Your Team
I have seen too many good individuals be turned off by a lack of follow through or a well thought out interview process. If you are bringing in a potential COO or VP or this/that and the other thing, you should do more than simply sit them in an office and have them meet with the office manager or front desk personnel. Also be sure that whoever does interview them can actually interview someone. Interviewing someone does not mean the interviewer tells them about themselves and then leaves. There are many resources on interviewing and do not allow it to be handed off to someone who cannot interview properly.
A small startup has no excuse for not having everyone interviewed by the CEO or another individual of the executive management team. Until the startup reaches a certain size the CEO should meet everyone. This is part of the sales process when attempting to recruit good talent. Everyone wants to hear the startups story and vision from the CEO, as well as who has invested and why.
If the CEO has done a good job of outlining their vision for the company the deal is not closed, assuming the business and CEO’s vision is a good one, and next the issue is the compensation package.
Compensation Package and Obtaining Talent
Many call it a compensation package because it is much more than a salary. An individual that has a high salary at a large company is probably going to be interested in a startup for many reasons. They want the excitement, more day to day responsibility, and the to be able to have a greater overall effect on the company. This means that items such as stock options or other equity vehicles will be more interesting as they can profit from their hard work. Therefore the additional responsibilities, equity, and feeling of making a difference make up the reasons why good talent will join a start-up.
Keep Good Talent
There are many ways to retain good talent. I will only point out one as I believe it is overlooked too often. That is that you must fire those that are not pulling their weight or doing their job. Please do follow the proper HR procedure and be sure to do it legally (that is my disclaimer). The issue is that if you release someone is not doing their job you probably realized it after their co-workers did. You need to address it immediately. Correct the problem, demote them, fire them, whatever is necessary to have them do their job and let others know that it is not acceptable. I have seen great people leave a company because they were upset after putting in their blood sweat and tears into the company they have to watch someone slack off, knowing that individual will profit eventually (hopefully) from their hard work. If you do not remove the bad apples the good talent will leave.
CEO is Responsible to Close the Good Talent
The term “close” is meant to mean the convincing of good talent to join the team and want to make the business succeed. This is ultimately the responsibility of the CEO who is to paint the vision, show their leadership and convince the good talent to join.