South-Western - Management  
Hire Staff: Don't Think Big and Other Tips for Picking Those First Few Employees
Topic Entrepreneurship, HR Planning and Recruiting
Key Words Recruitment, hiring, start-up businesses
News Story

Most start-up founders struggle with questions about where to find good candidates for their businesses, whom to hire and when to hire them. Ellen Rudnick, professor and executive director of the Polsky Center for Entrepreneurship at the University of Chicago Graduate School of Business says that there is great danger in moving too fast to add staff. Committing to benefits and salary can be expensive and if an employee doesn't work out and needs to be fired, it can mean not only severance pay but loss of productivity while trying to find a replacement.

Bob Marshall, a managing partner at Selby Venture Partners who has spent more than 40 years working with start-ups in Silicon Valley says that many entrepreneurs look to hire candidates with big business experience. However, these candidates might be so used to the corporate world that they find it hard to function in a smaller environment. The best candidates for start-up businesses tend to be those who are autonomous, and can take whatever project they get and run with it without a lot of hand holding.

Most candidates can be found through networking, but when networks are exhausted, entrepreneurs need other sources. Big job boards like Monster.com tend to generate too many resumes and may not bring the best matches. Smaller niche boards on websites that are used in the industry are usually a better source.

In deciding who to bring on board first, entrepreneurs should determine the positions that will help them to get their product to market. High level executives can wait until the company is up and running. You don't need a vice president of sales and marketing until you have a good product that is already selling. Other times, the product and location determine the types of candidates that would be best for the job. For example, a bakery called Baked in Red Hook, N.Y. needed bakers who weren't intent on making high-end, fancy pastries, but were interested in baking the perfect brownie. Ads at local culinary schools didn't turn up the right type of candidate, but a sign in the window and an ad on Craigslist did.

In many startups, services like accounting, marketing, public relations, and manufacturing can be outsourced or done by freelancers.

Questions
1.

Why is it so critical for small business owners to start small when they are making hiring decisions?

2.

What are some important qualities to look for in a candidate who would work out well in a small business?

Source "Hire Staff: Don't Think Big and Other Tips for Picking Those First Few Employees," The Wall Street Journal, May 9, 2005, pp.R7,R8.
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