What makes People and Talent different for startups?
CLARE MULLEN (CM): In larger organisations, the function is too far removed from the coalface of the business, and the talent/people team don’t ever get a full understanding of the organisation. So, when there’s a problem, it’s harder to get to the bottom of it.
In startups, the Talent or People role has a much wider remit. You have to guide and educate the execs as much as those in the broader team. My role is so much more in their day-to-day life – even their personal life.
GINNI LISK (GL): I agree. I was studying a few years ago and a people director gave a talk that really resonated. She talked about professionals in our field not ‘being given a seat at the table’ in larger organisations and the need to drag it to the table yourself if the space isn’t being made for you in the executive ranks.
In startups and high-growth ambitious cultures, founders and leadership teams tend to want this input. They understand the person responsible for people is closer to their vision and mission and their employees. They know their early-stage business needs to get its hiring and people management right to succeed. But that doesn’t mean the coaching is always easy to hear!
How should entrepreneurs consider Talent when starting a business?
CM: Actually, they naturally don’t – everyone waits too long and sometimes even until their team is 30-50 strong. I think that happens because most don’t realise how difficult a hire it is to make.
When they are thinking about product, they need engineers, a designer and everyone to make their product happen. But they aren’t thinking about how to attract those people to begin with, or how they might deal with difficult situations that come up.
The Talent and People role is not a direct money-making remit, so it’s the last thing they think about. It’s too often seen as a service function. Sometimes the office manager is suddenly the HR person, and it’s not until there’s a people issue and they need to bring someone else in.
When talking to founders about best practice or possible issues they might face, often the response is “we don't have that issue here”. But you don’t have the issue until you do. My role is to get you ready for scale, and all the trappings that come with that – and be one step ahead!
GL: I think the real shame in those situations is the lost opportunity. It’s almost impossible to retrofit culture, values, standards of working and your general approach to business change and business operations when you realise you’ve created a culture that doesn’t work – or one that places profitability above people.
When should you make a Talent or People hire?
CM: The first time they usually start thinking about this is past Series A. Until then, it’s all achieving their growth targets and hitting the numbers and generating revenue, building customers.
What they should be doing is getting that person in prior to all the growth, so they can build that growth correctly without losing focus on the people working for the company.
The People and Talent person will save your business money. You may spend lots on agencies and mass hiring – but if you have a person in-house, they will do most of it directly and save you a fortune. It pays for itself if done right.
So often when we start working with someone, you have to repair bad habits and bad design, and have to exit people who were in the business and not succeeding. And you come in with a tough job because you’re potentially fixing everything that is broken before you can start adding new, more appropriate initiatives.
How would you tell founders to prepare?
CM: Consider what you are hiring for. A recruiter can sit on site and fill your roles, but they may not have the knowledge or hands-on expertise needed to develop your team, implement processes and build out your values. The People and Talent all-rounder is a rare find.
As soon as you get to the point where you know you need 10-15 additional hires, you should be thinking about this. That person must have a seat at the table and have full exposure to your business.
You need to ensure you’re being compliant and working with best practice from an employment law perspective, too – sometimes founders don’t check this.
GL: Yes, or end up paying significant fees to lawyers for a level of advice a qualified people professional should be able to provide in-house. I think that Clare makes a great point about contractors or even a person in your network that you can go to whose advice you trust.
I often provide our portfolio of startups with a sounding board. I think there is reassurance in getting best-practice advice and a qualified eye, and if that’s all you need for the time being, that’s fine. Openness to being coached on people management matters is the key.
Are there rules on what good talent looks like?
CM: When it’s a very small business, too often it can become about getting a bum on the seat, who can fulfill the particular job. But in a startup, you’re asking so much more of that person. Their remit is undoubtedly larger than a comparable role in a more ‘established’ business and they are going to feel all the highs and lows at much closer proximity.
It’s more about thinking: can they really do this job, are they going to stick around, can they deal with the stress and are they going to stay motivated? Are they scalable?
Questions to consider include:
- What are you looking for – junior, senior? What’s the skill level? If they are early in their career, do you have the team to support them?
- Affordability – when you’re a small business, you want as much bang for your buck, but seasoned pros may help your business grow rapidly and they don’t come cheap. Think about which roles you most need this talent for. Look at other businesses similar to you and how they are doing it.
- Team-building – does that person have the skill to build the team under them over time? Half the time, yes they can code, but can they be a CTO? No. Don’t bring in people and give them ridiculous titles from day one.
GL: I think a big dose of what I call ‘hiring humility’ is a benefit. It’s competitive out there, and in tech it can be paralysing for an early-stage business to create a wishlist that is prohibitively difficult to find and to recruit.
Nobody enjoys trying to fill a role that’s been open for months and months. As a CEO or founder, there is no sense in being too proud and having unrealistic expectations.
Of course you need a skilled person, and shouldn’t compromise on ability, but what you really need to prioritise are individuals who love the problem you’re trying to solve, are hungry and have a personal incentive for scaling with your business.
Is there a struggle between incentivising acquisition and retention?
CM: Candidates are becoming savvy in areas like equity. Years ago it was a big draw, but they are realising: who do you know in London who got rich through their equity? Almost nobody.
This makes it even more important that if you promise equity, the person has the skills to become that leader and to experience the promotive path towards that within your business. You also need to make sure you can provide the support to make it happen.
What you can attract talented people with is the option of scaling their career in a way they won’t be able to do in a corporate environment.
Don’t be afraid to talk about the challenges you face and the problems you are trying to solve. Most people who work in tech do so because they are passionate about it and love solving real technical challenges. Your team will only buy into you if they see you as a human being. Don’t shy away from that.
GL: This is a huge area for discussion with founders. It frustrates me when I see business leaders trying to manufacture a compelling job offer by using retention and long-service-focused initiatives to top up what they can put on the table here and now.
Incentivised ownership is great for fairness and for driving meritocracies; you want people whose impact in a smaller business is more likely to see them achieving an ultimate end goal if they run with that ownership. But these big, financially rewarding exits are rare.
Culturally, they should remain what they ultimately are: aspirational.
What are the common mistakes you see?
CM: It’s easy for founders to have their ego massaged. I’ve seen first hand founders interviewing, and being sold on someone who has come in and focused all their time and energy on telling a founder how fabulous they and their business is.
It surprises me how much I see that, and how much founders, perhaps not always consciously, value that above all else. Founders are sometimes unable to spot that weakness within themselves.
Don’t look for yourself in a hire. Look for someone who brings something to the table you (or your team) don’t already have. It’s cultural enhancement over culture fit.
Your most successful team is the one that tells you when you are getting something wrong, who can give you feedback and debate with you, not just tell you how wonderful you are.
As a CEO and founder, your role is to work yourself out of a job! Build a team that knows more than you, and champion that. You will be the founder everyone talks about for the right reasons.
When building an exec team, you can bring in experienced execs, but if they have come from FTSE 100 or large corporates, they have never been that close to the coalface.
Look for solid, hands-on experience and don’t be biased by candidates with big labels behind them who are going to tell you everything you want to hear all the time.
GL: Diversity of perspective is so important in small organisations and in small leadership teams. I totally agree that familiarity bias happens with founders. Not necessarily in such a conscious way as to hire in their likeness all the time (although that certainly is a problem) but going back to the hiring humility I mentioned earlier, getting this right really requires holding a mirror up to yourself as a founder.
If you’re not prepared to be challenged, I’d go so far as to say that you should delegate hiring, people and culture to someone else.
Do you have any advice for interviewing for startups?
CM: When founders interview execs, it tends to be a schmoozing process. A million dinners with an individual but no grilling them as they might do with a junior salesperson. You need to put exec hires through as much due diligence as you would junior-level hires.
When interviewing more junior and mid-level hires, sometimes they just want a foot in the door, and claim they will do anything in order to get there. Then it doesn’t work for them. It is crucial to make sure through duty of care to your business and to your candidates that you hire people into roles where they will actually thrive.
One of the questions I always ask is: What do you want to do when you leave us? I want to know why they are picking this particular role, not just the company. I also want to see that they can have a positive discussion about them one day leaving and how this opportunity fits into their motivations longer term.
GL: Clare has really outlined the core of the problem for so many startups. It’s important to have a mutual perspective; it’s not just about you getting the best person on the market for the salary you have and worrying about a year down the road when you get there.
Effective interviewing is a skill so many aren’t great at. It’s a muscle you need to exercise, and for those of us who aren’t doing it all the time, it can be an intimidating challenge. Getting better at it means you will get better at making meaningful hires.
How has People & Talent changed for startups in recent years?
CM: I’ve seen the expectations of founders increase over the years. The salaries for roles and the expectation of what that buys are hugely different. I think that naturally comes from not putting the People role at the core of the business.
In more recent years, we’re dealing more with open dialogue about mental health and wellbeing. About discrimination. About Me Too culture. A lot of leaders haven’t had enough experience of how to deal with it adequately, so there’s a gap in education there.
Balance, appreciation of personal lives and individuality becoming a total part of the workplace is the new norm. Founders and leaders in startups are having to deal with these challenges and make decisions often without the support of a dedicated People professional.
There’s also a real lack of talent as we’re seeing a ‘Brexodus’ of them leaving the UK. It’s much harder to fill roles quickly.
GL: I’m experiencing the same challenges. Salaries are tricky and being prepared to think creatively and positively about budgeting for hiring is a conversation I have regularly.
People in the UK work some of the longest hours on the planet as it is. In a startup, the likelihood of you putting in this kind of significant additional graft, is high. We all know that and it’s what we signed up for.
The businesses doing really great things with their talent recognise that from a top-down perspective. They verbalise their recognition of hard work and reward their teams by embracing individuality and the flexibility needed to enable their people to do their very best work.
We need to get away from the traditional, old-fashioned divisions of having your work head or home head on at any given time, because that’s not how people exist nowadays. The lines are blurred and work needs to be viewed as fulfilling, psychologically safe and inclusive.
That depends on founders placing value on these themes, trusting people to manage their lives and time, and supporting their work component to enable their happiness in life generally – not just while they’re in the office.
I think providing that support is a mandatory responsibility as an employer.
Where do you think People and Talent will go for startups next?
CM: I think People and Talent functions will need to be even bigger to deal with the challenges. We’re just getting started. At the moment, you cover everything – recruitment, daily HR, learning and development, leadership coaching, culture and values. But the only way to be more successful is to build out that function.
If you look at professional qualifications, there’s CIPD. This covers the core subjects, but I’d like to see more training to allow individuals to gain expertise in more current themes businesses are facing. CIPD seems outdated and not in line with the modern workforce. There needs to be something else on offer.
Mental health is a great demonstration of where we need properly trained professionals to deal with this. We’re doing our best, but nobody in a startup is a mental-health expert at the moment.
It’s foolish to assume that people won’t burn out. And when they do, it’s often in dramatic fashion – once it has got to that point, businesses tend not to be able to provide support. And more often than not, the response is for the business to get rid of that person.
Especially in startups, founders rely on settlement, ways to part ways amicably and exiting people instead of dealing with the problems at hand.
GL: I agree. Companies should invest in supporting their employees from day one. Providing your people with options to discuss problems; to redress the balance if things get out of sync and burnout starts to present itself could help to avoid the dramatic end results Clare mentions.
Businesses currently have the option to pay for that support via employee assistance programs. Nothing beats a human being working in your business, driving that awareness and being trained to provide in-house support.
I am CIPD-qualified and it is a great practitioner perspective on HR Management. You’ll notice however that neither Clare nor myself refer to HR at all. In fact, we have made a pledge to remove those letters from the vernacular altogether.
What was personnel administration became human resource management. It’s now about people; and your people are more than a resource. They are emotional, complex and capable of awesome things. You need people in your companies and you need to take care of them.
What else is crucial for founders looking to understand this area of the business?
CM: Recently, I attended a diversity and inclusion event, and I go along thinking we will talk about women in tech once again. Better gender representation is massively important but it is where the discussion has centred for so long. What is now developing is a more insightful approach and a different way of looking at the diversity and inclusion topic.
If we focus on inclusivity, we address levels of equal opportunity to access rather than the equality of outcome focus we’ve seen for so long. For example, how to get more people entering tech who who aren’t from a university background. The startup community calls itself disruptive but we have a total bias toward education.
GL: This remains an important, complex and difficult area to navigate. There is a genuine tension between achieving a diverse and highly functional team while being able to recruit the skill needed in competitive talent landscapes.
I don’t think we’ve found the silver bullet in our field, but Talent and People professionals are really driving the conversation forward by talking about inclusivity, diversity of perspective and intersectionality.
I am excited to see more behavioural science and psychology being included, with qualified scientists now contributing more and more not just to research, but in business and people management roles.
What businesses can all do, rather than keep referring to humility, is to be more humble. Be more aware of bias and be less ashamed to talk about it. Oxbridge ex-management consultants are often great. They are often strong leaders and clearly intelligent and of course shouldn’t be positively discriminated against by any means. However hard-working, capable and intelligent people with good ideas come in all different shapes and sizes and from a variety of backgrounds.
This could very quickly become a political debate, which is not what we’re here for, but I will say that I believe that removing the bias to education in startups is a good start. I’d like to see more happening where vocational, loosely apprenticeship-based, non-university learning is concerned. I’d love to see better means for tech companies to design and implement their own programs and routes to careers in product and engineering for example. Enabling them to create their own access paths.