HR Mistake Of The Week: Not Being Smart About Startup Hiring

Just because you have a $10-million-dollar startup idea doesn’t mean you have $10 million yet. This is the problem facing many entrepreneurs: How do you attract great employees when you can’t offer them a great salary?

AJ Kumar offers some tips in Fast Company for drawing top talent to a startup without a lot of cash. Since this column is all about HR mistakes I’ll flip his advice to tell you what not to do:

Don’t play up your special appeal.

Startups are not just mega-corporations without cash. They offer a “distinctly different culture,” and one that is actually appealing to many potential employees, including driven recent college grads. As the cofound of Startup Nation, Rich Sloan, tells Kumar, “People get involved in a startup for three reasons. One, they like creating, being part of something new. Two, they want to participate in the upside. Three, they want to live a meaningful life, and the closer you are to the success or failure of a business, the more meaning and purpose you feel.” Use that to your advantage.

Don’t use incentives other than salary.

Your cash-flow might be lacking, but get creative. Kumar cites a 2011 study of current and recent college grads that found that about 40% of them would accept a lower-paying job in exchange for flexibility in things like social media access and mobility. Stay attuned to work-life balance issues and you may be able to attract candidates who wouldn’t initially be attracted to the money you have to offer.

Don’t help employees feel invested in your company.

Kumar suggests considering other non-cash benefits that a savvy employer could offer, including training and development opportunities or help securing visas. You can even consider giving employees a percentage of the company, to help them feel invested and incentivize them with a potential future payout.

Bottom line: You know you’re more than you cash-flow. Make sure your potential employees know it, too.

Photo: Bairachnyi Dmitry /

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