recruitment challenges for startups

Recruitment Challenges For Startups & How To Overcome Them

Kurt Graver Business Development

Employees are the most critical part of any business, you can have the best product or service in the world, but if you don’t have the right people, you will never be able to grow your business.

Understanding how to recruit and retain the best staff is a skill that every new business owner should possess.

Without high calibre, motivated staff it is unlikely your business will reach the expectations that you had hoped for even if your product/service is of high quality. Having the right team in place will enable growth and reduce dependency on you and free up your time to deal with the strategy and development of the business.

Startups and small businesses struggle to attract the top talent, often losing out to larger and more established companies.

How To Recruit Top Talent

To overcome your recruitment challenges, you need to:

1. Know what you want

It’s key to understanding the role that you have on offer. Look at what the job entails now, and how you expect it to grow in the future. There is little point in recruiting a book-keeper on a long term contract if you hope your business to expand dramatically in the next three months and will require an accountant.

You will be stuck with an employee who no longer fits with your requirements. It would be much wiser to recruit a book-keeper on a contract and recruit and then recruit an accountant if the business grows as expected.

Startups should employ an agile recruitment model and fully utilise short term contracts and freelancers.

1. Hire Experts or Outsource

Most startups do not have a recruitment specialist; this skillset can be outsourced by using a specialist recruitment consultancy to handle your recruitment process. Most consultancies work on a fee-only if they place a candidate in your business; however, their fee can be up to 35% of the first year annual salary. This cost should be budgeted for in your business plan.

2. Work Within Your Budget

You need to plan how much you have to spend on recruitment. Newspapers and recruitment consultancies can be expensive.

Cheaper alternatives include internet job sites and LinkedIn.

3. Offer A Competitive Package

You will be competing with larger more established businesses if you are trying to recruit the top talent. Many small companies fail to hire top staff because they cannot afford to offer the salary and benefits of larger organisations.

Do not be put off by this; focus on what you can offer top talent. Working for small business provides responsibility and the chance to make a more significant impact; this will be enough to attract many people as long as they support your vision of the business.

Share your business plan with them, show them where you want to take the business and the importance of their role, show them how you see their role developing. If you thought to find the right people was hard, holding on to them is even more difficult. Reducing the disruption and costs associated with a high turnover of staff is critical to business sustainability.

How To Keep Your Staff

The modern economy has changed employment patterns; there are no longer “jobs for life”, employment is more flexible nowadays, and it is quite common for employees to only stay at a company for 1-2 years.

This impacts the business in two ways:

Companies should not depend on any one employee, including the owner; they should have a robust succession management system in place to mitigate the risk of losing a key member of staff.

A talent retention strategy should be implemented as part of its strategic planning.

Integral to your talent retention strategy is finding out what your employees value. Start an annual employee satisfaction survey and try and implement a strategy that addresses the negative feedback and builds on the positive feedback.

Overall your strategy should focus on two elements – Value and Security.

Several studies have been undertaken on this topic, and they all come to the same conclusion, people are more creative and innovative when they feel valued and secure.

Career Development & Progression

Employees work harder and are more likely to stay with a company that makes them feel valued and respected. One of the key roles of management is to create an atmosphere throughout the business that encourages ideas and innovation.

Employees should be aware that there is a realistic possibility of promotion within the business. Managers and employees should work together to create a development plan that will help them reach their career goals just as long as it aligns with the corporate goals of the business.

It is essential that managers do not view staff training as a cost; staff training should be perceived as an investment.


Successful businesses make it safe for employees to participate and contribute. This gives the employee a sense of participation in the making process, thus having a direct impact on the future of the business. Businesses that fail to listen to their employees lose their employees. They will take their ideas and set up their own business or take them to one of your competitors.

A great way of ensuring that employees can voice their opinions to management is through a staff representative. This system can be beneficial for sharing new ideas and staff issues to management.


Investing a workplace that cultivates teamwork, creativity, productivity and productivity will also pay off. Businesses that have a pleasant and stimulating workspace are more likely to succeed.

Keeping staff positive about the business means they will pass on the sentiment to customers.

Tips for creating a work environment that will keep employees happy.
Celebrate your successes as a team as often as possible.

Try and encourage a social atmosphere across the business. Try and remove the barriers between management and employees.

Value employees by rewarding them when the business is doing well.
Make sure your employees know how the business is performing, in good times and bad times. Let them know the vision for the company; employees need to know what they are working towards.

Make sure your employees feel they are valued in the business and can progress in the business.

If you want to keep your best staff, creating the right environment is just the beginning you also have to engage and motivate your employees in different ways. How much an employee is prepared to commit to their work depends on three components, how well they are: understood, appreciated and treated. The better you treat your staff, the better they will perform.

There are many ways to motivate staff both financial and non-financial. Below are some of the most effective methods.

Well Being

Employees are more likely to care about the company they work for if the company cares about them. Businesses that implement wellness initiatives such as healthy eating programs, discounted gym memberships and outdoor team-building exercise sessions.


In your employees feel they are unfairly paid this will lead to employee dissatisfaction no matter how well you treat them. Ensure you pay a fair basic salary to your employees, use benchmarking to ensure your business is competitive.


It is important to reward your employees when they met or exceeded expectations; employees need a tangible reward for meeting their targets. Money is the most common way of rewarding staff, but you can reward staff with gifts or share options.

When rewarding employees on performance make sure that you reward on individual, team and company-wide results, it is important that you do not penalise employees on poor results if an employee has met their target they deserve a reward.

Poor results are usually market or management-driven; the employee should not lose out because of this.


As a start-up recruiting and retaining the best staff will be a challenge. If you genuinely believe your business you have to surround yourself with people who you believe have the skills to take the business forward, beyond what you thought possible. If you can find people like that, they are invaluable so do whatever you can to keep them by implementing a few the strategies above.

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