The Nuts and Bolts on Hiring and Firing
In June 2017, BLOCK71 Singapore had their monthly Founder’s Breakfast, where entrepreneurs got together to discuss key challenges in the area of hiring, firing and building the right corporate culture. Here are some of the interesting takeaways from this session.
What are some of the difficulties start-ups face when it comes to hiring?
· Tech start-ups need people with specialised skills and getting such staff is difficult, especially when start-ups cannot pay top salaries. Start-ups should put in place an employee stock options plan (ESOP), in order to attract good staff and encourage loyalty.
· When a start-up makes its first few hires, it typically gets good generalists — individuals that can do a bit of everything. As the company grows, people’s skills will get more specialised. The entrepreneur must find and build up the core strengths of their early hires, otherwise they risk making good generalists redundant.
· First-time employers may not have much experience in hiring and judging character. While the skill sets of the candidate are important, more crucial is the individual’s integrity and whether the chemistry with the co-founders is right.
How do you fire someone?
· Two-way communications with employees is important. All staff should know their KPIs. Those who are not delivering should be given a chance to improve their performance. In some cases, the employee may work with the entrepreneur to decide together on the deliverables. If after sufficient time, it is clear that the employee does not have a good fit with the company, then entrepreneurs must let them go.
· When it comes to firing someone, do it with dignity and respect. In the ideal situation, after the firing is done, the employer should be able to still ask the individual out for a drink. Remember, it is a small world. Today’s fired employee could be your customer tomorrow.
· Make sure all the paper work is in order, to keep the company protected. This is especially in situations where the firing is related to the individual’s integrity issues. The company must have the evidence complete, and in a written format. You may be asked to give a character reference a few years’ time, so having the necessary information available is important.
How to sustain the corporate culture as new hires come onboard?
· It may be better to hire in stages, rather than bring on many new recruits at the same time. Each new employee brings his/ her personality into the company. If hiring is done too aggressively, the co-founders may not have enough time to shape the corporate culture, as they want it to be.
· The start-up culture could end up burning people out. Conserve your human capital, to get the most out of your employees. For example, if staff are not needed in a meeting, allow them to skip it. If all work is completed, let staff go home at 3pm. Next week, you may need them to work until 10pm.