Hiring from your network is common for early-stage founders. On the surface, such a move makes sense: founders want to surround themselves with people they trust. When put into practice, however, the impact can be significant if the approach goes wrong.
Friends, everybody needs them
Hiring from within your network usually acts as a comfort hire. It’s someone you know and trust – a person you feel comfortable working with. But while there’s a familiar element, the relationship can act as a deterrent because it overrides their competence as a sales professional.
When you hire a friend from your network, the lines may quickly become blurred. You risk burning both your relationship and revenues when things go wrong, and the situation becomes particularly messy if you need to let that person go.
What’s more, the structure of the team is fundamental. You need to be clear about what this role is and is not doing for you. Even with the best go-market strategy, trying to make a great team is tricky if the ingredients aren’t right.
Fighting initial instincts
Emma Hatto is the Co-Founder of Thrive, a data-led recruitment agency matching the right talent with the right companies. She understands why startups tend to hire from their network, saying, “If you’re a startup, and you’re looking to hire people quite quickly, why wouldn’t you go to your network?
It’s the path of least resistance – the easy hire, if you will. Yet, many founders have been down the network hire route and regretted their decision. Emma has seen it first-hand, which is one of the reasons she created Thrive. She says, “The highest predictor of job success is understanding cognition and personality and how to bring that all together in an interview process.”
Of course, those traits don’t necessarily lend themselves to hiring from within your network. Therefore, startups need to fight against their initial instincts to opt for the more straightforward, network-friendly hire and instead take a deeper dive into the hiring process.
The consequences of a bad hire
Whether hiring from your network or not, startups can’t afford to make expensive mistakes with the wrong hire. If you make a bad hire and the employee isn’t capable of doing their job effectively, then you’ve wasted time and lost productivity. Over time, that can have a tangible impact on results and overall performance.
When we talk about a bad hire, we really should be talking about a ‘wrong’ hire. It doesn’t mean the person isn’t capable, but there’s a lot of reasons why your startup environment might not be right for your contact.
There’s also the monetary aspect to consider of a wrong hire. It costs to recruit and replace employees. Getting it right on the first go becomes even more pressing for startups with little room for error.
What’s the answer?
In short, startups need to land on a hiring strategy much like their other departments are required to nail sales, marketing, product, et cetera. There’s also the option of using specialists like Thrive and taking a data-led approach.
For many startups, however, using a consultancy is often the smartest way to move forward, especially when building commercial teams. Shaping job roles and recruiting into them is part of what we do. The result is a well-oiled machine that puts startups on the right track to releasing their ambitions.
Less networking, more skills-focused
There may be times when it makes sense to make a network hire. But for most startups, it’s better to go down the route of starting fresh. Working with a sales consultancy gives you more ammunition than one single hire, and it’ll help you set up an efficient process that makes your sales team tick while putting the necessary strategies in place.