How to Hire and Fire People the Right Way

One of the many things founders are in charge of is hiring employees. As you know, a company is only as good as the people that work for it, so it’s important to take your time in finding top talent.

Many entrepreneurs have a tendency to focus on the product they want to bring to market. They do not have much experience in recruiting and hiring. As CEO, you might think that finding the right people is easy. After all, there are many people out there who are looking for a job. However, you will find out that much of the time it isn’t so easy.

How do you attract top talent? In his METRO Accelerator workshop on Hiring & Firing, Jens Lapinski starts out with taking a look at large corporations. Bigger companies have Human Resources or HR departments, so you would assume that they are well equipped to hunt for talent. According to Jens, this is a big misunderstanding, because “HR’s primary purpose is that employees get treated in accordance with the law.” HR’s daily business is to ensure that working contracts have been signed, that employees get regular reviews, and so on.

Ever wondered how our Accelerator workshops are held? No worries we sneaked in with a cam and video-taped Jens 🙂

Separate Talent Acquisition from Human Resources

“HR’s fundamental function is that of compliance” says Jens. The classic role of an HR employee will be the one of an administrator. Herein lies the problem that startups should avoid. Jens’ experience shows that “if you give the HR department the job of hiring people, they often cannot do it.” The reason for this is that hiring excellent candidates outside of the company is a hunter’s job. The mindset and skills you need to attract talented people do not fit in with the administrative qualities you find within the HR department. This is why you need to separate the two functions and find someone who focuses on talent acquisition.

Make Talent Acquisition a Priority

Talent acquisition is one of the most important jobs in your company. “If you want high-quality people to come into your company you need to hire excellent talent acquisition people first,” says Jens. According to Colin Day, founder of iCIMS, a provider of cloud-based talent acquisition solutions, “smart leaders who innovate past their competitors do so by prioritizing talent acquisition as a long term play and not a transaction at the time of need.”

How Do You Interview Candidates for Your Startup?

Once you’ve gotten candidates through the door, you need to find out if they are the right ones. But how do you, as CEO, interview somebody for a function you are not even familiar with? What is the best way to screen candidates for a developer role, if you are not a developer yourself?

The solution is to find an expert inside or outside of your company and have him or her do the functional part of the interview. The questions should focus on topics that your job candidate would encounter on a daily basis.

The second part of the interview should assess cultural fit. You should try to understand the candidate’s motivation. Jens recommends asking him or her about the biggest success they had in previous positions, followed by asking, “And what did you contribute to it so that it became a success?” David Simnicks, co-founder and CEO of SoapBox Soaps, a maker of all natural, handmade soaps, is keen on getting to know a candidate’s values, asking “If you are given $ 1 million dollars every year for the rest of your life, what would you do?”

Letting People Go

Firing people is one of the hardest things for a business owner to do. Every CEO should be aware that the correct process of letting people go is largely driven by the law, and it can be costly if you do it wrong.

If you are not yet experienced in the process of contract termination, you should contact a lawyer before you do anything. After you have talked to him or her, “You should do exactly what the lawyer tells you to do,” recommends Jens. The same advice applies if you want to let go of a co-founder, but these situations are significantly more difficult.

If you already have HR people working for you, you should make them your allies. “You want to ensure that an HR rep is able to attend the meeting”, says Rebecca Knight, a writer for the Harvard Business Review, “it’s legally practical and more comfortable to have someone else in the room.”

The good news is that if you terminate an employee in the right way, everybody in the company will appreciate it. And remember to focus on the future: letting somebody go is emotionally draining, but you are doing it for the sake of your team.

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