A final option to consider is utilizing multiple tools at once. For example, let’s assume you have determined, based on a thorough review of your expected budget and current headcount, that you are overweight on engineers, have too many salespersons, and need more resources on customer success. In this case, you could combine the above strategies by issuing a partial hiring freeze on engineers, hire a VP of customer success, and shift salespersons over to the customer success team.
Ultimately, we encourage you to understand the various options at your disposal, perform a thorough review of your situation, and to wield your tools as appropriately as you can.
Depending on your current financial health, we expect to see a few general tools at your disposal ranging from aggressive to more conservative.
If, based on a thorough analysis and review of your budget, you still have the capacity to make several key hires, we suggest you start with a prioritization exercise. Given your goals for 2020 and beyond, what is the strategy for achieving them? What key positions are most essential towards reaching that goal? If you have an excellent product but weak sales, can you still hit your goal? What about the other way around?
Much like the exercise of finding product-market fit, we suggest using questions like the above to find the right company-role fit for your current needs and ambitions. Remember, its completely acceptable to develop specific areas of your organization before reinforcing the rest. You don’t need the perfect organization, just the one that will allow you to efficiently reach your goals.
The last option one can consider is downsizing your existing workforce. As with a hiring freeze, this option is available to most companies, even growing or profitable companies. However, we suggest wielding this tool with precision since job cuts often carry serious implications on team morale and motivation.
Even if you don’t anticipate immediate cuts, we would encourage you to begin thinking about your strategy now rather than later. Generally, it’s easier to be more rational today than when facing a strict deadline complicated by emotions and stress. So, where to start?
As with much of our advice, we suggest aligning your business to your long and short-term needs. Most often, this results in focusing your business on your revenue-generating functions such as go-to-market, customer success, and product development. Consider what roles and functions are essential to this core process and work backwards, asking the probing question - “how much could we still achieve without this role?” – as you go through each function.
We expect a small minority of companies like Zoom, remote healthcare providers, or other counter-cyclical startups to experiencing rapid growth over the coming months. If that is the case, you may want to consider hiring more aggressively in order to sustain continued growth, and there are key considerations for hypergrowth companies in particular:
1. Make hiring a top priority – When you’re growing quickly, everyone is always too busy. More and more opportunities will slip through the cracks unless you take a step back, make hiring a priority, and dedicate resources to the problem.
2. Make an investment into your hiring processes – The potential rewards of hiring correctly are huge, but mistakes might be even more costly. Therefore, we suggest investing significantly into improving the efficiency and quality of your hiring process. Whether this is designating a task force, reallocating time and/or resources, or removing bottlenecks, having a streamlined yet effective process will pay off immensely in the long run.
3. Look for potential within – Hypergrowth is usually an excellent time to look for latent potential within your existing employees. Hiring from within is cheaper, more efficient, and often good for company culture, so look to match promising junior candidates with stretch opportunities and empower them to be successful.
While you have an array of options in front of you to consider, we want to make one strong and final recommendation on talent: a downturn is a much different business environment than the one we have lived in for the last ten years. We think the single best thing you can do to improve your chances of success are to hire senior team members, bring on board members, or recruit wise mountain-top gurus who have been through this environment before and lived to tell the tale. These invaluable folks should be able to provide unique, personalized, and experiential wisdom that will help you see the next mountaintop while helping inform your strategy in the interim.
Unfortunately for many of us, Spring 2020 has come in like the Kool-Aid man and waylaid most of our well-thought-out intentions. Chances are your revenue, and therefore your budget, has been affected by the economic slowdown (Take a look at our section on Your Budget for a more in-depth look), which will inform the range of options you have at your disposal for talent.
If you are a startup founder, it’s likely safe to assume you’ve set ambitious goals for yourself and your company for the next one to two years. Maybe it is hitting a new growth target. Doubling number of customers. Expanding into a new geography. Getting to profitability. Getting NPS above 50. Maybe all of the above. Regardless, large, ambitious plans require hard work and focus from your existing team and, at some point, additional hands to help with the load. In addition to rank-and-file roles like developers, account executives, and customer success representatives, at a certain scale companies will also look to fill out key senior management positions – CMOs, CFOs, sales leaders, and VP of Products.
A moderately more conservative approach is implementing a temporary hiring freeze. We suggest considering this route if either a) you’ve recognized that you don’t have enough cash or expected revenue to support further growth or b) you believe you can reach your 2020 goals without additional resources.
Although we suggest evaluating your allocation of employees constantly, it’s surprisingly easy to lose focus on who needs to be where in order to maximize your team’s potential. Hiring freezes can allow you to take a step back and examine your current allocation of resources, consolidate roles, and/or restructure your business around delivering value to customers and generating revenue. Look to current employees to fill existing gaps in essential business functions or to step up into new responsibilities. Invest in your employees to help grow their skillsets and let them stretch their abilities through this time.
If this is an option you are considering, we suggest providing strong and clear communication to your organization about the length, nature, and rationale for a hiring freeze. This strategy has potential long and short-term effects on productivity and morale, so consider this option with the appropriate care and offer as much transparency and motivation as possible when enacting a freeze.
We want to conclude with a reminder of some silver linings that may not be initially apparent in trying times. First of all, a downturn means that there will be an exceptionally high level of interesting talent on the market who may not usually be available. This offers a unique opportunity to make some excellent hires. Furthermore, you may be able to hire great people for below market value simply because of the increasingly loose job market. A downturn is also a perfect opportunity to re-examine your organization. As the saying goes, “growth hides all sin”. Well, today is an excellent time to look at streamlining your team before that growth fades away.
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