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I am sure you have heard the adage of people making a business many times before. It is probably the second most-used phrase after an army marching on its stomach.

Why then, I wonder, do many startups and small businesses make mistakes while choosing the right people? How does one come about the right combination of people to make a successful team? How to identify the people you must not hire? Namrata Singh, Founder, Antfort, a Mumbai-based HR, process and web solutions company focusing on the digital, media and retail verticals, says that the first thing startups need to do is go beyond the obvious reasons why one would want to hire an employee.

What not to look for
Many entrepreneurs bring their own style and personality to the hiring process. While this is vital to judge how the prospect fits in with the employer’s mindset and plans, sometimes this can also make the entrepreneur overlook
the basics.

Singh points out the four not-to-dos—hiring people because they seem brainy, because one likes them, because they seem driven or because they are cheap. These four reasons should be junked even before you think of scouting.

Prashant Bhaskar, the founder of PlugHR, which is a Mumbai-based HR firm that provides subscription-based HR services to startups, agrees with Singh. He believes that sometimes hiring for startups can be too easy. “Startups have limited budgets and if they find a reasonable candidate within their resources, they tend to close the deal there itself. That is not healthy. Your limitations cannot define your hires.”

Allwyn Agnel, founder of MBA forums site Pagalguy.com, was looking for people for his editorial team last year. He says that finding the right guy takes considerable effort and it would have been easy for him to fall into the trap of hiring someone cheap.

Besides these, he says, the right stuff also means that the person has integrity, honesty and the ability to communicate and learn. All others are secondary to these important ingredients.

The right stuff
There have been many books written on this topic; you must have read many articles about what the right employee must have. But these also tend to be more theoretical than practical. Theoretically, as Agnel said, a person must be honest and be willing to learn from others besides the obvious technical skills. Antfort’s Singh, however, believes when starting out the element of curiosity is a must. “Plus, a positive, happy disposition and disregard for the dingy office, clunky computer and peeling paint goes a long way.”

PlugHR’s Bhaskar explains it further. He says that startup employees need to be the ones who come from unstructured and open working environments—people who have the itch of volunteering for initiatives. “So the class topper is not the person you should be ideally looking for, but rather the students who sat in the college canteen planning the next college fest or social initiative. Startups do not have great static infrastructure and you need employees who would not get unnerved by that,” he says.

Plus, they need to have demonstrated some sort of multi-tasking in their previous roles, he adds. “A startup requires an employee to fill many shoes, so an employee must have demonstrated incidences of this—whether at the previous job or at school and college,” he says.

Another requirement that a prospect must fulfill is the ability to work under limitations, more specifically, budget limitations. “He should have worked in an environment where you first thought of more financially feasible ways before the obvious expensive way. A judicious outlook to resources is a must,” adds Bhaskar.

Where do you look for them?
Antfort’s Singh believes that you are wasting your time if you are looking to put up advertisements for filling your positions. She is right. Most founders say that a majority of their first employees were not even looking for a job, but rather came on board from the desire to create something new.

Singh believes that bar camps and college circles are the best places to hire from. She believes that good things travel faster and more effectively by word-of-mouth. “Look in your post graduate and engineering school networks,” she says. “This is where you will find your best employees, referred to you by your own friends.”

PlugHR’s Bhaskar adds that founders need to take a proactive role in the scouting process. If it is young, fresh blood the startup is looking for, the post-grad schools are a good place. “Founders can make themselves available for guest lectures,” he says. “This allows for a two-way interaction for your brand with an audience that will definitely have two or more prospects.”

Besides this, the founders should always make themselves available at all events held by the TiE and NEN networks which have a large captive audience that is genuinely interested in startups and entrepreneurs.

But, says Bhaskar, often a lot of your prospects will be employees at large corporations. To get to them, founders must attend all possible industry events, and even get middle references to set up an informal interaction.
Inderpreet Wadhwa, founder of solar power plant operator Azure Power, believes that for most startups requiring special skills and experience, like his, you have to look into established corporations. “Then on, it is a matter of how good your idea is and how good you are at influencing the prospect with it,” says Wadhwa.

Is there a place for social media in hiring?
We all know that LinkedIn, Twitter and Facebook are the latest buzzwords in the hiring circles. But are they really working on the ground?

Antfort’s Singh believes that the stumble-upon aspect of these social media sites provides an edge to the startups. “HR consultants cannot get you your employees,” she says. “You need mavens who believe in you or people who stumble upon a startup of their interest.”

PlugHR’s Bhaskar says the biggest advantage that social media gives startups is that it allows them to access their target population. “It allows the startup to project its brand and then interact two-ways with the prospect,” he adds. “You suddenly have direct access rather than paying consultants and job sites which are expensive and cannot project your brand like you can.”

Siddharth Rao, Founder, Webchutney, a digital media agency, clearly believes in the aspect of scouting through social media. Even before the company puts up a job listing on the sites, it is common to see the listings being put up on Twitter and Facebook by the company’s current employees. And Webchutney is ranked by many as one of the best places to work at in this sector.

Think like an MNC
Though scouting for startups does happen in a number of unconventional ways, would it be the same for the recruiting process? Does a startup have to go unconventional here too? There are contrasting views.

Antfort’s Singh believes that though you may try going the planned way through the recruiting process, it’s most unlikely to actually work. She believes that hiring for startups needs to be flexible and the process need not be rigid to the corporation’s tested methods.

Bhaskar of PlugHR, however, believes in a slightly different theory than this. He says that though the scouting process can be unconventional, the recruitment process, once the initial point of contact has been made, must be akin to that of any large corporation. “You must make him feel like he is joining an organization; an organization that he is helping to build,” he says.

He explains that startups need to think like brands from day one and then act like that when it comes to the prospect going through the recruitment stages. There needs to be a method that gives the prospect an assurance of the brand’s ability and people, according to him.

“The prospect is already excited enough by your business plan and idea to be there across the table,” he adds. “He just needs reassurance that he is doing the right thing and having processes akin to large corporations will help in that.”

The final snare
If all goes to plan, you will have rounded off to the person who looks most fit for your startup. The preferred choice of road from here would be that you both agree to the conditions of employment and that you will have a new team member.

But in the real world, this may not always turn out to plan. Anand Morzaria, founder of Hyderabad-based Pennywise solutions and the company behind tolmolbol.com, says that many a times he has lost good prospects at the last stage, thanks to the higher salaries offered by the IT giants in Hyderabad.

So how can a startup make itself more attractive to a much-needed individual who might not join on the money on offer? Antfort’s Singh is aware of this stumbling block. “If it is a funded startup, then perhaps more money is the answer if the prospect is really good and needed,” she says. “Else, offering equity options can help turning the tide in the startup’s favor.”

PlugHR’s Bhaskar, though, believes that  the equity option only works when applied the right way. He explains that for every 10 people who understand the concept of equity options, there are a 1,000 people who do not and hence do not care for it that much.

Equity will however work wonders when offered on top of what he is expecting, Bhaskar says. “So if he is getting Rs.5 lakh at another place, he will definitely join you if you offer him the same plus equity options on top. That is why I am not a big believer in equity.”

Bhaskar says that one way to influence the prospect is to proactively make him meet the other team members of the startup. “That is a huge statement of confidence,” he says. “You must involve them subtly and make the prospect see what the other side looks like.”

Another way is to make the prospect meet the startup’s advisory network in an independent environment. “Typically, these are well-known professionals, successful entrepreneurs and investors,” he adds. “The validation of your idea and the business around it from such people will give the prospect the necessary and required push to join the startup.”

In the end, both Singh and Bhaskar agree, it is your business idea and the hope of creating something bigger than yourself is what will succeed in pulling the best available individuals to your startup.

Read on:   | Keep Your Folks Intact |  10 Ways to Retain the Best |  Who After You? | Return of the Natives |  Water, Water Everywhere… Is there a Drop to Drink? | The Real Cost of Workplace Conflict

©Entrepreneur July 2010

Tags:
Allwyn Agnel, Antfort, Azure Power, employees, hire, HR, Inderpreet Wadhwa, Namrata Singh, Pagalguy.com, PlugHR, Prashant Bhaskar, team