S7 E21 Start up hiring is different. Here is why you need a hiring plan. with Jeremy Gray

Episode 21 Start up hiring is different. Here is why you need a hiring plan. Recruiting talent is no different than any other challenge a start-up faces. It’s all about selling.” – Vivek Wadhwa

Staff expenses are likely to a major cost to your P&L. In labor intensive industries they can be as high as 70% of your total costs. The term labor intensive conjures up a vision of old-fashioned manual labor but in the service sector most of your costs will be labor. A business such as SaaS will be labor intensive, Often, they are less but they will be significant so they will be an important component of your cash flow forecast so you need to plan what positions you will hire, when you expect to hire them and at what cost. Costs go beyond salaries, you may incur payroll taxes, statutory benefits and industry standard benefits. Also, you need to assess holiday pay, sick pay and possibly overtime. These can add 30% to the salary number. You may need to supply tools such as computers, screens, workspace etc. A start up is different because often you are hiring your executive team first. Unlike an established business that hires to replace gaps or to expand. Assess your skills and identify gaps that must be filled before launch. Be honest – you cannot do it all yourself. Industry knowledge should be acquired if needed. Assess when the skills will be needed and factor in hiring time. Hire talent but manage the costs. Start ups are hard work. You need folks who are willing to pitch in and do whatever is necessary to get the business off the grounds Beware of corporate types who have been used to having a support network. Pay for the talent you need but get creative in packages. Base plus incentive. Consider people embarking on a second career Sell your business to candidates. Tell them of your business plan, vision, values, and culture. Show your enthusiasm for your business. Work backwards to establish your executive payroll and when costs will be incurred. Identify essential workers – production staff, programmers, waiters. This will vary by the type of business Research costs for your market and availability. These roles often have market rate As a start up the future is uncertain – you may have to pay a premium to encourage staff to join you. Especially if skills are in high demand. Incentive plans may be appropriate Your hiring plan should reflect your planned organizational structure. Does it fit? Quantify your employee costs and timing. Essential part of your cash flow. Tags: How to start a business, Achieve start up success, Hiring, Organizational structure, employee costs, The successful entrepreneur, business common mistakes small business start-up; avoid these common mistakes of business, mistakes in business, IBGR.network, Jeremy Gray, Practical Solutions to Difficult Problems