CB Insights puts the wrong team as number 7 on the list of reasons High Tech startups fail with 14% of companies citing this as one of the reasons they did not succeed. As we learned in episode 49 hiring the wrong people is a common contributor to businesses going under. How can you avoid hiring mistakes?

It starts with having a hiring plan. By having a plan you will give yourself time to find the right candidate. If you know you will need a CMO six months after starting, you can develop a timeline that will enable you to have the right person in place at the right time

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. Take a look at your co-founders, assess your teams’ skills and identify gaps that must be filled before launch. Be honest – you cannot do it all yourself.

Then make a plan on when you will need to hire in outside talent. You may need a full time CMO to drive your business but its unlikely you will need a full time CFO until some time after launch. For skills such as these consider hiring part time professionals. If you bring part time skills such as CHRO, CFO into the business early you can get access to the skills you need at a fraction of the cost. They will learn the business and guide you until you reach the stage that you need full time help.

We have learned that lack of industry knowledge can be a real problem. If this is not available in your team you need to hire it in house. But finding the experience combined with a startup mindset can be challenging.

Startups are hard work. You need folks who are willing to pitch in and do whatever is necessary to get the business off the grounds. Corporate executives who have the knowledge you need may be willing to work hard, but they have been used to having a support network. As a result, they may not feel comfortable working beyond their area of expertise. Assess their willingness to pitch in by offering a lower base plus incentives based on the business success. 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. Bring them along with you. If they have the right mindset they will buy into your vision and be excited to join you.

Do not forget you will need essential workers to produce the goods or services you plan to offer, production staff, programmers, waiters, what ever your business needs. Take the time to understand the availability of these types of workers in your market. Plan your hiring accordingly.

As you grow your team, consider how you will ensure they stay with you. Unwanted attrition is expensive because the loss of knowledge and the hiring of replacements is expensive. One survey I read estimates the cost of hiring an hourly employee in the United States at $1500. The cost of replacing a technical or middle management employee can be up to 1.5 times their salary. Hiring a C-Suite executive can be more that 2X the salary.

Employees leave when they do not feel valued. Whether that is valued by their boss or valued by the organization.

Retention starts with recruitment.

The interview stage is as much about them liking you as it is about you liking them. It’s also about sharing realistic expectations of what the role entails and having a mutual understanding of what both parties bring to the table.

Consider the future: The candidate might be a perfect fit now but what about in two or five years’ time? You’re looking for loyalty and longevity to reduce the likelihood of the right person leaving sooner than you’d like.

And ultimately, whether the individual fits your company culture and will work well with the rest of the team. Are they familiar with startup culture? After all, a startup is a very different beast to a large corp.