Hiring for Startups: How to Build a Dream Team on a Tight Budget

Group of young business people are working together in modern office for a startup. Creative people with laptop, tablet, smart phone, notebook.

When you’re running a startup, every dollar matters. The prospect of investing a chunk of your precious budget in building a team is daunting, especially when you consider the fact that hiring a single employee costs an average of around $4,000. This means finding, appealing to, and hiring not just any talent but the right talent, is crucial to your growth and success. Check out these hiring for startups techniques to ensure you recruit top candidates.

The Importance of Hiring for Startups

A company’s people are always a defining element of success, but this is exponentially more true when it is in its very early stages. The first few people you add to the team will be instrumental in accomplishing what needs to be done to enter the market and scale. 

Your initial team also has an outsized impact on your company culture, shaping it in real time. This impact is multiplied by the fact that your culture will determine your ability to attract future employees to join the organization. 

As a new small business owner, your first few employees will grow with the brand and, hopefully, be a part of your team for many years to come. Thus, hiring is one of the most important things you’ll do in your company’s early days. However, it can also be one of the hardest. 

Follow these steps to recruit top talent even when operating on a startup’s shoestring budget. 

Hiring for Startup Tips

1. Define your hiring needs

You probably have a gut feeling about what you need help with ASAP because things are starting to fall through the cracks, or your growth is stalled because of the talent you’re lacking. Even so, it’s important to take an analytical approach to avoid hiring a full-time employee when you don’t actually have a full-time need. 

First, assess your existing workforce. This shouldn’t be too challenging because you only have a handful of employees, if any. For each person, define their strengths and current responsibilities, as well as noting any areas where they’re wearing extra hats that shouldn’t really be part of their job.

Next, look at your short- and mid-term goals. What skills are you lacking in your current workforce that are necessary to reach those goals? For example, maybe one of your 12- to 18-month goals is to have your product on the shelves of a major retail store, but no one on your team has business development expertise. You’ve identified a talent need. 

Since you’re hiring on a budget, each person you hire needs to make a clear contribution toward growing the business. Their responsibilities must be well-defined and serve a precise need within the organization. It’s even better if they can serve more than one need at this point in the game.

2. Consider alternative options

Once you’ve defined your immediate talent needs, consider whether any of them can be met by someone who’s not a full-time employee, like a freelancer, contractor, or part-timer. 

Leveraging alternative labor solutions can help you grow the business without incurring the expenses of a full-time employee, like salary, benefits, and taxes. Plus, it allows you to test out a working relationship with a new person to whom you can potentially offer full-time employment. 

3. Write killer job descriptions

Now that you’ve narrowed down the needs that actually necessitate hiring an employee, it’s time to create job descriptions that will attract the right candidates. 

For candidates, one of the most attractive prospects of joining a startup is not being bogged down by the bureaucracy that exists in a large corporation. Your job descriptions should reflect this. 

Write them in your own words rather than using templates. Use the language you’d use when describing the role and company to a friend rather than speaking in professional jargon. Infuse your job descriptions with your company’s unique voice, whether it’s humorous, witty, casual, uplifting, inspirational, or whatever other characteristics describe your brand. 

Related: How to Write a Job Description to Attract Top Candidates

4. Prioritize the right soft skills 

Defining the technical skills you need, like accounting or sales, is fairly straightforward. Technical skills aside, though, there are some essential soft skills that every early hire in a startup should have. 

Here are some of the most important ones:

  • Team building. No matter the person’s job function, all early employees will also play an instrumental role in building your team, shaping the culture, and mentoring hires that come after them. 
  • Self-starters. Your first employees will often be a department of one, so they need to be able to take the lead on projects and own them to completion. 
  • Adaptability. Things change fast in a startup environment. Sometimes the entire business model can pivot. You need people who are comfortable with change and who thrive in a fast-paced environment. 
  • Positivity. Working at a startup is exciting but comes with a lot of uncertainty. In your company’s first months, you want to surround yourself with people who have contagious optimism. 

5. Get referrals from your network

At this stage, referrals will be your best friend in recruiting. 

When you don’t have years of hiring experience to draw upon, it can be even harder than it normally is to spot the red flags of a hiring mismatch. Turning to friends of friends and other people already in your network can help minimize the risk of making a bad hire. 

Plus, people who are high performers tend to have elevated standards for the people they refer, so you can feel confident you’re connecting with applicants of a high caliber. 

6. Build a stellar reputation from day one 

When you have an excellent employer brand, much of the recruiting work is done for you because candidates have already heard how great it is to work for you. Of course, you don’t have that name recognition when you’re a brand-new company. But focusing on your employer brand from your very first hire will make future hiring easier and easier as you grow. 

When you start thinking strategically about your reputation as an employer from day one, you can incorporate your desired messaging into every recruiting material you create. You won’t have to go back and rework things later to achieve your intended result. 

7. Utilize social media

In today’s digital age, social media has evolved far beyond being just a platform for personal interactions; it’s now a potent tool for recruitment, especially for startups. With limited funds, startups might be unable to afford the premium features of job boards, making social platforms like LinkedIn, Facebook, or even X invaluable assets. These platforms allow startups to tap into a vast pool of potential candidates, some of whom might not be actively looking for a job but could be the perfect fit for your team. Sharing job openings on your startup’s profile, personal profiles, and relevant groups can significantly increase the job post’s visibility without incurring substantial costs.

The use of social platforms for hiring goes beyond just posting job vacancies. Engaging content about your startup’s culture, mission, and vision can attract like-minded individuals passionate about your cause. You can build a brand that appeals to potential candidates by showcasing behind-the-scenes glimpses. Regular updates can also foster a community around your brand, making finding and attracting individuals who align with your startup’s values and objectives easier.

8. Make a strong case

Recruiting materials for a startup need to be laser-focused on what’s in it for the candidate. What unique selling points should convince a great employee to work for you instead of a more established brand? 

Assuming salary isn’t your strong suit, emphasize other compelling features like your mission, the flexibility you offer, and the opportunity to help build something great from the ground up. The good news is that many of today’s job seekers value these qualities as much as–or more than–money. 

9. Be clear about realities

On the flip side, avoid overselling. Your employee value proposition should be enticing yet grounded in the realities of working for a startup. It’s not for everyone, and you want to be sure candidates know exactly what they’re signing up for. 

As the old saying goes, under-promise and over-deliver. This will help mitigate excessive turnover, which can be a death sentence for a young company. 

Related: How to Create a Winning Employee Value Proposition 

10. Hire for potential

For some startup roles, like upper management positions, prior experience is non-negotiable. Hiring for potential is arguably more important for other roles, particularly ones that will be working “in the trenches” on your day-to-day operations. 

Hiring for potential means prioritizing candidates who can be trained and molded over those who come with lots of experience (as they’ll arguably be more set in their ways). At a startup, you need people who will be excited to evolve with the organization, not people who will resist changing their approach when the situation calls for it. 

Hiring candidates with potential–and the work ethic to go along with it–can guarantee longevity more than hiring for skills alone.

Related: Reasons You Should Hire for Potential

11. Tighten up your recruitment workflows

Right from the start, get systems in place for your repeatable hiring processes, like screening, interviewing, and onboarding. Systematic workflows streamline hiring and enable you to juggle it alongside your other core duties. They also create a smoother candidate experience, which helps you receive a ‘yes’ from more of your job offers.

Related: How to Create a Recruitment Process Flowchart

12. Supplement talent with technology

When you’re pinching every penny, you shouldn’t hire someone when technology can do the job just as well. A one-time investment–even a hefty one–in something like a software platform can easily pay for itself through savings on payroll and benefits. 

In most cases, technology is best used to make life easier for your actual human employees, helping them tackle repetitive and tedious tasks so that more mental energy can be devoted to growing the business. So, consider technology investments alongside hiring in your budget planning, as the two go hand in hand.

Related: The Top Recruitment Assessment Tools and Technologies

13. Go slow and steady

While no founder wants their growth to stagnate, one of the biggest reasons startups fail is that they get too big, too fast. Instead of setting glamorous goals like 10Xing your workforce, focus on sustainable growth. 

At the end of the day, you’re looking for a unique set of people who will still be with you when the company is in an entirely different place (and maybe even looks like a completely different company), which is why prioritizing the right qualities and focusing on longevity will bring you the best results.

14. Partner With a Staffing Agency

Staffing agencies can be a highly effective way to build a strong team for your startup while minimizing the challenges of handling recruitment in-house. In specialized or niche roles, recruiting firms have access to an extensive talent pool, allowing them to efficiently find, screen, check references, and select the best candidates. Furthermore, they provide valuable guidance on competitive compensation packages and benefits, saving startups time and resources.

We offer customizable staffing solutions at 4 Corner Resources to fit your unique hiring needs and budget. Contact us today to learn more about the services we offer!

Pete Newsome

About Pete Newsome

Pete Newsome is the President of 4 Corner Resources, the staffing and recruiting firm he founded in 2005. 4 Corner is a member of the American Staffing Association and TechServe Alliance, and the top-rated staffing company in Central Florida. Recent awards and recognition include being named to Forbes’ Best Recruiting Firms in America, The Seminole 100, and The Golden 100. Pete also founded zengig, to offer comprehensive career advice, tools, and resources for students and professionals. He hosts two podcasts, Hire Calling and Finding Career Zen, and is blazing new trails in recruitment marketing with the latest artificial intelligence (AI) technology. Connect with Pete on LinkedIn