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"Nick Marsh is the founder at Makeshift. This post originally appeared on Medium.\r\n\r\n\r\n\r\n\r\n\r\nI want to introduce a new\r\nconcept\u200A\u2014\u200A\u2018talent hacking\u2019. I define this as the creative application of technology and data to the problem of building new teams.\r\nI\u2019m trying to coin this phrase in part to highlight how we\u2019ve bizarrely neglected the \u2018people\u2019 part of the startup stack.\u00A0We\u2019ve seen methodological revolutions in how we build technology, manage products and do marketing in recent years. But the\u00A0processes involved in hiring and managing people seem to have barely changed\u00A0at all.\r\nIt\u2019s time to change that by learning from what\u2019s working in other parts of the startup movement and applying it to the people bit.\r\nI\u2019m calling this \u2018talent hacking\u2019, and this article is my first attempt to bring together some of these ideas in one place.\r\n\r\nWhy talent hackers?\r\nFirst, a confession. I\u2019ve shamelessly stolen the \u2018talent hacker\u2019 idea from the \u2018growth hacking\u2019 movement.\r\nGrowth hacking emerged a few years ago to define the hybrid technical / marketing role within internet startups that was focused on\u00A0quick growth in user numbers.\u00A0This enabled startup people who weren\u2019t marketers to understand and embrace the most important aspects of that field\u200A\u2014\u200Athe need to quickly grow your audience, and from there your business.\r\nAs a stripped-down form of early-stage marketing, growth hacking puts an extra emphasis on metrics, especially the cost to acquire a customer. It then combines this with an aggressive use of technology, as well as a \u2018no holds barred\u2019 approach to opening up new channels.\r\nImplicit in the concept is that\u00A0growth hacking is simultaneously everyone\u2019s responsibility in a company and also an individual specialism:\u00A0the whole firm should be concerned with growth, but some people should be given free reign to hack totally new channels.\r\nThe time has come for a similar revolution in the recruitment and HR departments of early stage companies.\r\nDon't miss:\u00A0What is an Entrepreneur in Residence?\r\n\r\nThe problem\r\nHiring and management practices are still stuck in the dark ages of business: poorly measured, expensive,\u00A0beholden to \u2018the way things have always been done\u2019\u00A0and populated by shiny-suited commission-driven sales people. Even worse, the culture of \u2018you\u2019re lucky to have a job\u2019 is still floating around some circles.\r\nFortunately, change is already here\u200A\u2014\u200Aall across the world companies are experimenting with\u00A0new ways of hacking the process of sourcing, hiring and building teams, fast, on tight budgets.\r\nBig internet firms like Zappos are\u00A0ditching hiring shibboleths\u00A0like job descriptions and CVs, while investment firms like Andreessen Horowitz are building\u00A0in-house talent agencies, and smaller startups like Driftrock are using their speed advantage to\u00A0jump on new hiring channels like Twitter Ads.\r\nThe people leading this change are talent hackers, and if your startup is growing quickly, you need to make them a priority hire.\r\n\r\nSome background\u200A\u2014\u200Amy recent experience helping startups hire\r\nSix months ago my company,\u00A0Makeshift, launched a product called\u00A0Hire my Friend\u200A\u2014\u200Aa friendly startup-focused recruitment service, designed to\u00A0mimic the way many smart people get jobs, via referrals from friends.\r\n\r\nWe\u2019ve been very flattered by the number of candidates that have registered with our service (13,000 and growing every day), but\u00A0we\u2019ve been totally overwhelmed with the response from companies\u200A\u2014\u200Aover 1000 companies have applied to join without us doing a single piece of targeted company marketing.\r\nEvery time I meet a CEO, CTO or a senior person responsible for hiring in a startup I hear the same thing\u200A\u2014\u200Athe recruitment industry and recruitment practices are totally broken.\r\nDuring the early stages of\u00A0Hire my Friend\u00A0we conducted customer development interviews with some of our early users. One CTO I spoke with, tasked with recruiting tech talent for their project which had recently raised over $1M on Kickstarter told me that:\r\n\u201CHiring is difficult, time consuming, frustrating, boring, stressful and heartbreaking.\u201D\r\nIsympathise with this. I\u2019ve spent the last five years or so building teams in small digital companies, and I agree\u200A\u2014\u200Ahiring is really, really hard. But why?\r\n\r\nThe talent market for startups\u200A\u2014\u200Avery competitive and changing fast\r\nFirst, it\u2019s clear to anyone working around internet tech that there is a massive, sustained boom in our sector, that has led to a\u00A0significant talent drought,\u00A0especially amongst developers and technical designers. In London alone, internet firms are expected to\u00A0create an extra 46,000 jobs in the next ten years.\r\nBehind the absolute increase in available jobs lies a\u00A0change in the nature of the firms hiring.\u00A0In particular, startups are getting smaller, quickly come and go, and sometimes grow extremely fast.\u00A0This Economist report calls it a \u2018cambrian moment\u2019.\r\nThis has led to a huge gap between the jobs available and the people to fill them. There simply aren\u2019t enough good programmers, designers, digital marketers, experienced ops people to fill these roles. Nearly half of London\u2019s startups say that a lack of talent is the\u00A0biggest factor restricting their growth.\r\nThis shift in the types of companies hiring and the labour market has led to some important changes in how the hiring is happening within startups.\r\n\r\nCandidates have the advantage.\u00A0It used to be that firms had the upper hand, but now, good candidates can pick and choose between employers: if you leave your technical job tomorrow, you can get another one the next day. So this means that companies have to work much much harder to attract good people.\r\nInexperienced managers find themselves tasked with hiring.\u00A0This is especially true for companies founded by younger entrepreneurs. People who may have only had one job before starting their company, are suddenly hiring 20 or 30 people in a year. These people have to learn the art of hiring very quickly.\r\nRapid hiring happens after investment rounds.\u00A0After a firm has a large seed round or series A, investors expect a sudden uptick in headcount, typically within a few months, so talent pipelines have to get shorter, decisions faster.\r\nSelf-organising teams are needed to manage explosive growth.\u00A0When a startup is experiencing serious growth, say doubling in size every six months, a new type of self-organising management is required, as traditional top down management can\u2019t cope. This has big implications for HR process development and company culture creation\u200A\u2014\u200Ahugely important parts of the talent hacker\u2019s stack.\r\nIn summary, we\u2019re seeing big changes in how early stage companies hire. It\u2019s even been called a new industrial revolution that will change the way we work for the foreseeable future.\u00A0As The Economist says\u00A0\u201Cthe world of startups today offers a preview of how large swathes of the economy will be organised tomorrow.\u201D\r\n\r\nCurrent hiring methods are static and broken for early stage startups\r\nThe amazing thing is that amid all this change, sourcing and hiring practices have hardly changed at all, especially for smaller firms. Everyone that works in startups will be familiar with the standard process for hiring people. It looks something like this\u2026\r\n1. Define the job\r\nManagement identifies a new role to be created. A salary is kicked around and feedback requested on the skills needed. If anyone has a friend that fits the bill they normally pipe up at this point and suggest an interview.\u00A0No one thinks about any direct spend at this point.\r\nAfter this, someone writes up a \u2018job description\u2019 that lists various skills that the team assume are required to do the role, normally accompanied by a breathless description of the unbelievably exciting expected duties.\r\n\r\nMost programming job descriptions basically translate to this: how compatible are you with our ongoing poor choices and can you save us?\r\n\r\n\u2014 Akiva (@akiva) June 10, 2014\r\n\r\n2. Source some candidates\r\nThe job description makes its way to a company website somewhere, gets included in a newsletter, maybe tweeted \u2026 and then the team have a think about what to do with it to actually get some applicants.\r\nAt this point,\u00A0there is the realisation that money may have to be spent,so someone may throw a few hundred dollars at a job board ad or two.\r\nAt this stage it gets fuzzy. If a firm has a good brand, and a good community around it, things proceed to the next step\u200A\u2014\u200Ascreening applicants and doing interviews.\r\nIf not, the person tasked with making the hire may proceed to some\u00A0active sourcing,\u00A0normally a combination of Linkedin mining, emailing friends and colleagues, and hoping to avoid the inevitable next step\u200A\u2014\u200Aspeaking to a professional recruiter.\r\nThis last step is normally taken as a last resort, normally because the firm is desperate.\u00A0Finding a positive story about an interaction between a tech firm and an agency recruiter is a very, very rare thing.\u00A0But if this step is taken, the firm is then on the hook for an average placement fee of 20% of the new hire\u2019s salary, typically around $16,000 in the internet industry.\r\nSuddenly, this hire just got very expensive\u200A\u2014\u200Aand that idea of not spending any money goes out the window.\r\n3. Screen and interview\r\nEventually we get to the next phase, screening and interviewing. Assuming the job description has been seen by some people that could actually do the job, they apply with a \u2018curriculum vitae\u2019\u200A\u2014\u200Aessentially a self declared list of things the candidate says they can do, as well as some kind of cover letter.\r\nIf the team like the look of this arbitrary document, they may choose to progress the candidate to the next stage\u200A\u2014\u200Ainterviews.\r\nInterviewing skills vary enormously. Some people are very good at it, and some firms train their managers in effective interviewing techniques. But most small companies don\u2019t.\r\nThe end result is that\u00A0interviews are often more of a chat about industry topics, with no guarantees that two candidates will get the same interview,\u00A0often preceded by the candidate telling their life story, and ending with some trivial conversation about non-work-related activities.\r\nEventually, when the team has spoken to enough people, a decision is made. An offer is put forward to a candidate. If they accept, they start three or four weeks later. If a recruiter was involved, a large sum of money changes hands.\r\nAnd only then, when work starts, do they get to figure out if the job to be done and the candidate match up.\r\nIf you nodded your head at any of the above, its time to start thinking differently.\r\n\r\nWhat\u2019s wrong with this?\r\n\r\nWhile clearly a characterisation of some of the worst practices, from my own conversations with startups and SMEs, many firms (including ones I\u2019ve been involved with) have used all or some of this non-process to hire their team.\r\nMatt Buckland\u00A0at Forward partners puts it like this:\r\n\u201CHiring is still waterfall in an agile world\u201D\r\nThere\u2019s so much wrong here, but here\u2019s a few of the most glaringly broken elements:\r\nNo budget leads to a huge budget.\u00A0Smaller companies often hope to make a hire without spending anything. This kind of attitude can lead to only a small number of applicants, and finally a desperate recourse to recruiters, who of course charge a fortune.\r\nNo measurement leads to no learning and significant (or at least unknown) waste.\u00A0Along the way, many companies fail to build a data set of what is working to hire great candidates, and what has failed. Without these metrics it\u2019s very hard to make good decisions about where to spend money, and what to improve. This is especially strange in startups, which are often great at analytics, A/B testing and measurement of their products.\r\nLimited sourcing channels leads to limited candidates.\u00A0Most companies rely on the same small number of sourcing channels to find their candidates\u200A\u2014\u200Aemployee referrals, Linkedin, and a small number of job boards. With the exception of referrals, this means they are all competing with each other for the same small pool of people, and when most founders reach the fringe of their immediate networks they start to get very weary.\r\nJob descriptions and CVs leads to very arbitrary screening.\u00A0Job descriptions and CVs are a very lightweight way of describing work to be done and the people who can do it. Using these documents to make matches is quite arbitrary\u200A\u2014\u200Aput simply, your ability to write a good CV or cover letter may have almost no impact on your ability to do the job.\r\nInterview processes leads to a very limited appreciation of fit and ability.\u00A0Face to face, conversational (or worse, confrontational) interview situations give very limited insight into a persons ability to do the work required, which is normally collaborative, and focused on producing something.\r\nThird party recruiters (often) suck.\u00A0Finally, it almost goes without saying, that most external IT recruiters suck. They might be lovely people, but their incentives are all screwed up, which makes their behaviour unhelpful. They work in a very bonus-driven, sales-oriented environments, and often have very limited personal experience of the roles they are filling, and almost no knowledge of the culture they are hiring into.\r\nThe cumulative results of all these practices in our industry are profound. You can\u2019t help thinking that \u201Chiring is difficult, time consuming, frustrating, boring, stressful and heartbreaking.\u201D\r\n\r\nHow to start talent hacking at your company\r\nNow, I don\u2019t have any magic bullets for this problem, but below are some of the behaviours I\u2019ve observed amongst innovative, technically minded recruiters\u200A\u2014\u200Atalent hackers\u200A\u2014\u200Arecently. I\u2019d love to get your feedback on this, and start building a more complete thesis around what works to hire great people in today\u2019s hyper-competitive marketplace. There\u2019s lots more to learn.\r\n\r\nTreat talent development as a function.\u00A0First and foremost, firms need to respect the work required to hack the talent problem. It\u2019s a job, not a side project. This means that sourcing and hiring responsibilities need to be clearly assigned to individuals, and that the work involved in hiring is treated as an exercise in continuous improvement, much like engineering or product development.\r\nTIP: Adapt agile methods to track your hiring. Create a Kanban board of candidates with swimlanes for stages, and do regular standups to update each other on individual candidates.\r\n\r\nHave a budget for recruitment, and measures of success.\u00A0In order to continuously improve, you need clear budgets and measures of success. The aim should be to constantly increase the quality of new hires, whilst simultaneously reducing the cost of each hire.\r\n\r\nTIP: Include recruitment and sourcing budgets as line items in your financial planning.\r\n\r\nInstrument the process and use data to make better decisions.\u00A0Once you have budgets, measures of success and people focused on hiring, you need to make sure you are measuring progress.\r\n\r\nThis doesn\u2019t mean simply producing reports\u200A\u2014\u200A\u2018I sourced 10 people and we hired 1\u2019\u200A\u2014\u200Abut rather building a queriable data set about what happened, in order that you can answer questions you don\u2019t yet know\u200A\u2014\u200A\u2018which candidate source yielded the most female applicants that got to a third stage interview\u2019.\r\n\r\nTIP: Have a look at the kind of\u00A0Metrics that Matt Buckland tracks at Forward, then start tracking them yourself\r\n\r\nDon\u2019t \u2018interview\u2019. Instead, find ways to work together before committing.\u00A0This isn\u2019t always possible but we\u2019ve found that our hiring success is very closely correlated to whether it was possible to work on an actual piece of work together before getting started\u200A\u2014\u200Anormally a small hack or side project. This gives both parties a much better chance of understanding fit.\r\n\r\nTIP: Consider paying a candidate as a contractor for one days work in lieu of of an interview process, and then get them to do some real work and have lunch with the team.\r\n\r\nTIP #2: Try using a lightweight testing service like\u00A0Prehash\u00A0to allow candidates to show what they know in a more realistic setting.\r\n\r\nUse alternative sourcing channels.\u00A0If you are relying on the same sourcing channels as everyone else, you are competing with the biggest, most well funded, well organised talent teams in tech. Instead, why not try hacking your own methods for reaching out to candidates. The best way to show you are innovative is to make the initial approach innovative!\r\n\r\nTIP: London based startup Driftrock used Twitter ads to gather candidates.\r\n\r\nTIP #2: If you have a specific hire you really want to make, consider doing something very memorable\u200A\u2014\u200Athese guys\u00A0sent a matrix style phone to prospective creative directors.\r\n\r\nTIP #3: Request access to\u00A0Hire my Friend\u00A0(our service). It\u2019s full of people who would actively consider moving on.\r\nWhat next?\r\nAs mentioned, this article is meant to\u00A0ask questions, not provide all the answers!\r\n\r\nI hope the talent hacker concept inspires debate about how we can\u00A0use knowledge gained from other parts of the startup movement to begin improving sourcing, recruitment and HR practices."^^<http://www.w3.org/2001/XMLSchema#string>
<http://thenextweb.com/entrepreneur/2014/06/21/one-hire-every-startup-desperately-needs-make/>