There’s a talent war in the tech industry. When you’re a feisty startup, it’s hard to watch the top developers, designers, marketers and project managers rush towards the Googleplex. Your startup probably can’t compete on cushy perks like endless pools and 24/7 free food and drink. The good news is you don’t have to.
Finding the right hires for your startup is incredibly important. As Bill Harris, former CEO of PayPal and Intuit, told a crowd at SXSWi last year: “You need people who are willing to take risks. And then you need to reward them.” This means you’ll be looking for people who share your big dreams.
To start, employee equity is a great incentive for your hires, and not just because of the potential financial payout. By offering equity as part of your recruitment package, your employees become owners in your company. This means they’ll also share ownership of the company’s mission — and they’ll work hard to achieve it.
Leave an imprint on the product
Tech giants like Facebook and Apple can rightly lay claim to have large-scale impact. For example, even the smallest change to a Facebook button can affect tens of millions of users. However, these changes are usually a small part of a larger product or solution.
At a large company, it’s rare to have a holistic impact on the project you’re working on. There are multiple sub-specialties and teams involved in delivering the service. At a startup, there’s very little hierarchy. Every new hire has the potential to have a transformational impact on the company’s trajectory.
This is why it’s so important to incentivize your employees with equity. Owners take a holistic approach to work. They don’t just focus on the day-to-day or what they’ve been asked to work on. They think more broadly as an owner in the business, and they know that every action they take has a direct impact on whether the company achieves its full potential.
Impact a company’s long-term culture
Companies like Google and Zappos have created legendary work environments. But the kernel of culture starts with the early startup team.
Who you hire is important at any company size. Your employees represent your brand. They can build up (or detract) from your your reputation, and they directly engage with your customers in all facets of the business. But who you hire early has a disproportionate and lasting impact on how a startup grows and who it will hire in future. As Joe Kraus, a Google Ventures Partner once said: “The cost of hiring someone bad is so much greater than missing out on someone good.”
This is why we go through a very rigorous hiring process at Gusto (formerly ZenPayroll). We know that one poor hire can have long-term implications on our culture. Values fit is our biggest criteria in hiring and finding mission-driven individuals has helped Gusto get to where it is today.
Our goal is to make payroll as simple and intuitive as possible using the principles and tools of modern software. This means we look for candidates who pursue simple solutions to complex problems, love helping small businesses and are eager to tackle a core, foundational problem. It’s amazing how much a small team can accomplish when everyone is working toward the same goal.
Hands-on training for entrepreneurs
Often the people attracted to startup life are other entrepreneurs. They love the small teams, big impact and owner mentality.
Fortunately, there’s no better place for these future founders to be than inside another startup. Only a startup can offer such a high-value front seat to starting and running your own company.
The reality of being an entrepreneur means that roles change according to need. An early employee can gain exposure to multiple parts of the company. In one day, you might move from working with public relations to helping the customer success team to whiteboarding with the product and engineering team. The best place for an aspiring founder to learn is in the trenches with you.
You can’t compete directly with Google on salary, and you don’t want to. The candidates you’re looking to hire are willing to take a risk to be owners in your company’s mission. When you find someone that shares your values system, is yearning to take on additional responsibility & accountability, is motivated to solve your problem, and has a skill set that can help your business succeed, then it’s not just a great fit for you, it’s also a great fit for them as well.
This post originally appeared on Inc.