How to make a startup hiring plan

By Crystal Guerrero, Josh Constine | November 11, 2020 |

    SignalFire’s guide to headcount planning, inclusive job descriptions, compensation benchmarking, and interviewer training

    by SignalFire’s Crystal Guerrero, edited by Josh Constine

    Headcount is your biggest expense, so it pays to plan ahead. You wouldn’t write code without knowing what you’re building, or make a sales call to a random phone number. It’s the same for recruiting. Mapping out the process means when you need to fill a role or talent falls in your lap, you’ll be ready to hire, smart, and fast.This guide is designed for founders, executives, and recruiters alike to sharpen their hiring skills regardless of budget or team size. Whether you’re a one-person hiring squad, an in-house team, or are working with recruiting contractors, we’ll teach you to:

    1. Develop a short- and long-term hiring plan

    When should you develop a recruitment plan?

    It’s never too early! Founders and CEOs should ideally start thinking about recruitment plans before they even have the money to pay for the talent. That way they can budget or raise to cover their future burn rates. Many investors like SignalFire prefer pitches that include a hiring plan so they know what funding will go towards and which key roles or weaknesses remain unaddressed. But let’s say that you’re coming to this realization a little later in your company’s history, like once you’ve made your first Talent/HR hire or assigned someone else to take ownership of recruiting like your COO or VP of Finance. You’ll still need to understand the process so you can evaluate your team’s work and align your efforts.

    Why focus on recruiting so early in your company’s history?

    If you only have a handful of employees, you might be hesitant to spend time at this stage improving your recruiting processes and operations. But founders often spend 70% of their time on recruiting. It’s the only way to actually gain time back by having people to which they can delegate tasks. Unfortunately, the explosion in startup formation has created a talent crunch. That means you can’t just be a great place to work or compensate well. You also have to know exactly who you need, when you need them, and how to run a swift and professional recruiting process to sign them.

    It’s an especially tricky challenge because every startup wants to hire amazing talent, demand has drastically surpassed supply, and when you don’t have a process in place, everything is slower and less efficient. The stakes are high at this stage: Each subsequent hire will consider your existing team’s quality and culture when deciding whether to join. Great talent wants to work with and learn from other great talent. Meanwhile, diverse talent may be apprehensive about joining a homogeneous team. Putting in the work now means you won’t be digging yourself out of a hole in the future.

    That said, don’t limit yourself to only senior employees at name-brand companies. While you might feel like nabbing some VP from Google means you’ve derisked your company, they can be hard to attract without huge cash compensation, and might not fit into a scrappier culture. Instead, look for first hires who could have made great co-founders.

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    3 steps to launch your recruitment plan

    Step 1: The approval: What is the process to open a role

    You need to institute a standard approval process that happens every time you open a role. This process should apply to all departments and positions at all levels, including full-time regular, part-time regular, and temp positions. This process should account for A) budget and B) resources for someone (e.g. founder, executive, recruiter, hiring manager, or agency) to work on the role, and C) defining the role and responsibilities.

    Initiating a hire

    The hiring leader discusses new requisition needs with the decision-maker whenever a department has a need to:

    1. Open and recruit for a new position

    The person who makes these approval calls could be the CEO or CFO, depending on your org structure.

    Approving roles: A step-by-step guide

    Here’s how to go from recognizing a role you need filled to kicking off recruiting. Remember that depending on your team size, the recruiter, hiring manager, head of HR, and even the founder could all be the same person.

    1. The hiring manager emails the decision-maker to request a new open position — this is called a requisition form. You can make this an easy-to-access template and post on your wiki for all hiring managers to access. This should include:
      • -Is this a new position, refill position, or temp position?
      • -Title
      • -Seniority level
      • -Who the person will report to
      • -Basic scope of the role/responsibilities/skillset required — attach job description if this is a refill for a past role
      • -Compensation benchmarks
      • -The decision-maker approves or rejects
    2. If approved, the requisition form is sent to HR (if you are a small team, this step may be handled by finance). It’s helpful to attach a job description at this point if it is available. For help, check out SignalFire’s job description template and our deep-dive into turning role needs into job descriptions later in this chapter.
    3. HR/Finance reviews the requisition form to verify that the job’s responsibilities, necessary skills, and compensation match the open role, and suggest edits if necessary.
    4. Once approved, HR/Finance updates the compensation benchmark spreadsheet with the new role’s compensation bands and shares with the hiring manager and CEO/Finance for final approval.
    5. The recruiter is given all relevant information and begins working with the hiring manager to launch the recruiting process.

    For more on job requisitions, check out the Society for Human Resource Management’s approval process.

    Compensation benchmarking

    How much should you pay a software engineer? How about an intern vs a manager? How should that be divided between salary, bonuses, and equity? And how much equity should you provide in refresher grants over time? These are critical questions for both attracting and retaining talent, but also for hiring planning so you don’t outstrip your runway.

    Hypothetical example, not based on real data

    This downloadable compensation benchmark spreadsheet and template from Option Impact (dummy data set previewed above) includes recent data on expected ranges for engineering salaries, bonuses, and equity for a variety of seniority levels. While it’s not perfectly up to date and doesn’t take into account COVID-19 or remote work’s impact on compensation, it should give you a foundation for headcount planning. The additional tabs provide templates for building your own compensation workbooks for engineering, product, sales, marketing, and customer support.

    You can click File->Download->Microsoft Excel to download the compensation example and templates for your own use. Check out Option Impact’s compensation data services based on 3000 participating companies for more resources like this look at Bay Area startup CEO compensation.

    Given COVID-19 is pushing many companies to be remote-first, it may be appropriate to consider compensation changes for employees that move from near your headquarters to lower cost-of-living locations. Payscale’s calculator will show you the change in housing and living costs for moving between different cities.

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    Payscale’s calculator

    Step 2: Headcount and capacity: When to hire

    Despite uncertainty, it’s important to maintain both a short- and mid-term hiring plan and document where you stand on recruiting each quarter. Tip: Investors and board members appreciate seeing these quarterly checkups in your updates to them.

    If you are fortunate enough to have someone besides a founder leading talent acquisition, it’s important to give them (your recruiter, people ops, HR team) guidelines in the form of a headcount plan and forecast. Like salespeople, recruiters are often working with pipelines and managing connections with job candidates over time, so giving them insight into future hiring needs will help them nurture the right relationships.

    There are two major points to consider: headcount planning, which is defined as deciding which new employees you’ll be adding to your organization and the rough timeline this will follow, and capacity planning, which is considering how many roles your recruiter will be able to take on at any given time.

    Headcount planning

    The budgeting process for new headcount typically happens early in Q4 for the following year. At this point, all new positions are discussed and go through the annual budgeting process for planning and approval.

    In many cases, circumstances will dictate additional headcount needs outside of the already approved roles. In this case, there should be a discussion justifying the new approval so that the team is aligned as to why the role is being prioritized over the formerly planned roles. The whole team must understand that the recruiter will not be expected to work on or source candidates for un-approved roles.

    The executive team should decide how to prioritize roles — determine which three to five you’d like the recruiter to focus on and what ranking roles come in after that. It’s also a good idea to come up with a plan for handling backfill if an existing team member leaves. Be sure to prepare for scenarios where you need to ramp your headcount plan up or down depending on fluctuations in runway or unexpected cash crunches.

    Here are a few points to consider when defining your headcount plan and forecast:

    • Which people do you need today, in two quarters, in a year, or even later? If you’re looking to hire mostly executives in a short timeframe, you’ll probably want to work with external recruiters from a capacity standpoint. If you only want to hire a few individual contributors, an in-house recruiter should be able to handle that.

    Capacity planning

    You need to develop a realistic workload for your recruiters to avoid burning them out. This is why it’s helpful to create a framework for defining the complexity of roles. For example, recruiting software Greenhouse’s 5-point scale allows you to assign a difficulty index to each role. Roles that are easy to fill or already exist and require little setup (e.g. adding another SDR to your team when you already have one) get a score of 1. Roles that are higher levels of seniority or require specialized skills (e.g. senior software engineers or executives) get a score of 5. Recruiters can typically fill around 12 points a quarter, so using this approach can help create alignment around priorities and realistic expectations.

    You’ll want to measure or at least estimate your recruiting yield ratio. This is defined as how many candidates will you need to source and move through each phase of the interview funnel to reach your hiring goals.

    Here’s a hypothetical recruiting yield ratio pyramid from Workable, though your numbers will vary widely.

    Hiring managers and recruiters will work closely throughout the entire recruiting process (which could be quite lengthy if you’re looking for an especially tough-to-fill role), so they need to be on the same page from the outset. Be sure to spend time defining roles and responsibilities as well as creating realistic expectations about how long different steps will take. Hiring is a full-time job, so factor in all the work!

    Check out these resources to learn more about recruiter capacity planning:

    Step 3: Roles: Who you need to hire

    When considering who to hire, start with the big picture: What’s the ideal composition of your company? What distribution of experience do you need? Then you can zero in on questions like what each incremental hire will bring to the table and how to optimize your hiring order. Your management team should discuss upcoming hiring needs within each management meeting. These conversations should then be factored into the company’s annual hiring plan to make sure that growth projections are being hit and the budget is not being compromised.

    When you’re ready to think about individual roles, the hiring manager and recruiter should work together to create a detailed job description. We often recommend asking the hiring manager to articulate their needs for the approval process first and then to go back later with the recruiter to refine them at the start of the search.

    Here are the questions that should guide these discussions, both at the leadership and hiring manager levels:

    • Why are we adding this role?

    Resources in this section:

    External links in this section:

    How SignalFire can help

    Don’t want to handle this all by yourself? Recruiting is SignalFire’s superpower. Our Beacon Talent engine tracks most of the top tech talent in the Western world and can generate reports on the best and most hirable job candidates for any role. SignalFire’s talent program is headed by former Facebook Talent leader Mike Mangini whose team assists our portfolio companies with high-level strategy and on-the-ground recruiting to make sure you score your ideal hires. We made over 1000 job candidate intros to our portfolio companies last year — just one of the reasons we receive a net promoter score of 96 from our portfolio founders, over 85% of whom say we’re their most valuable investor.

    SignalFire’s Director of talent operations & development Crystal Guerrero

    For first-time founders and serial entrepreneurs seeking a refresher, we start by offering a program based on my (Crystal Guererro) decade of experience leading talent operations for startups. We partner with founding teams to help them establish a world-class recruitment process. We refer to this as a “recruiting engine” — systems implementation, brand building, role definition, recruitment process, sourcing, interview training, and compensation benchmarking to enable teams to identify, attract, engage, close, and onboard top talent quickly and effectively.

    This hiring plan guide is part of our Recruitment Process Optimization program where I work in tandem with our founders and talent teams to devise a comprehensive recruiting strategy, advise on systems development, and aid in recruiting execution via our various individual contributor talent pipelines as well as Beacon Talent. To support this program, the Talent Academy Playbook outlines the nuts and bolts of implementing a well-oiled recruitment machine which is a compilation of best practices and learning from my recruiting career. This should help guide your thinking as it relates to building your talent engine.

    Service Level Agreements For Hiring Teams

    How to create clear tasks and timelines for everyone who’s involved in the hiring process.

    So much of recruiting relies on timing. If you’re too slow to follow up, schedule interviews, or make an offer, chances are that promising candidates will get snatched up by another company. But many steps in the hiring process depend not just on a single person but the coordinated efforts of several people. This is why it’s so important to commit to timelines, deliverables, and success metrics so you can move candidates through the pipeline quickly.

    Service Level Agreements (or SLAs from here on out) clearly spell out exactly what each team member is responsible for and the timeframe they have to complete each task. SLAs will help you make more offers, get more candidates to sign, and bring your company that much closer to a world-class team.

    Which SLAs should you assign?

    The charts below provide an outline of what generally happens in each stage of the hiring process along with some recommended timelines for the recruiter, hiring manager, recruiting team (which may overlap in smaller teams), and the decision-maker (who may be the CEO, Head of Finance, or Head of People). Take a look and consider how these map to the people and processes at your company.

    You can use this template below to make your own hiring SLA with tasks each role is responsible for.

    How long should it take to complete each task?

    Time kills all deals. To put it simply, you want to move as quickly as possible in every stage while accurately assessing candidate value.Still, you need a realistic time frame for each task. These numbers will vary depending on complexity and seniority of the role, the recruiter’s existing bandwidth, etc., so consider them a rough guideline:

    • Hiring manager completes initial job description: 1 week

    Hold a kickoff meeting with stakeholders to decide which tasks and time frames should be included in your SLAs. Consider how you’ll hold people accountable to them. For example, you may want to incorporate SLAs into their goals or performance evaluations.

    Grade your experience

    You’ll also want to gather insight from the candidates who are going through this process. A candidate experience survey can help you collect data to identify if there are any slowdowns or inefficiencies they perceived in the process.

    You can use Google Forms, Typeform, Survey Monkey, or another survey tool.Here are examples of a candidate experience surveys to get you started. You can see what the survey should look like in PDF form, and copy text from the Google Docs versions to paste into your own surveys:

    • SignalFire’s Candidate Experience Survey — Downloadable PDF

    Defining who you want to hire

    Creating a detailed job description that can be used both internally and externally to promote a role.

    Your team needs to be able to align around the skillset and qualities that will make someone successful in this role. Otherwise, you’ll be wasting candidates’ time — and your own.

    One of the best ways to come to a consensus on your ideal candidate is by crafting a detailed job description. Think of this as a piece of marketing collateral: It should speak directly to candidates and convince them why your company is the perfect place for them. We made this startup job description template to help you out.

    Hiring manager kickoff

    Before you get started on the actual job description, the hiring manager needs to carefully consider the ideal candidate for this role. What type of company do they currently work for? What are some keywords that define their work to date? What specific work experience and personality traits do they have? We know these are deep questions, which is why we’ve created the Hiring manager kickoff document to walk you through these major categories. Plan to spend about an hour conducting the research and filling out the document, and then you can continue on to the next section. Don’t worry — we’re not going anywhere. This is what we do.

    The key elements of a job description

    It can be tempting to turn a job description into a wish list of everything your company wants. But if the description seems too broad or demanding, it can scare off applicants. Instead, try to frame your job description in a way that puts the candidate first. Why should they be interested in this role? What will they get, both personally and professionally, by joining your company? This will boost your rate of inbound applications and outbound recruiter response rate.

    Here are a few points you should aim to include:

    • Brief description of the company’s product, purpose, and mission

    That might seem like a lot to include, but you shouldn’t just lay out a laundry list of prerequisites and projects they’ll work on. Tell them what they’ll actually spend their days doing.Most importantly, you want your job description to be unique. Candidates will likely be comparing yours to several similar roles at other companies and you don’t want to get lost in the crowd. Don’t be afraid to add a little flavor from your work environment and company culture.

    Check out SignalFire’s job description template for a deeper look at all the major components. We recommend having hiring managers and recruiters partner on writing this up. Remember that you don’t have to reinvent the wheel. You can recycle some wording from previous job descriptions, especially when it comes to your perks, benefits, and company culture.

    A note about inclusive job descriptions

    Research has shown that the language in job descriptions can affect how they’re perceived by candidates and discourage certain groups from applying. There are a few steps you can take to create more inclusive job descriptions. Here are a few examples:

    • Use gender-neutral terms like “they/them”, “applicants” or “the candidate”, not “he or “she”

    To learn more about inclusive language in your job descriptions, see: 5 Must-Dos for Writing Inclusive Job Descriptions.

    Textio‘s unbiased writing tool

    Resources in this section:

    External links in this section:

    Choosing & Training Your Hiring Team

    How to train your hiring team to conduct consistent interviews and provide vivid candidate feedback

    Anyone who joins your company is going to change the team dynamic, and this is especially true when you’re small and early stage. They’ll be communicating and collaborating with the rest of your squad, so it’s critical to have other team members participate in the interview process and consider who would be the best addition to your company. Plus, interviewing is tough and time consuming. The burden shouldn’t only rest on the hiring manager’s shoulders. Spread the love (or to be more accurate, the workload)!

    How to choose your hiring dream team

    You’re looking to create the right mix of people who can handle the two major tasks in an interview: the assessment and the sell. You need talented specialists and team leaders who can judge the candidates on the skills required for the role, and evaluate how they’ll add to your culture. Meanwhile, you need friendly and persuasive team members to represent your organization in an authentically positive light, and effectively “sell” the role and your company to convince candidates to accept your offer.

    Start by reviewing your job description and outlining the key skills you’re trying to assess. Consider which employees would be well suited to evaluate candidates on these skills. If you’re hiring into an existing team that already has a few members, some should definitely be part of the hiring team. If you’re building out a new team that doesn’t have other members yet, you can pull in leaders from other departments in order to get perspective from people with broader work experience.

    You may also want to think about conducting cross-functional interviews to get a better sense of the candidate’s personality and general work style. That means including some interviewers for assessing technical skills, and others to judge culture fit. If you’re still relatively small and your executives have the bandwidth to do so, we recommend having your CEO or co-founder participate in the interview process as well.

    In addition to the hiring manager, consider one or two interviewers from the same team, one or two cross-functional interviewers, your CEO or co-founder, and potentially one or two hiring team members who can participate in a more casual way, such as taking the candidate to a [virtual] lunch or coffee, conducting the culture-add interview, or participating in the take-home assignment presentation.

    Each interview should include no more than four interviewers. That will keep you from soaking up too much of your employees’ time, and ensure everyone has space to participate. If you find some of your hiring team to be off-putting to candidates, it’s important to pull them out of the process as soon as possible so they don’t scare away hires.

    How to train your hiring team

    Next, you’ll want to create a training experience so that all interviewers use a consistent process for evaluating and giving feedback on candidates. Even if members of your hiring team have conducted interviews before, you’ll probably want them to participate in order to brush up their skills and align them with your company’s unique process. Interview consistency is key because otherwise you’ll have no way to accurately compare candidates who met with different hiring teams or answered different questions. That can allow too much subjectivity or bias to creep in. Most modern applicant tracking systems will provide a scorecard system to make consistency easier.

    Illegal interview questions from TheBalance

    Here are a few other topics to consider for your training:

    Many companies will hold an in-person interviewer training class on a regular basis (e.g. once per quarter) and may require each new interviewer to complete additional online training courses that cover other topics. Some aspects of interviewing are clear cut: There are questions that you absolutely can’t ask candidates, such as their age, race, ethnicity, gender, religion, disabilities, and marital status, for example (for more on non-compliant interview questions, see this article). But there are also many elements of interviewing that can vary from company to company, including the format and length of interviews and processes for collecting and reviewing feedback. We’ll go deeper into all the questions to ask during interviews in future recruiting guide blog posts.

    Be sure to schedule time as soon after interviews as possible to sync up with the interviewing team and confer about the candidate. This lets you have the most vivid discussion possible with impressions fresh in everyone’s mind. It also lets you compress the interviewing timeline so you can make an offer or move on to more candidates as quickly as possible. This is particularly critical after the final interview because delays can cause candidates to lose enthusiasm or let other hirers swoop in.

    Remember you don’t need a unanimous decision from the hiring team. You’re not looking for the least offensive average of all skills and traits. You want someone who’s the best in the room at something to help level up your company. Still, you’ll need buy-in from at least the key decision makers and people working closest to the new hire.

    We recommend dedicating some of your training time and resources to raising awareness of unconscious bias, which has become a hot topic in the interviewing world lately, and goes hand in hand with creating a more diverse and inclusive company. Everyone has natural preferences which can unintentionally shape their opinions of candidates. These can make it more difficult for people from underrepresented backgrounds to get hired, and wrongly favor candidates with similar work or education histories to founders and early team members. Many companies have begun to offer unconscious bias training to help limit some of this bias and make their hiring practices more inclusive. These two blog posts by the recruiting team at Cockroach Labs are a great introduction to this topic: How We’re Fighting Unconscious Bias and Open Sourcing the Interview to Reduce Unconscious Bias.

    To the same effect, you shouldn’t tolerate intolerant behavior from candidates. Remind your hiring team to be on the lookout for culture red flags like inappropriate jokes or casual sexism.

    Optimize your hiring team

    Once you have created or selected a training program, all interviewers should be required to complete it before participating in the interview process. Send out the message that interviewing is both a big responsibility and a badge of honor (not a chore!) — only high-performing employees who embody the company values should be invited to participate in the process. Remember that the individuals you choose to participate in the interview process are representatives of the company and you should be confident in their evaluation and decision-making skills. Consider if there’s a modest gift or reward you can share with employees for being pulled into the interview process given it will eat up time from their primary role.

    After you’ve established a cohort of experienced interviewers, you can also create an interview shadowing process, allowing a fresh group of team members to sit in on interviews with more experienced interviewers. While this involves some extra bandwidth initially, it will ultimately expand your number of available interviewers, allowing people to sub in as necessary when someone is not available. This also helps to avoid interviewer burnout and interview scheduling delays while bringing diversity of perspective to evaluations.

    Now you should understand how to develop your hiring plan, approve a new role, build out your hiring team, divide tasks, write job descriptions, fire up a recruiting process, and prepare for interviews. Sign up for our next chapter to learn about the hiring funnel. We’ll explore how to source job candidates and move from initial contact to final-stage interviews. To be invited to the next expert talent council event, email our Director of Talent Operations & Development Crystal Guerrero at crystal@signalfire.com.

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    Resources in this section:

    External links in this section:

    General interviewing resources:

    Professional interviewing help:

    Compliance trainings, anti-harassment, unconscious bias training, and diversity & inclusion training:

    • Everfi: HR, compliance, and risk training

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    About SignaFire’s Talent Program

    Recruiting is SignalFire’s superpower. Our Beacon Talent engine tracks all the top tech talent in the Western world, and can generate reports on the best and most poachable job candidates for any role. SignalFire’s talent program is led by former Facebook executive recruiter Mike Mangini whose team assists our portfolio companies with high-level strategy and on-the-ground recruiting to ensure you score your ideal hires. We helped make over 1000 job candidate intros to our companies last year — just one of the reasons we receive a net promoter score of 96 from our portfolio founders, over 85% of whom say we’re their most valuable investor. Want to start working with SignalFire’s Talent team? Contact this article’s author, our Director of Talent Operations Crystal Guerrero: crystal@signalfire.com

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