VC Cliché of the Week
Human capital is top of mind for me right now. We are seeing a return to the late 90s when really good people are the scarcest resource in the company creation process.
Jerry Colonna taught me a lot about developing people and one of his mantras was "hire from within". His view is that if you have a worthy candidate inside the company that you know and trust, why would you go outside to fill the position. And after thinking about it a lot over the years, I tend to agree with him.
But hiring from within isn’t really possible when you have eight employees and need to grow to twenty by year end. And that is where many of our portfolio companies are in their development cycles.
But you can take the "hire from within" mantra to heart in this situation as well. Your current employees are the best path to new hires you’ve got. Way better than Craigslist, Careerbuilder, or any other job board.
I suggest three things that every CEO should do to take advantage of your existing human capital in the hiring process:
1 – Get everyone on LinkedIn and encourage them to actively use it "map" their personal networks. Then when you want to hire someone new, ask everyone in the company to search their personal networks on LinkedIn for candidates. There are other tools that can be used to do this, but I think that LinkedIn is a great place to start.
2 – Incent your employees to help you fill positions. I think a "spiff" of $500 to $1000 per hire is a great way to get everyone focused on the hiring issue. You should circulate every open job spec to the entire company (subject to the occasional hire that you can’t broadcast around the company). And talk about hiring in the company meetings. When your employees have an economic incentive plus are well versed in the specifics of the search, they can and do deliver great candidates.
3 – Always be recruiting "world class candidates". Never stop asking your employees for ideas. Every employee has former colleagues that they have tremendous respect for. Do you know who those people are? You should.
You can’t always hire from within but you can start the hiring process from within. It’s the best thing you can do.