Jen Paxton is the VP of People and Talent at Privy. Jen is a leader in the PeopleOps space and has partnered with Drafted to release a 5-part series for PeopleOps leaders that are just starting out or at the frontlines of a hypergrowth startup.
Being at a hypergrowth startup is like being on a rocket to the moon. It is an amazing and thrilling ride. As a PeopleOps leader, it’s your job to get that rocket to the moon as quickly and safely as possible and without losing parts in space. It is really easy to think that the only way to have a successful business is to hire a ton of people. But that can be a huge pitfall if you do not have a proven business model or clear expectations for how each hire is going to contribute to your overall business goals.
Runway is super important when it comes to growing your company - how you make sure you have enough runway is simple: budget. The best place to start is by thinking about how much budget you need vs. how much you can get and how far it can get you. That’s why it is so important to have a strong partnership between PeopleOps and Finance. You need to balance the needs of managers with the overall budget. Understanding how much money you can burn and working with managers to fill the gaps on their team with the budget they have. This might mean that sometimes you have to get creative to address everyone's needs.
This can sometimes feel like a game of Tetris so after I have a clear understanding of what the budget looks like from finance I sit down with managers and talk through the hires they would like to fill the gaps on their team. Some managers will come in with a clear plan of what skills they need on their team to accomplish their business goals while others benefit from having a brainstorming session about skills gaps. The overall goal of these sessions is to have the manager understand the overall budget and find creative ways to fill all of the gaps with the money they are allotted.
After a round of funding, a company can burn through all of that capital quickly by hiring as many people as possible. One of my first startups did this, I was eager to prove myself and my recruiting skills so I worked hard to fill every role without questioning if we actually would need this hire long term or how this hire would fit into the overall success of the business. Money made people less creative when it came to solving problems, instead of finding a way to automate something, we threw in a new hire to accomplish it. Another manager was so in love with a particular candidate that they hired them without knowing what they were going to do for their team. Now sometimes I have seen a manager hire a “superstar” and have it work out but in my experience, it is the exception and not the rule. I look back now and wonder why I was so shocked that we ran out of money and crashed and burned.
If you've been in a situation like that before you will quickly realized that hiring managers don't always have the big picture in mind when they get excited about a potential new hire. I think this is why I’m so cynical when a manager comes to me out of the blue with a person that they have to have on their team that wasn’t originally in their hiring plan. I push back on the manager and have them help me to understand how this person fits into their department’s business strategy. What’s the ROI for this hire, what gap on their team does this hire fill, and what are the 1- 7-30-60-90 day goals for this person? If they can’t answer these questions, then we take a step back and reevaluate. This is particularly hard for managers that can tell a persuasive story but do not have the data to back up their decision. As a People Leader, you need to be able to recognize when your manager has a halo effect for a candidate or wants to be opportunistic because this candidate is on the market.
After you have hired your first team member and you both are up and cranking, how do you determine what the next best hire is going to be (and when that will need to be)? This may be a good time to do a skills gap evaluation and to think about specializations within your team. This will help you to determine what the ratio should look like between Recruiting, HR, and Operations. When I think about the ratio, first I go back to the goals of my team, if our current team is cranking and we are shifting to focus more on hiring and the goal is to hire 10+ people, then we will need to add a recruiter next. Typically at a smaller company, I say that if you are hiring 10 or more people in a year (especially if you are hiring engineers) you should hire a dedicated recruiter. Often at smaller organizations, you will need to do more sourcing which takes more time and effort than if you were filling 20 roles at a bigger more established organization.
Another pitfall that can happen when you are hiring too quickly is hiring from only people you know or that your team refers. I’m all for referrals but if not done properly you can end up with a homogeneous team which can lead to a lack of diversity of thought and people on your team. As a PeopleOps leader you can drive initiatives through your referral programs such as a underrepresented minority referral bonus or allowing external referrals from outside your company that bring more voices into the conversation around hiring. You can build relationships with organizations that focus on bringing underrepresented voices into the forefront. It’s your job to find the right individual to do the job but also someone who can be a culture add to the team, potentially push the team to think of a new way/process. If you do this, you will find that a variety of perspectives can lead to increased innovation.
Being at a company in Hypergrowth mode is unlike anything else, every day will be a new challenge as you are scaling. Partner with your hiring managers and finance to find a balance between the right amount of people for the things you want to accomplish and the money you can spend to not go broke. Trust your instincts and don’t forget to enjoy the ride.
This blog post is the fifth part of a five-part series. In series four of How to be a PeopleOps Leader at a Growth Startup, Jen Paxton will share How to scale your PeopleOps and Talent teams. In case you missed it, check out part one - Setting Up for Success, part two - How to Win Executive Trust, or part three - How to Build a Vision for Employer Brand and Culture at Your Company, part four - How to Scale Your PeopleOps and Talent Team