Startup Considerations While Doubling Your Headcount

Growing rapidly sounds exciting – but is it really?

I was recently asked, “What happens when your business doubles?” 💯 We’ve managed to pull a 2x growth a couple years in a row, and aiming to grow by about 60% or so this year alone.

And I’ve always viewed recruitment as a strategic endeavor aimed to accomplish specific goals over time. This means several things:

1. Hiring people for short-term jobs is often a failing decision, excluding freelancers or consultants.
2. Recruiting without a long-term vision will drop retention rates. Career growth matters.
3. Hiring only when demand is high is poor planning. Not enough time to shortlist, interview, hire, onboard people.
4. Keeping plenty of staff members slacking is poor management and an expensive venture.

🎥 Here’s what else matters when your team is scaling, troubles that companies face while hiring at large, and creative techniques to keep growing predictably over time.

Startup Considerations While Doubling Your Headcount

Highlights

00:00:31 – The challenge, headcount wise
00:02:20 – The slow way VS the other way
00:04:30 – Do you have an employer brand?
00:07:36 – Not everyone is a great manager
00:08:31 – Why most companies are not trying to be the fastest growing startup

TRANSCRIPT

What Type of Entrepreneur Do You Want to Be?

So, what happens when your team doubles? Now, in terms of building a company, people pick different kinds of priorities and different types of choices.

Some want to take it as “solopreneurs” or just entrepreneurs who work almost again by themselves, with probably some freelancers or consultants or some vendors or deal with something like drop shipping that doesn’t really require you to have so many resources or use some marketplace instead of dealing with marketing and basically pick different choices to keep scaling and keep growing.

Like just today I actually met someone, I’ve been knowing for a bunch of years. He has a super successful business. It’s probably as high as seven figures or so and he’s pretty much working a lot. He’s a broker. He is an agent’s broker – has tons of experience in some very high transaction costs industries. He’s a great professional and like, we just met today and he told me that he’s working alone which is again pretty admirable. I really love it and he manages to deal with everything by himself which is pretty awesome.

On the other hand, you have some other businesses like construction work or some warehouses where your budget or your revenue may be pretty low but you have a high staff, high headcount simply because the nature of the business requires lots of manual labor. And, often this labor means that those are people who are not necessarily super highly qualified but they need to move things around and package goods and a bunch of other things which again requires you to just hire the fast pace.

How It Was like to Start Doubling

Of course, you can imagine startups and we can imagine high growth tech companies or other types of agencies that land clients to the pretty high pace or land some partnerships and grow their customer base. And with that, of course, comes the challenge of growing the business in terms of headcount.

Now, we used to have about a couple of years when we grow. When we grew about double, it was when we were fewer people – of course, it was easier. Now for about a calendar year, we were going to be up with about 65% or so headcount wise, which is still something about 50%.

It’s not nearly double but again, it’s just a major expansion that we’re dealing with nowadays. So, a bunch of things happens when your headcount kind of grows exponentially.

What to Consider When Hiring Additional Staff

Now, first off you need to consider the experience of those people. Now, of course, if you’re hiring juniors or interns for something like that, you need to have people assigned for them.

For example, if you have a boutique agency of 10 people and you decide to create an internship campaign, you may have five people who actually start with little to no experience which isn’t necessarily super productive.

So, we need to decide how exactly to involve those people in the process.

The Internship Campaign: The “Slow” Way and the “Other” Way

There is the “slow way”. You know, you can do a kind of internship campaign that takes six to nine months. You give them tasks. You give them some responsibility and some ownership and expect them to do most of the heavy lifting by only allocating a couple hours a week or so with them.

Now, this isn’t super-efficient. It only works to people who are really self-driven people – people who are self-motivated who can do that by themselves. And by definition, not everyone is like this, regardless of their motivation and potential.

It’s just temporary, it’s just psychology, it’s just mindset, mentality, working environment, their close circle of friends and a bunch of other things. So that’s kind of ruling out one of the groups.

You have the other way to just bond someone shadowing one person from your team. But this may get exhausting. Now, first off, not everyone from your team is necessarily a great trainer, leader, teacher or whatever you want to call it, right? Some people are just built for that.

Some people or their mentality is all about education and leadership and training which is super awesome. But, that doesn’t make the other people who don’t enjoy doing that any bad right? They are just as awesome as well just in a different way, more or less.

You can also do a kind of hiring a full-time person who’s a coach, a mentor. You know, a business guru or of itself just training those people we have now. That’s another way to deal with it.

But if you’re a 10 person agency or a company or whatever, it’s probably an expensive resource because this means that someone who is both experienced in your specific industry like a senior person and also a great trainer, a great teacher, a great educator who’s able to convey all that knowledge, is passionate enough, is patient enough to deal with people and passionate enough to do that as well. Right.

The Importance of Employer Branding

So again, that’s fair for interns. Hiring more senior people – it’s a little bit more challenging. It’s doable if you really have a very strong brand. Because I already kind of explained in a previous video that it’s really hard to keep growing unless you have an employer brand, so I’m going to link the video (Why Is Employer Branding So Crucial For Startups and Business Owners?) in the comments, in case you’ve missed it.

But, bottom line, like if you’re for example a 50 person team. Right. If you’re a 50-person team and you need to grow double driven by 50 percent, this means adding 25 people to your team or even 50 people, right? And adding those people like, unless you really want to be an army of entry-level force which is rarely a smart thing to do, then adding so many people means you need to find talent.

And almost all of that talent is already working somewhere or they are consultants, they’re freelancers, they have their own agencies and basically do the business on their own. And convincing them to join you means that you must have a pretty solid track star product that’s able to revolutionize the industry as some guys from Apple would normally say.

And again this takes time. It’s really hard. You need a brand, you need a perception, you need to be everywhere, you need to be a lot of things in order to be able to convince that many great people to join you. And then with great people, you face different challenges.

Now, great people, they’re used to their own process of work, right?

So unless you’re are like a major leadership guru in the industry and they use guru on purpose because you know, it’s funny. Like not everyone is a guru out there for obvious reasons. So unless you’re like the leadership expert in the universe, then it’s really hard for experienced people to trust you and follow you and just believe that your process is better than what they used to do for the past 5 or 10 years which is again more or less expected.

Moreover, when you ask more people it gets pretty interesting as to how exactly to scale business.

Internal Promotion vs External Hiring

Now again you have a kind of small team like a team of 20, 50, 100 people. You already have some hierarchy.

But if you suddenly rapidly grow the company it becomes a little bit harder to manage within the same old company because you either need to bring in external management, or you need to promote some of your own troops or some of the new hires you bring in have to step up as you know some tech leaders, project managers and things like that.

And now all these cases may bring different conflicts. Now if you bring someone external as a project manager or a product major situate or a director of something they rarely know exactly what you’re up to. They rarely understand your process better.

Almost no company is as transparent as possible so that everyone from the outside can join the company effectively in a short amount of time. Also, it’s really hard for people who have been around for years to just trust someone external.

I had that experience myself in a company. The previous CEO appointed someone else as a CEO. A great guy but like me, we really couldn’t work together because he was used to a different industry, different processes, different mentality. It just didn’t work out for me and a bunch of other people so all of us quit and the CEO was no longer working for the company a few months later. So sometimes it’s not really a great decision that I’m trying to say.

Promoting people on your team is often a smart thing to do. But again, not everyone is a great manager. So you could just expect the top 5 people on the team are just suddenly going to become a manager, that’s not necessarily the right thing to do.

Some of them may not be suitable for this. Some of them may not want to do this. Also, it becomes tricky like if you have a 5 person team and you just want to appoint someone to be the team leader like, why did you choose them, like why didn’t you pick someone else on the team? This may create interpersonal conflicts also.

Again if you bring new talent who does know the company and who hasn’t been as loyal yet because he just joined. How can you promote them to be on top of the food chain? Because again this is counterintuitive and doesn’t really make a lot of sense if you think about it.

So again those are some of the challenges for a growing high team.

Additional Challenges

Let alone the fact that you know payroll, with onboarding, with just making sure that culture fit is the right, with making sure that people can onboard the pretty much same pace so they can join different projects. You’re going to face some troubles there for sure.

Some things that you really need to keep in mind that’s why most companies aren’t trying to be the fastest growing startups because fastest growing disrupting startups through causing other problems or like you have an office space may actually face a challenge of finding enough room in your own office to accommodate everyone else joining on the team.

So that’s yet another thing you need to think of and moving to a new office space is hard. And trust me I know that because we just moved in kind of last weekend.

So yeah that’s pretty much it, companies dealing with fast headhunting. It’s really tricky to find the right people. Sometimes, you’re in a rush and you’re trying to find people and just trust them blindly which is not necessarily the great thing.

We are very cautious about culture but you know I know lots of people who are just hiring whoever comes in because they need to build teams rapidly.

Just finding the right mentors, building the right infrastructure, the right processes building the right culture with lots of new people joining in who are going to build the culture and there they may have to change the culture more or less.

Those are plenty of challenges that most companies doubling their headcount deal with. So if you think to do that thing twice, this may or may not be the thing for you.