The difficult first employee

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In the initial phase of a startup, many entrepreneurs collaborate with friends or form a team of close business partners with a shared goal. Everyone is an owner in the new company and feel a strong responsibility for its success or failure.

Suddenly, the company needs more workforce, and the time has come for hiring the first employee, for adding the first stranger to the group. This may be a big challenge for many startups. Will the new employee feel welcome? Fit into the group? Be as dedicated as the others? Do we now have to think about things like overtime pay, sick leave and vacation?

Choosing the right candidate

Yet, the very first question to consider is which criteria to pick the employee from. This is highly important, as early decisions about which people to hire have lasting consequences for new organizations.

After a study of over 180 startups in Silicon Valley, the American professor of management James Baron and his colleagues found that there are three common criteria that are used for recruitment: 1. skills and experience, 2. cultural fit, 3. long-term potential.

In an ideal situation, the recruitment will be mostly skill-based. The problem is that this requires extensive knowledge within human resource management. As a result, many startups base their recruitment on a cultural assessment, whether the new employee will fit into the organization.

Facilitating growth

This is not necessarily a bad decision, in the sense that it is easier to create a coherent organization when the employees are culturally similar. In this case, the founders can focus on other issues than human resource management, as a homogeneous group is easier to manage.

On the other hand, Aldrich and Ruef argue that having a group with the same type of people limits the organization’s internal variation. If one wishes to be an innovative firm and respond creatively to changing conditions in the market, it is wise to hire a person quite different from yourself – and perhaps even more skilled.

The first employee will most likely have a different role than the initial team members, and it takes hard work to build up a culture and an infrastructure in the organization that can handle newcomers. When you struggle with the first employee, remember that it will probably be easier to hire the second one.

Miriam Øyna

Miriam is Incubate’s innovation columnist. In her free time, she is dancing ballet, eats marzipan and comments on other people’s language. She is a typical eternal student, with a Bachelor degree in Journalism, a Master degree in Society, Science and Technology and has now embraced Business Economics.

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