Talent is often one of the biggest expenses a business will have. Being cash-strapped and having a limited budget in your business’ early days may seemingly put building your ideal team out of reach.
A way to get around this is by being creative with your first hires.
So how can you hire the right team when you have little or no money to pay? Here are 5 strategies you can follow.
1. Offer A Piece of Your Business
Many successful companies got their first hires by offering stock options where equity is earned over time, Nicolaj Højer Nielsen, an author, investor, entrepreneur, advisor and speaker based in Denmark writes in his book, The Startup Funding Book.
“An option is the right to buy shares at a given time in the future at a predetermined price (typically very low). This instrument is typically used when hiring early employees to whom you want to give equity. Instead of getting equity up front, they earn it over time,” Nielsen explains.
An example of stock option success is Facebook co-founder, Eduardo Luiz Saverin, who partnered with Zuckerburg in the tech giant’s early days and is now a multi-billionnaire thanks to Facebook’s massive success.
2. Offer Perks Rather Than Cash
There are creative ways that startups can entice good talent to work for them despite the lower salary, says Gary Whitehill, entrepreneur-in-residence at Techstars‘ Startup Weekend, one of the largest startup events in the world held in over 100 locations worldwide, in an article on Readwrite.com.
“Focus on offsetting lower wages with fun, engaging and accommodating perks that don’t cost the company a lot of money. It’s the best way to compete for the talent you need. Not every candidate will sign on to a vow of poverty to work at your company, but there are people out there ready to take a bit less in order to become part of something special,” he says.
Some ideas for life hacking your startup, Whitehill says could be using flexible scheduling and remote working where employees come in when they want or work from wherever they prefer. Public recognition is another idea you could implement where you praise employees in front of others – leveraging this innate need to build loyalty, he says.
3. Hire Young (Cheap) Talent
Hiring interns is a good way to grow your own talent at a low cost, according to a Business Insider article.
“By hiring promising employees who are still in school or are recent graduates, you can bring on board talented people with a lot of potential – at a price you can afford,” the article states.
Like with all your hiring, the secret is to find the right young person to recruit, says Kay Vittee, CEO of Quest Staffing Solutions, one of South Africa’s leading staffing solutions provider, in an article for SME South Africa.
“When hiring a young employee, place a candidate’s attitude over their skills. While skills are easily taught, attitudes are difficult to change but often determines how they apply themselves and their knowledge to a task.”
4. Exchange Skills With Your Network
Fledgling companies and startups, which are keen to save on cash, can barter for services. Bartering refers to the exchange of goods and services without any money exchanging hands.
Some business services that can be bartered are: bookkeeping, marketing, IT and deliveries, among others.
To increase your chances of success with bartering, tap into your network, says Sebastian Elliot, founder of UK-based Skillbound.com, an online platform that enables registered individuals and businesses to list skills they are willing to swap, in a interview with the Guardian.
“As well as online platforms such as mine, social media might enable your business to find potential skill-swap partners, while simply asking business contacts or even friends and family could help point your business in the right direction,” he says.
5. Outsource The Skills You Need
You don’t always need to employ someone to do a particular job, says Nicolaj. He gives an example of an app development project.
“Get an agency to develop the first version of the app, even if the result is much simpler than your grand vision. Do a beta launch and hopefully you will have positive feedback from the first users. Now you have something to show and this will make it easier to convince a technical co-founder (and later investors) to join,” Nielsen writes in his book.