A Beginner’s Guide to Talent Management in Startups
Talent Manager, Talent Acquisition Manager, Talent Recruiter, Head of Talent, HR Manager, People Ops, VP of People, Chief HR Officer — chances are if you work in a startup you’ve heard some of these titles being thrown about.
But much mystery remains around the true role of talent management in startups. Is it just a rebranding of recruitment? Is it traditional corporate HR? And why should I as a founder spend hard-won cash on this role instead of on an engineer or salesperson?
What is talent management?
Talent management in startups focuses on attracting, developing and retaining great employees.
It spans the entire employee lifecycle from employer branding to recruitment & selection, onboarding, learning & development, all the way through to retention / exit.
Talent management also includes building great company culture, developing internal policies and overseeing compensation & benefits.
It is less focused on minimising risk than traditional HR and more focused on setting the organisation and individuals up for success.
So where do startups go wrong?
1/ Exclusively recruitment-focused
Often startups take a too-narrow focus of talent management, over-emphasising recruitment and ignoring the rest of the employee lifecycle.
The reason for this is pretty obvious — most founders tend to agree that recruitment is hard, time-consuming and expensive. Without someone dedicated to talent management, chances are one of the founders spends at least 50% of their time on recruitment, with mixed results.
If you can hire somebody internally to recruit for your startup, the savings on external agency fees alone will finance the salary of your first talent manager.
If recruitment is the catalyst for hiring a talent manager then that’s great! BUT. It’s essential to not think of recruitment in isolation.
Recruitment in isolation focuses on finding great candidates who match a job brief and success is measured in added headcount. But just getting people through the door isn’t enough.
Holistic talent management goes beyond pure headcount-focused recruitment to understand why people join your startup, what encourages them to stay and what would make them leave.
The answers to those questions lie in organisational design; how you build teams, how they interact with each other and how decisions are made. It’s also linked to culture and creating an environment where your employees can do their best work, and keep shifting that definition of best upwards.
Talent management must also have the credibility and scope to intervene and change these things to shift this balance in your startup’s favour. This is not the traditional positioning of HR and requires a change in mindset from founders to achieve.
2/ Including legal, admin & payroll in the brief
The second mistake I see founders make is including legal, admin and payroll in the brief.
Now don’t get me wrong, understanding how payroll and health insurance systems work, a familiarity with the local labour law and the ability to design a compensation and benefits policy are all necessary for any talent manager.
But establishing and maintaining contract templates, ensuring legal compliance and best practise, liaising with external accountants and lawyers and running payroll operationally are duties usually better suited to your finance or general operations team.
Put another way, the skills that make someone excellent at talent management are vastly different from those that make someone excellent at finance and general operations. It is unfair to expect one person to be able to span all of these skills and not end up being kind of average at all of it.
3/ Pitching too junior
The last common mistake I see is startup founders who are convinced of the above two points, but who are still hoping to find an excellent talent manager on an entry-level salary.
Sure, in early stage startups there’s rarely a cent to spare, but unlike other departments, your talent team will likely stay relatively small, and by investing a little more upfront, you’ll save yourself many costly mistakes in the mid-term.
How to get it right
Position talent as strategic within your startup
Include your talent manager in strategic conversations from the beginning. A great talent manager should understand the following:
What are our goals for this year, this quarter? What milestones must our product hit? How does our engineering organisation work? Where does revenue need to be and how do we plan to get there? What is our consumer brand and how does that help or hinder our employee brand?
Do this, so that when it comes time to recruit the conversation starts much earlier, and alternatives to recruitment (internal training, promotion, reorganisation, outsourcing etc) have already been considered.
Fostering greater business acumen in talent managers is one of the most effective things you can do as a founder to help your organisation succeed.
Look for these things
Successful talent managers generally have:
- A great, relevant network or the ability to easily build one
- Excellent project management skills
- High EQ and are of low emotional cost (i.e. don’t require much energy to manage)
- An understanding of the best modern HR & Recruiting tools
- Leadership skills to get founders and employees on board
- An ROI mindset, to track impact of initiatives and adjust based on data
- A genuine curiosity and ability to understand the particularities of the industry your startup operates in
Don’t be stuck in the past
You’ll notice I don’t include: X years of experience in the exact same role on this list. Is ‘having done it before’ the best indication of one’s ability to do it again? Not necessarily, in my book.
I’d argue that these above skills can be acquired independently and that there’s no one linear career path to becoming a talent manager in a startup…or to becoming anything else, really. But that’s a blog post for another day!
If you like the way I think about talent management, please reach out!
