📈 Startup Hiring Success - Compensation

Your Feedback Is Important

When Do You Ask About Compensation

• By the offer stage you have spent too much time and energy to find out you can’t make the compensation work.

• When you know compensation is in line you have more confidence in presenting a winning offer.

• It provides a reality check on how the candidate thinks and sees themself and their worth.

• It provides insight into how well the candidate understands your company and working for a startup.

Be direct so you get a direct answer:

“What compensation do you need to see to consider a job with us?”

Or

“What are your compensation requirements in order to make a change?”

Avoid “What is your current compensation?” In many states this is not a legal question. And, it is more important to hear about their expectations and thought process.

Make sure they cover base, bonuses, commissions, equity, and benefits.

• Ask about compensation requirements during the FIRST interview.

• Ask about compensation requirements in 2 to 3 follow up interviews.

• Repeat what they told you as you prepare and present the offer.

• If they do not answer directly or ask you what you are offering, try this:

  • Give them a broad range and let them know the exact numbers depends on the candidate - then ask them again.

  • If they say your range works for them, drill down and get a specific number. They need to participate as well.

• If you have a strong candidate take the conversation as far as you can and table it until the second interview. Tell them you will be addressing compensation more at that time.

Worth reading from Indeed:

“How and When to Ask a Job Candidate About Their Salary Expectations”

Friends and Family Follow Up

I include these comments here to present both sides of hiring friends and family. Yes, it is an effective way to bring in your early employees, but it does not work for everyone. Consider these risks:

• Despite all of the conversations you have ahead of time, you risk hard feelings and resentment if you need to let them go.

• Coaching and performance improvement efforts may become difficult due to the complex relationship of working with friends and family.

• Maintaining the barrier between work and personal life becomes more difficult over time.

• Emotions are likely to run higher during tough times.

• Saying “no” to them may be more difficult once they work for you.

Remember - someday you might need to let them go or address performance. How will it go?

A well balanced review from Indeed:

The Pros and Cons of Hiring Your Friends

1. Be creative: Balance all elements of the offer (base pay, bonuses, equity, benefits, and perks to make a complete offer. Sometimes it’s the perks that close the deal.

2. Do not stop interviewing other candidates until an offer has been signed. Your top candidate can suddenly take another offer.

3. Ask: “Who else do you talk to when making decisions about your career and job changes?” Find out who influences their decisions.

Recommended Reading

This week is something different. A great article about your first VC partner meeting as you raise your next round.

By Liz Wessel of First Round.

Here’s What You Can Really Expect When Pitching Your Seed-Stage Startup at a VC Partner Meeting.

Parting Thoughts

Our Mission

Help early-stage startups grow, recruit, hire, and stay true to their values and culture. Provide timely information and resources that help founders, CEOs, and hiring teams save valuable money and time. Listen to our audience and adjust as requested.

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