Monday, December 12, 2011

You're hired - Part I

Getting the right people is always the toughest challenge for a start-up to get off the ground. As a bootstrapped business you don't have the luxury of spending large sums on people with crazy salary expectations and inflated egos.

My hiring experience started a couple of years ago during a long vacation to India where I had decided along with another friend to  spring up a small team for our software consulting business.  My experience was from positive. It might be an outsourcing paradise, but it was definitely a hiring nightmare. Attrition is rampant, professionalism is almost non-existent and quality of candidates are terrible.

So how does the Indian service business still thrive? Redundancy is key. If you need 2 hire 4, if you need 10 – hire 15. That’s one bet . With all the redundancy, doesn’t the attractiveness with cost start to fade? Absolutely, but it’s still at attractive price points for most.

We used as our advertising medium  and after much trial and error we hit upon a good equilibrium of being able to:
  • screen out resumes. 
  • assess candidates with a 15 min phone screen
  • screen basic technical abilities with a written test 
  • And finalize candidates with an on-site interview

The outcome – 350 resumes screened and 5 offers made (with a 20% hike in current pay). None of them accepted.

For those looking to hire a software team in India, don't underestimate the hiring effort. Especially as a bootstrapped start-up. For this kind of business to work well, you need at least  10 people to make this work, so unless your business justifies it, stay away. My interactions with a number of heads of software companies and start-up also echo this sentiment. Finding quality people is the toughest challenge. Many companies focus their marketing efforts to attract employees than to earn new business -- interesting.

Our lack of success turned out to be a blessing in disguise. What we focused on instead was finding good consultants with the right skill set. This was more expensive on the micro level, but  turned out to be extremely efficient over all. You have the flexibility of scaling up and down hours easily. Most consultants themselves are entrepreneurs and are more efficient and professional than salaried employees. Had we started this effort as a small team, we would have been caught with our pants down if they had decided to leave mid way for a 10% hike offered elsewhere.

For my machine vision solutions business  - we have had much better luck with hiring and finding the right people. To be covered in part II.

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