Amidst the slew of layoffs in 2022 that show no signs of slowing down moving into 2023 and the bear market in tech, how can startups continue to scale their organizations, and do so sustainably?

Even for companies with enough runway and in a market with increasing talent open to work in Southeast Asia tech, the cost of making an unfit hire is still quite significant, and wrong hires are rarely isolated occurrences (tied to process issues rather than chance).

In an inflationary market, cost-efficient opportunities to scale organizations are more likely to be found closer to home, and thus necessitate companies getting their “houses” in order (i.e., financials, processes, culture, etc.). Finding talent “closer to home” would involve developing internal resources, planning long-term, and leveraging adjacent networks.

In line with this theme of hiring “closer to home”, we outline seven tactics and mental models picked up from various panels, podcasts, and sharings from founders over the past three years on Insignia Business Review.

TLDR

(1) Hire internally for market expansion.

Hire locals from the target market long before the company expands to a target market. Train them to leadership roles and when the company does expand, invite them to lead market expansion or play a key role in the operations there. 

There is always going to be a chance that this might not work given the preferences of the talent, but having locals of target markets in the company can already provide early learnings on how to localize the organization once the expansion happens in full swing. This ultimately contributes to saving costs on navigating sociocultural nuances in hiring and retaining talent in target markets. 

(2) Hire internally for leadership through special projects teams.

Special projects teams can be a useful funnel for identifying people with the potential to become leaders in a fast-growing organization, given the problem-solving nature and broad scope of the work of these teams. Hiring leaders in these teams as well from the get-go is also likely to make these special projects teams more effective at what they do.

Related sharings from growth-stage CEOs

(3) Invest in training and education to create more options for internal hiring.

This can involve regular one-on-one for professional growth and issue resolution or even investing in educational resources (e.g., joining virtual conferences, online tutorials, joining training, and getting certification relevant to the function). It can also be a simple as guaranteeing a competitive salary. Ultimately the philosophy here is to treat key functions as value generators rather than cost centers, and employee development costs as long-term investments rather than short-term burn. The goal is to enable these employees to keep up with the latest in their functions and the industry, which is all the more relevant for technology companies, and at the end of the day, leverage these learnings in their roles. 

Related sharings from growth-stage CTO and VP of Engineering

(4) Develop relationship-driven pipelines and check-ins for senior/leadership candidates.

The reason for developing long-term pipelines with candidates especially for senior and leadership roles is to reduce costs of misalignment on culture fit. Because culture fit is so hard to judge in a few interviews, it is important to already get a sense of this fit over time through specific observed qualities and experiences (e.g., are they responsive, do they have shared interest in the mission of the company, do they have workplace issues in their current job, what ambitions do they have for themselves), perhaps even before the person is a candidate. It also enables the company to quickly fill in gaps in the organization with people they have already known for more than a year or longer. 

Related sharings from growth-stage CEOs

(5) Hire in terms of scale and think of the potential of candidates 12-18 months down the road.

Founders and founding teams often juggle multiple hats in the early stages of the company, but this juggling has to be diluted throughout the organization if it is to mature and scale. In this regard it is important for the founders / founding team to be self-aware, be able to step back, and assess the biggest gaps in the team (i.e., what are their ceilings/functions where they have hit the limit of their capabilities that the company would be better off with someone else doing?). 

And rather than just thinking about who can immediately fill in these gaps, it is also cost-efficient to think ahead and view the role as progressive rather than static. People hired will often look for progression in their roles and if they hit their own “ceiling” too fast that may result in unproductive costs for the company as well. Where is the candidate going to be 12 to 18 months from now if they are hired?

Related sharings from growth-stage CEOs reflecting on early-stage learnings

(6) Hire close to home — think customers and partners.

There are two reasons why looking to target customers and partners for potential hires would help. First is that they would already have empathy in terms of the pain points being solved by the business. Second is they are likely to have a better or less-blind understanding of the business (e.g., what kind of spending it would entail from the customer, the overall user experience, etc.) than the founders. 

This approach also falls into the long-term relationship-building tactic mentioned earlier, as some customers may already be using the product or service for a significant amount of time and thus already have a kind of “relationship” with the company and are likely to better understand the company culture. Of course, these are just probabilities and not certainties, but better to place bets on a familiar outsider than a stranger, right? 

Related read on an customer-turned-C-level hire and a CEO on hiring for empathy

(7) Get your “house” in order before going out to the market.

None of the tactics above work without a house that is in order. That means having the appropriate processes to train for internal hires, the cash to invest in professional development, the time and people to build long-term relationships with potential candidates, and even the quality of customers from whom there may be potential candidates. As the adage goes, how can you love others if you don’t love yourself? The same first principle applies to hiring smartly and cost-efficiently.