Hiring and Talent Acquisition Strategy: Building Your Team
Master hiring. Plan headcount, recruit effectively, close top talent.
Key Takeaways
- Hiring plan: Annual (budget headcount by role), quarterly (refine plan based on growth). Formula: Revenue per employee (£250-500K typical SaaS). Example: £5M ARR, target £350K per employee = 14 people needed. Current 12, hire 2. Priorities: Sales (revenue-generating), engineering (product), CS (retention). Typical split: Sales 30%, Engineering 30%, CS/support 15%, Marketing 10%, Admin 15%. Timeline: Hire 3 months ahead (long ramp). Cost: £500K salary + £100K recruiting cost + £150K ramp inefficiency = £750K per senior hire (payback 12-18 months).
- Recruitment channels: Job boards (LinkedIn, AngelList), recruiting firm (20-30% commission, faster), employee referral (best quality, fastest), networks (founders reach out). Funnel: 100 applications → 10 interviews → 2 offers → 1 hire (typical ratios). Cost: Internal recruiting £50K/year, firm 20-30% commission, time/opportunity cost. Quality: Employee referral > internal recruiting > job boards > firm. Strategy: Heavy employee referral (gift/bonus for hire), recruiting firm for hard-to-fill (senior eng, CFO).
- Interview process: 1) Phone screen (5 min, basic qualification), 2) Technical interview (skills, 30-60 min), 3) Hiring manager (role fit, 30 min), 4) Culture interview (team fit, 30 min), 5) Reference checks (do it before offer). Timeline: 2-3 weeks (quick beats slow). Offer: Base salary + equity (vesting 4 years, 1-year cliff). Comp: Benchmark similar companies + stage (early = lower salary, higher equity; mature = higher salary, lower equity). Onboarding: Assigned buddy, 30-60-90 day milestones, regular check-ins (first 3 months critical).
Building a High-Performing Hiring Process
Attracting and hiring the right people. **Hiring plan and budget** Annual planning: 1. Forecast revenue growth (e.g., 50% growth) 2. Target headcount (revenue per employee, typical £250-500K) 3. Current team size 4. Gap = hire plan Example: - Target revenue: £5M - Revenue per employee: £350K - Headcount needed: 14 - Current: 12 - Hire: 2 additional (1 sales, 1 CS) Budget per hire: - Salary: £80K (avg for growth company) - Recruiting cost: £5-10K - Ramp cost (3 months inefficiency): £20K - Total: £105-115K per hire **Recruitment strategy** Channel effectiveness: | Channel | Cost | Speed | Quality | Volume | |---|---|---|---|---| | Employee referral | £2-5K bonus | Very fast | High | Steady | | Internal recruiting | £40K annual | 4-6 weeks | Medium | 3-5/year | | Job boards | £0-300/post | 4-8 weeks | Low | High volume | | Recruiting firm | 20-30% commission | 2-4 weeks | Medium | Steady | | Networks (founder network) | Relationship | Varies | High | Dependent | Recommended mix: - 50% employee referral (best talent, fastest, cheapest) - 30% internal recruiting team - 20% recruiting firm (for hard-to-fill roles) Funnel ratios (typical): - 100 applications → 10 interviews (10%) - 10 interviews → 3 offers (30%) - 3 offers → 2 accepts (67%) - 2 accepts → 1 start (effective conversion: 1 per 100 applications) **Interview process and timeline** 5-step process (2-3 weeks total): Step 1: Phone screen (5 min, recruiter) - Basic qualification (role fit, expectations) - Sell role/company Step 2: Technical screen (30-60 min, hiring manager) - Assess core skills (for technical roles) - Can they do the job? Step 3: Hiring manager interview (30 min, hiring manager) - Assess fit for role - Will they succeed? Step 4: Culture fit interview (30 min, peer/team) - Assess team culture fit - Will they thrive here? Step 5: Reference checks (2-3 references) - Verify track record - Avoid surprises Offer: - Base salary: Market rate for role + stage - Equity: 4-year vest, 1-year cliff (typical) - Sign-on: £5-20K (sign-on bonus, negotiate if needed) Compensation: - Early stage (pre-revenue): Low salary, high equity (£60K + 0.5-1%) - Growth (£1-5M): Medium salary + medium equity (£80K + 0.1-0.5%) - Scaling (>£5M): Higher salary, lower equity (£100K + 0.05-0.2%) **Onboarding** First 30 days (critical for retention): - Day 1: Welcome, computer setup, office/team intro - Week 1: Role overview, team meetings, product deep-dive - Week 2: First projects, pair with buddy - Week 4: 30-day check-in (how going?) - Month 3: 90-day review (role fit, ready to ramp?) Success metrics: - 90-day retention: 95%+ (if not, hiring problem) - Time to productivity: 3-6 months (fully productive) - Satisfaction: Regular check-ins, address issues