Early-stage businesses need to cut their coat according to their cloth. They have multiple financial and operational challenges to address. Cash flow is unpredictable, and the pressure to scale is real. The joy of bringing an idea to life is often offset by these humbling realizations.
Growing startups and smaller sized businesses need to know how to best allocate their limited resources. Lean hiring–a simple approach promising improved efficiency– is a way towards agility. It is aimed at businesses specifically, but the strategies discussed here will help anyone trying to get the best out of their professional relationships. Through this article, we will try to get a better idea of the concept and see how small organizations can lean hire their way to success.
Where does the idea of lean hiring come from?
In the most basic words, lean hiring means recruiting only the talent you need. This is borrowed from the world of lean manufacturing systems. A look at the core principles of lean manufacturing explains how simply this works:
- Defining value=understanding what the customer needs
- Mapping the value stream=understanding which business processes create value
- Creating flow=make sure the remaining valuable processes are in sync
- Establishing a pull system=limit storage
- Seeking perfection through continuous improvement
This boils down to a strategy of providing value with fewer resources.
Choosing to work only with people who you know will contribute to the org sounds like a common sense decision, but it is an achievement.
This is how it transforms the business it’s applied to.
What are the benefits of Lean Hiring?
Lean hiring pays for itself. There can be two ways to approach this. A business owner can mindfully choose between a freelance software engineer or hire an in-house team of two developers. Or he can offshore the requirement. Both would lead to lower costs, but the second option would be far more beneficial in the short- and long-term for smaller orgs. Whether your understanding of lean hiring is fewer people, or fewer processes, or offshored processes, chances are a lean team would be more
Efficient and agile
A smaller team has defined roles and goals. There is a straight route to work ownership and accountability, allowing them to quickly identify problems and fix them. This also leads to more flexibility because backup plans are firmer and unforeseen circumstances are accounted for.
Skilled
Lean teams have fantastic professionals because they need highly skilled talent to make up for 5 moderately talented people
Less expensive
This is not the goal of lean hiring, but this is, very often, a quickly noticeable by-product of the process. Less people means less salaries, but the top-skilled workers also cost more than many of their peers. This balance has to be negotiated internally, but most companies spend less on lean teams.
More transparent
Too many cooks spoil the broth. Sometimes it’s difficult to see through the haze of multiple training programs and employee reviews and focus on growing the business. A tighter and more skilled team will give owners more visibility over processes and output.
I’ve decided to Lean Hire. What should I do next?
When you reassess your resources and reorganize accordingly, you’re setting the stage for something big. How you proceed will decide the results.
Focus on what to keep, not what to discard
We create roles and processes for a purpose. Before we decide to shake things up, we must consider what they are adding to the org. If a startup is selling software, you need developers right away but an internal marketing team isn’t an immediate necessity.
Define ‘needs’
What can an organization not afford to waste? This is something only the core team can define. Time and money are constant, but what about unnecessary meetings? A good tidy-up will eliminate redundant processes and tasks. If something is not directly impacting the company’s growth, it’s of no use.
Define ‘skill’
Not every skilled person is an asset. Not every skill is an asset to your company. High levels of skill are needed for advanced work, and that is a very limited realm in any industry.
Remember that multiskilled candidates exist
A salesperson who can also do some coding is a good investment. Startups need diverse skill sets.
What are the best ways to implement lean hiring methods?
The most effective way to lean hire is to go global.
Building an offshore team, or offshoring entire processes is the best way to reinvent the wheel. A talented team of marketers or developers in a country where Western currencies have more weightage is the most scalable idea for growing/small enterprises. More often than not, at least three (software/creative/HR) departments in an office can be successfully offshored. It would also allow founders to focus on the processes that grow the business.
Lean hiring can also mean working with freelancers and contractors. Hiring full-time employees can be expensive, especially when considering the costs of benefits, taxes, and training.
A freelance designer can create branding collateral for a startup, while an IT contractor handles its website and manages it for a year.
Remote work is a lean hiring prototype. Many startups are located in places like London, New York and San Francisco–places where cost of living is too high for most people. It reduces overhead costs too, since physical offices don’t need to be rented and equipped.
Many professionals prefer remote work, and they would be more attracted to a position that offers it.
Whichever method you choose, start small and slow. Kick it off with a core team that can handle the central functions of the startup. Add colleagues with complementary skills as the business grows.
Is Lean Hiring for everybody?
No solution can claim to be universal. It is difficult to have lean teams in industries like biotechnology, aerospace, or AI. They need large teams with niche expertise, and cutting that down would lead to poor output.
Fast-growing startups also need to expand fast. A tech startup that has just secured significant funding may need to rapidly expand its development, marketing, and sales teams to capitalize on the market opportunity. Lean hiring would be fatal to healthcare and pharmaceuticals. Hiring one wrong employee might result in dangerous medical mistakes, compliance issues, and regulatory problems.
But that’s not to mean that AI or biotech companies cannot offshore their less crucial processes. This is always a viable option.
Conclusion:
Lean hiring is a means to an end. Your specific lean hiring strategy will depend on the goal you’re aiming at. Startups on a shoestring budget (and we know how common it is to encounter such businesses) will find immense value in lean hiring.
Start mindfully by identifying what brings most value to the business, and zone in on that till you understand what the ‘futile’ bits are. This process can be repeated at fixed intervals for further optimization.
It may not be for all industries, but for most founders, all savings through this process–costs, time, energy– become essential resources they’re free to reallocate.
