10 Hiring Tips for Startups: All Your Questions Answered

Replacing a wrong hire can cost up to 200% of that worker’s annual salary, according to CultureAmp.

The costs easily add up: you need to post a job ad, source talent, screen resumes, and conduct various rounds of interviews. If a product designer from Spain with an annual salary of $90.000 USD leaves your team, you might need to spend up to $176.000 USD to replace them, not to mention the time you'd need to find a suitable candidate.

Startups usually can’t afford to make the wrong hiring decision because they face multiple constraints: there’s either a limited budget to find the right talent or little time to scale the operations because the business is growing rapidly.

We’re answering the 10 most common questions about startup hiring: from finding the best candidates for your team to choosing a suitable worker type to paying your global workers.

Who should you hire: employees or independent contractors?

Early-stage startups with fluctuating workloads may choose to hire independent contractors rather than full-time employees. This way, they get to work with experts who don’t need training and use their own tools to do the job. Hiring contractors is usually less expensive than hiring employees, since the contractor is responsible for their own taxes and contributions.

However, if:

• Your hiring needs involve key strategic roles, such as COO, CTO, or CFO
• You want more oversight and control of your team members’ workload, schedule, and results
• You’re looking to make your case for potential investors

Then, full-time employees may be a better choice.

See also: When Should You Consider Hiring Employees through an EOR Instead of Contractors?

Where to find potential candidates for your roles?

You can identify top candidates for open positions through several strategies. For example, you can use employer branding tactics to attract top talent and have them reach out to you. This helps talent acquisition teams cut recruitment costs and optimize time-to-hire.

Another strategy is to build talent hubs around the world, which boosts your local reputation and gives you access to talent pools of skilled professionals.

However, this technique often takes a lot of time and effort, which is why startups may choose to leverage social media platforms like LinkedIn to reach potential employees through online communities and networking.

If you have a limited hiring budget, you can source talent from more affordable countries with a lower cost of living.

See also: Global Hiring Guide and Employee Cost Calculator

How to efficiently track job applicants?

Your job postings may attract a lot of attention, meaning that you will have lots of resumes to screen. To speed up the hiring process and make sure you don’t miss out on great candidates, develop a standardized application form and an efficient interview process with as few steps as possible. Include initial screening questions, a take-home assignment, and the final culture fit interview.

Implementing these recommendations will help you build an unbiased and effective recruitment process. To maximize the efficiency of tracking job applicants, choose an Applicant Tracking System (ATS) instead of a spreadsheet.

An ATS will help you:

• Centralize candidate data
• Cut hiring costs and time spent on assessments
• Gain access to analytics to further improve your recruitment strategy
• Improve overall candidate experience

How to navigate international employment laws and compliance?

If you want to hire workers from foreign countries without relocating them or opening your local entity, you need to get familiar with local employment laws and collaborate with local vendors. They make it possible for you to pay your international employees, provide statutory benefits, and stay fully compliant.

When you start hiring from multiple countries, the number of local vendors increases, making your operations complicated, error-prone, and possibly inconsistent. This is why many companies choose an employer of record (EOR) to handle the legal and compliance intricacies of global hiring.

With Deel, you can count on full global compliance without lifting a finger, thanks to:

• Regularly reviewed and updated contracts tailored to each country’s labor laws
• 200+ legal experts
• Easy compliance documentation management through the platform

See also: Everything EOR: A Guide to Employer of Record and Hiring an International Employee: 3 Options and an Alternative

How can you ensure proper worker classification in your team?

Startups often begin building their team by hiring contractors and freelancers, as this type of work relationship imposes fewer legal responsibilities on the employer (or client). As contractors take on more work or engage in your core business activities, they may start resembling employees, which could potentially trigger a misclassification investigation by tax authorities.

To avoid the financial penalties and lawsuits that may follow employee misclassification, you need to know exactly how local laws define contractors, and when they’re considered employees. Hiring a legal professional to advise you on this topic and help you craft airtight contracts is the best route here.

How can you protect your intellectual property?

As you put your startup idea into practice, you may face several data security challenges. When sharing confidential information online and across locations, you need to take certain security steps to protect your data and intellectual property.

This step is particularly important if you work with contractors—in some countries, intellectual property belongs to the contractor, unless their contract states otherwise. Establishing solid security audit protocols and signing NDAs and DPAs with your collaborators and employees is a good way to ensure intellectual property protection.

See also: How Do Global Teams Protect Their Intellectual Property

What are the best practices for onboarding new hires in startups?

A streamlined onboarding process can improve employee retention, according to SHRM. New employees are more likely to stay longer at a company if during their first 90 days they’re able to establish connections with their coworkers, understand their role and responsibilities, and become a productive team member.

Some of the best practices for onboarding new, international workers involve:

• Creating well-structured 30, 60, and 90-day onboarding plans with outlined activities and timelines
• Providing pre-boarding materials to the new hire (such as an employee handbook or company policies)
• Assigning a dedicated buddy to guide and support the new employee through their integration
• Building a role-specific training program that includes the necessary tools and resources
• Encouraging cross-team interactions and helping the new team member collaborate with other departments
• Clarify performance expectations and role responsibilities while regularly providing feedback

See also: A Guide to Onboarding an Asynchronous Worker [Tips and Checklist]

With Deel's new Workflow Builder, you can automate manual, repetitive tasks and supercharge your HR processes: work faster, with less admin, for a better experience for workers everywhere.

How to run payroll for a distributed startup team?

Running payroll for a distributed startup team can be complex due to varying tax laws, employment regulations, transaction fees, and payment methods across different locations. 

You need to:

• Determine tax withholding requirements, social security contributions, and statutory employee benefits
• Select a payroll provider
• Collect employee tax forms and other information
• Choose a payroll schedule
• Calculate and process payroll
• Manage currency conversions and bank fees for international money transfers
• Generate and distribute pay stubs

The two most common options for paying workers at startups are running payroll in-house using payroll management software or outsourcing payroll processing to a third-party vendor.

Both solutions have their pros and cons and depend on various factors, like your budget or the expertise of your staff. Using payroll software in-house is usually less expensive, but requires a knowledgeable HR department. 

See also: Guide to Global Payroll

How to choose the best HR tools to manage my global team?

Startups should invest in an HR tech stack as early as possible to create automated, efficient, and scalable processes that support hypergrowth and positive company culture.

When building your HR tech stack, especially when choosing your HRIS, look for:

• Flexibility
• Scalability
• Global-first orientation
• Customization options
• Integrations
• Self-service options
• Access to analytics

HR tools that easily integrate with other workforce management software, provide automation and customization capabilities designed for global teams, and have reporting features to help you make informed business decisions are the way to go.

See also: A Guide to Creating the Ideal HR Tech Stack

What are some innovative perks startups can offer to attract talent?

Startups may struggle to offer significant monetary incentives due to limited hiring budgets, but they can attract ideal candidates to their team by offering non-monetary perks or long-term benefits.

For example:

• Remote work and similar flexible working arrangements
• Stock options or profit sharing
• Employee referral programs
• Professional development opportunities
• Flexible and unlimited PTO
• Employee recognition initiatives
• Access to exclusive company tools and know-how

Build a winning team for your startup with Deel

Deel streamlines HR processes and helps you hire, onboard, and manage an international workforce effortlessly.

Automated, customizable workflows and compliance tasks enable startups to scale with confidence without worrying about tax and benefits admin, while hiring the best talent from over 150 countries.

Learn how Form3 grew their workforce by 20% with Deel and hired 96+ people from 30 countries.

Sign up for the Deel platform if you’re ready to get started or book a 30-minute product demo with our team for an expert Q&A.