As a startup founder, you're likely laser-focused on growth. We get it: You can’t do anything at all if the lights aren’t on. But if you want to survive and thrive as a company, investing early in diversity, equity, inclusion and belonging (DEIB) is critical.
In the Great Resignation era, talent is in high demand, willing to leave and often motivated by factors other than pay.
Unfortunately, we’ve seen startups make the four mistakes below over and over, and it costs them in time, money and talent. You can’t afford that. Take the time to understand why these DEIB mistakes have long-term costs and use our tips to course correct them now.
Mistake 1: Your hiring strategy is based on referrals
You managed to bring together a group of talented, motivated people. You’re doing well and they’re all excited to tell their friends and former colleagues about new job openings. Thanks to their enthusiasm, you’re filling jobs quickly, without even needing to post them or spend money recruiting. Win, right?! Wrong.
First, people’s networks are very homogeneous (three-quarters of white Americans, for example, don’t have a single Black friend). Despite a lot of anecdotal beliefs about the quality of referral hires, research actually shows that referrals don’t perform better. You’re not getting the best person for the job — you’re getting the easiest person to find.
You’re also setting up extremely bad company habits. Good hiring is a habit that involves consistently articulating what is important for each role, evaluating those criteria and making sound hiring decisions. Referral hiring kicks the can of good habits far down the road, where it is much more costly to fix.
If you want to be a company with a future, you will need a real hiring strategy. Get started now. Building out an effective hiring strategy will align your team on what matters most to your organization, ensure you are hiring the best and help you avoid the lack of diversity nearly all large tech companies face today.
Start with ensuring that referrals go through the same hiring process as all other candidates. Next, focus on your job descriptions. Make sure they clearly articulate four to five of the main skills required for the job, not a laundry list. Finally, ensure interviewers actually evaluate those skills in a meaningful way. These steps are the foundation of structured hiring, which 100 years of research shows is the most effective way to hire.
Mistake 2: You don’t have job levels
Startups move fast and startup employees are known for being able to “wear many hats.” Surely, in such a fast-paced and uncertain environment, writing out job levels doesn’t make sense, right? Wrong.
Without a basic job-level system in place, hiring, compensation and promotion decisions are made based on completely subjective criteria. Eventually, those people you’ve hired, paid and promoted are going to start talking to each other and asking how those decisions were made.
If you don’t have a coherent answer that you are comfortable sharing with them and your entire team, you’re in trouble. People are willing to accept difficult realities, like if current business needs don’t support having two senior engineers. They are much less forgiving of poor communication and unfairness.
Instead, use Radford or similar leveling rubrics as a guide to sketch out job levels for each of the departments at your company (even if it’s a department of one). This will help you write great job descriptions because it forces you to clarify the key components of each role. Then, you will know what to evaluate folks on when it’s time to make decisions about rewards, like raises and promotions.
Don’t worry: This system is flexible, and you can make changes as you grow. The important thing is that it puts your company in the habit of making people decisions based on predetermined criteria rather than on a bias-prone case-by-case basis.
Mistake 3: Your policies focus on the employees you have, not the ones you want
Your current team is mostly 20-somethings with big dreams, similar hobbies and few responsibilities outside of work. Maybe no one has a partner, let alone a baby. So it doesn’t make sense to write out parental leave and flexible work policies, right? Wrong.
Your benefits partly serve as a recruiting ad for your company. Your current team may be delighted by free snacks and a gym stipend. But ambitious employees who want a family (90% of Americans do) and the 31% of the workforce with children have scanned your benefits and decided to pass. Lack of a thoughtful parental leave policy is a sign that you haven’t thought about how to support employees with different life situations and needs.
An equitable parental leave policy tells all potential candidates that you think about your employees as whole people and are committed to supporting them over the long haul. PL+US offers a step-by-step guide to creating a gender-neutral, equitable policy. Parental leave is just one example, though. Think about all the talent pools you could tap that may be underrepresented in your company. What kind of policies and benefits could you offer to support (and attract) those folks?
Mistake 4: You don’t take onboarding seriously
You’re moving fast, so your new hire onboarding consists of a rushed email and a smattering of links and documents to get your new employee “up to speed.” That’s OK because those smart self-starters you just hired will figure it out on their own, right? Maybe, but it may cost you.
A rushed, cursory onboarding experience sets up your shiny new employees for failure and disengagement. When new hires are thrown into the deep end without a clear understanding of what is expected of them, they spend precious energy second-guessing themselves. (In fact, high-achieving individuals are especially likely to suffer from “imposter syndrome.”) And your employees aren’t robots — they have a fundamental human need to connect with others and fit in. Yet, 40% of employees feel isolated at work.
So invest in creating a thoughtful onboarding process. There are many great onboarding templates and checklists to get you started, like this one. Next, focus on communicating clear expectations by writing out the unwritten rules in a company handbook and laying out a clear first project.
Finally, don’t forget the personal connections. One belonging intervention that we use at Peoplism is to have all current employees share a mistake they’ve made. This not only helps people get to know their new colleagues on a deeper level, but research also shows simply learning that others have had to overcome their insecurities increases people’s sense of belonging and performance.
If you survive as a company, you will eventually need to have a robust hiring strategy, a job-level system, thoughtful policies and a thorough onboarding process. The question is this: Will you leave a sea of disgruntled employees rage-reviewing you on Glassdoor before you get to fixing these four common DEIB mistakes?
Don’t wait! Invest in your people practices and your DEIB strategy as early as possible. These four common mistakes are not just bad for underrepresented employees — they’re bad for all of your current and future employees, which means they’re bad for your startup.