Recruiting without a strong budget

Question

I am currently a project manager in a tech start up and I do not have the budget to recruit new resources. Company is growing, we are starting to work with respectable brand names, but my budget for recruitment is limited to hiring expenses only interns (if lucky).

So far my recruiting experience has become frustrating:

• Many prospective candidates do not want to work unpaid/expenses only.
• the ones who are initially are ok with this idea, end up flaking upon receiving the job offer for a paid internship.

I have suggested that we use freelancers for the time being, boss agreed - but even then he does not want to hire anybody for above 9 dollars an hour limiting my options further. We are currently doing a lot of marketing and sales, so even though the number of clients has increased we are selling our product cheaply increasing the price of the product gradually.

I am under pressure to recruit new resources, any ideas on a workaround for this situation?

Answer 1

If your boss will not give you the budget to hire the quality of people you want, you have three simple options:

• hire cheaper people, and accept the associated risks and cost that will bring
• hire fewer at the grade you want, and accept that projects will take longer, and there is a higher risk of burning them out
• get more budget

It really is that simple. You can talk all you want about how to word stock options, or the value proposition, but that's what it comes down to.

If you are under pressure to recruit, the budget holder and you need to work through the pros and cons for each of those options and decide.

Answer 2

I am under pressure to recruit new resources, any ideas on a workaround for this situation?

Having a $9/hr budget certainly narrows down your options.

You haven't indicated the nature of the work, but here are a few suggestions:

• Break down the work into extremely simple tasks that can be accomplished by folks with no experience
• Consider hiring lots of part-timers who would accept minimum wage pay (High Schoolers might work for example)
• If the work can be done remotely, consider outsourcing to a part of the world with cheap labor
• If the work can be done remotely, consider using a service like UpWork or Amazon Mechanical Turk where freelancers "bid" on the job and you can choose only those who fit your budget
• Some companies these days hire one (or few) in-house workers for a department and augment that with remote, cheap, workers sometimes paid by the task.

Be prepared to constantly recruit, replace and retrain these workers, no matter which option you choose. In all cases, they are unlikely to stick around for long and can be expected to leave as soon as they can get a better offer.

Answer 3

You're basically asking how to make money out of thin air or get cheap labor.

Freelancers are in general expensive and the knowledge they gain does not stick within the company, sure they can transfer some of it but only partially. Freelancers are suitable for certain tasks for certain companies where you're seeking expertise that's not existing within your current company and you don't think you'll be needing it in a bigger scope than a certain defined project.

You can find cheap freelancers for sure, but you often get what you pay for and the cost of freelancers often builds up quickly, especially if you become dependent on their service. I don't think freelancers are your solution unless you've got a very well defined scope that needs to be tackled and will be usable as a standalone solution that does not make you dependent on the freelancers in the future.

Your best shot would probably be to hire people that just graduated and are looking for experience, but are full of potential. These people often require training from your current resources at a bigger level than experienced people would need. In the time span of 1-3 years you can expect their salary requirements to increase at a very rapid phase so you'd need to be ready for that when the time comes.

You don't want to be dependent on external resources and they'll often result being much more expensive anyway. Your best bet is to look for people who don't have experience but are full of potential, yet realizing they will very quickly need much more than plain experience and a minimum wage, realize that you need to pay them from the very beginning, people need shelter and food no matter how experienced they are. Either that or get a higher budget, or use the resources you have and learn how to utilize them better.

Answer 4

At any moment of the day, you can go to the "Gigs" section on Craiglist in any major city and see so-called "opportunities" for worker-bees with startups. Most offer low or no pay and a whole lot of promises, just as the OP here is attempting to do. They come, and they go. These posts have been on Craigslist for years and years.

Any person with an inkling of their own self-worth is not going to help line the pockets of OP and the bosses, and then still have to worry about their own life expenses after doing so. It's worse in major cities, where twenty-somethings can't even afford to live on their own due to the high rents.

The freelancing idea introduces risk. All it'd take is one 1099 employee getting hurt on the job; the state gets involved, decides that ALL of them are not "independent", and demands some tax money from the still-struggling business, and it's all over.

Perhaps a better approach would be to actually pay the people what they're worth, which might involve making pay cuts from OP and the management. It's unrealistic to leave all the struggling to the people on the bottom - if you're not looking to share the weight, they won't either.

Answer 5

You get what you pay for. If you want unpaid interns, you're going to get the bottom of the intern barrel. If you want $9/hour freelancers, you'll get $9/hour quality work.

If you cannot get more budget, your best bet is to try and look for untapped markets. Maybe high school students, junior/community college students, or college freshmen.

Those markets are less well tapped for good reason. You're likely to have lower average quality, but you might get lucky and hit the jackpot with someone who is actually good.

Answer 6

Be franc.

You're assuming that is some sort of privilege to work at this Start Up business. Assuming that people will simply be so exited to be part of it that they won't even charge for it. That, as you can see, is not real and is not working.

The main problem here is the culture of your company that sees this resources as a cost and not as a investment. Sure, you can hire freelancers or other cheaper resources, but what happens when the company decides to limit even further the budget for resources? Slavery, perhaps?

The best approach is to sit with your superiors and tell them that the current budget for recruitment is not enough to ensure quality nor the continuity of the bussiness in the long run. They really need to take the hiring proccess more seriously.

Answer 7

The best strategy is to use the money to buy some programming books. Make yourself work 7 days and the boss works 7 days as well. Do it yourself.

Answer 8

Many prospective candidates do not want to work unpaid/expenses only. The ones who are initially are ok with this idea, end up flaking upon receiving the job offer for a paid internship.

I'm not surprised - would you want to work unpaid, especially if someone else offers to pay you elsewhere?

I am under pressure to recruit new resources, any ideas on a workaround for this situation?

The problem is that you went along with the idea of hiring freelancers at $9/hour. (Sure, you could, but you're going to generally be getting poor quality work that may be more trouble than it's worth, and that's if you can hire anyone at all.)

I would simply say that the current budget constraints mean that you can't hire anyone at present, and that you'll have to revisit the situation when more budget is available.

Answer 9

Look for co-founders and high seniors rather than just for workers.

You may get unexpectedly good people working hard on your project if you invite them as co-owners, sharing the company ownership with you (reasonable percent of the equity, not 1-2 %). But you need to do something official/convincible to show you will keep your promises.

You may also play on offering high positions (software architect, etc) if you would manage to convince the developers you are likely to keep your promises.

As working unpaid is unsustainable, people will need to keep another job unless they can earn enough from yours. But some may decide to invest part of they free time on your project.

Of course, your company is your jewel, but think if it is really worth so much if you cannot even afford a salary.

Answer 10

This is coming years late, but I would add a fourth option to the three originally given, and that is getting a job at another company.

If the startup is hitting growth and acquiring new and better customers, and still not willing to pay adult salaries, what is the OP's situation like there?

Answer 11

Without a budget, you will have difficulty attracting quality people.

Other options:

1. Offer equity/shares
2. Outsource whatever you can (with freelancers)
3. Partner with local schools for internships (quality interns will expect compensation though)
4. Offer a title/role/responsibilities to a more junior candidate. (This may backfire)

No budget means your project is either not valued, you lack management buy-in, or you're on track to fail and seen as dead-weight.