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I'm running a small IT startup (private firm), funded from my own pocket. We are working on a development project, which is not yet generating income. So far I've hired 3 employees with a 1-year contract. This was the "budget" I was willing to commit to. Current progress is OK but could be better.

Now, I've received an open application from a young, but promising candidate. (Based on CV). I have the feeling his skills can speed things up. Hiring him would also imply increasing my risk, so he better be good.

Basically, I'm interested in a conversation but I'm not sure if I'm willing to hire altogether. Also, I feel responsible for my employees. This person seems to be leaving a job with a career possibility behind for something riskier. (Unlike the current employees)

Should I inform the candidate about this situation? Perhaps before the interview, to manage expectations?

Edit Current employees are aware of the company's state. They joined at the beginning of this production and are also involved in design decisions. This is more about the "new" candidate, which seems to be very motivated to join my company (at least on paper). I wonder if he's aware what he's getting into and at which stage I should ask/tell him.

  • Obvious question to me, but are your current employees aware of the state of your company? – Peter M Mar 30 at 11:25
  • Does the contract have any "out clause" with regards to performance? In other words if they are not meeting their metrics can you let one of your current employees go? – Donald Mar 30 at 13:20
  • Consider, simply hire the guy on a week-to-week basis, like many/most programmers in startups - a freelancer. It's fair all around and it makes it explicit what the situation is. Good luck with that product! – Fattie Mar 31 at 11:57
  • @Fattie, thanks for the suggestion. I'm afraid that such temporary employment contracts are not legal in Romania. Only under some exceptions 3, 6 or 12 month are allowed. – Tim Apr 2 at 6:53
  • @rath, that's fine, thanks. – Tim Apr 2 at 6:54
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Should I inform the candidate about this situation? Perhaps before the interview, to manage expectations?

Yes.

You'll find the best employees if they join your company knowing what's ahead. They will decide if this is the kind of company they want to work for - with all the unknowns that entails.

The worst case would be to hire someone who doesn't know what they are getting themselves into, and who decides to leave early. That wastes their time and yours.

It's something I'd discuss early on, probably in the first interview, since it's likely to be an important decision point. And if you aren't even sure you want to hire anyone, I'd mention it before that - so that the candidate could decide if the talk is worthwhile or not.

As with your current employees, you want to potentially hire someone who comes in with eyes wide open and eager for the challenge. Not someone who will be surprised and leave.

When I was hired as employee number eight in a startup, I was told all the details behind the company's hiring plans, financial situation, funding sources, and vision for the future. I had to leave a good job and take a 15% pay cut as well. I appreciated the transparency, since it helped me make a well-informed decision. I felt that the founders were being open and honest with me, and that goes a long way with me.

  • Would you suggest to tell the candidate early on in the hiring process or only after deciding on hiring, as @newguy's answer points out? – Tim Apr 2 at 7:15
  • 2
    I agree with Joe in this point - some candidates may felt that they were fed half-truths and may lose trust in the company. During the first interview, i would be completely open about current state, challenges and expectations, to avoid frustration later for both sides. anyway, the conversation does not need to have a negative mood: challenges can be put as motivation and being part of the foundation of a company will surely add lots of experience to an young developer. – Quaestor Lucem Apr 2 at 12:12
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Yes, I think it will in best interest for the company, candidate and yourself if the candidate knows the truth about current state of the company before joining as he is risking a lot by leaving other options.

Sooner or later the candidate might find it from you or others and when they do it might be worse than him not joining initially.

But this shouldn't be disclosed before the interview but after the interview if you wish to hire them.

  • Just for confirmation, I consider this a pretty good answer as well. But I've decided to inform the candidate from the first interview, as suggested by @JoeStrazzere's answer. – Tim Apr 2 at 12:18
3

I'm always in favor of transparency and honesty. Tell him the truth, and let him make an informed decision to take the risk or not. If he doesn't, you've lost nothing. If he does, you've gained a motivated employee who understands the situation.

Now take it the other way. If you don't tell him, and he finds out- he may quit immediately, which means you've invested time in him that won't bear fruit. He may quit as soon as he gets another offer, same result. He may stay there but be demotivated, reducing his output and possibly poisoning the culture. He may tell others about how he was tricked, causing you a bad reputation in the area. There's really no positive outcome to not telling.

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Should I inform the candidate about this situation? Perhaps before the interview, to manage expectations?

As part of this process you have to tell them.

If the resume doesn't wow you then do don't have to say anything specific just tell them you aren't hiring.

If you want to bring them in for an interview, then first conduct a phone interview and as part of that give them an idea that there might be financial concerns.

If both sides agree to an in person interview, then before making an offer you need to let them know the risks involved.

The risk to you and your company is that whatever you tell the candidate you should assume that the current employees will find out. Whatever repercussions that has you must be prepared for.

It should be noted that you are able to make this decision because you are the owner of the company. If you were just a team lead, or a manager, then you might not have the entire picture. You would also have to discuss this with the ownership or leadership above you. They would be responsible for evaluating the risks and benefits.

0

If you have to share publicly your current profits (due to being in the stock market or for other reasons) then this is something they can find out easily.

If your profit/current financial situation is not available for someone searching, I would advise keeping this information under wraps.

Despite the above, I do think you should ask for a phone interview so you can ask a few questions and try and understand why he wants to move and work for you instead, if you feel like he should progress to a face to face interview, then explain that as a startup, you currently are unable to offer job stability. Explain that you weren't hiring but he seemed like a good candidate to help with current project and bring it to fruition faster than currently expected. Ask him to think about it and that if he still wants it, you would be happy to meet with him face to face and talk about the position.

If during the phone interview you get a different feeling than you have right now, you can always send an email with the usual "Unfortunately we have decided to not take your application further".

-1

State the facts as they are, but do not share your specific funding situation. If you believe that this will bankrupt you, then don't hire him/her. I think something like "you know that we are a startup, and while currently things go as planned, the time when we can promise long-term job safety is not right now." would be enough.

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