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I have a small startup and I need to hire people with a different skillset than mine. The challenge is to find people with that skillset who want to work in a startup.

So it seems the alternative is to hire people without the required skillset and do some training (even I don't have it by myself) - but the challenge is: I have to compete with governments unemployment support for people who are not able to just enter the workforce with the knowledge they have. With this I need to pay a very high salary for people not producing any value for the company while they are learning the skillsets needed. My concern is that once they got the knowledge they need, they will jump to bigger and "safer" companies and I lost the investment in them. (this is a country in Scandinavia with unemployment support which is higher than many positions in many cases if we calculate all the different support possibilities, salary taxes, etc.)

So my question is: Does anybody have any experience/knowledge in how to invest in unqualified people (in a small startup) without running too big of a risk for them to jump somewhere else when they get useful skills?

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    It's not clear to me where the problem lies. You don't have enough budget to pay at the market level people with the required skillset?
    – nicola
    Oct 15 at 8:52
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    If they don't want to apply, it means that what you offer is very likely not enough. Work on that, rather than trying very risky shortcuts.
    – nicola
    Oct 15 at 8:59
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    @SmallDev If you are prepared to pay over-market, tell the recruiters. That might motivate them more. You could also try to recruit from outside your country.
    – Roland
    Oct 15 at 9:29
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    What qualifications are we talking about here? Oct 15 at 10:04
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    Not to be unnecessary blunt, but your view on people is pretty grim. Unemployment mooching, inept, looking for a stepping stone... I'd work on myself if I was you. Do you have what it takes to lead? Oct 15 at 18:04
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There are already many good answers stating what can you offer to people to stay and work in a small business that is not able to provide good salary. I would like to cover another aspect of this question that was not yet touched.

I would strongly advise against hiring inexperienced people to work in a startup. There are already many risks associated with starting a new business and you probably do not want to add any more of them.

I have been working in a startup myself for 5 years. The idea to hire new people in that workplace was pretty much the same: let us hire inexperienced people (in this case - students or fresh university graduates) for a much less than average salary, give them a rough guidance on doing things and let them figure out the rest by trial and error. This resulted in very long project delays, negligible sales and the company retaining the "startup" status for 10 years after its foundation. The turnover of employees was very high, the original team is gone for a long time now and the company still struggles to make meaningful sales.

Things to consider about this approach to hiring people:

  • As a startup you really want to start selling ASAP. Hiring inexperienced people will likely result in long project delays because they have to learn much more than someone with work experience.
  • Inexperienced people are much more likely to make costly mistakes, especially when left with no guidance (and considering this is a startup, you will probably have no time to spare training them because of the workload).
  • People working for a much lower than the average salary (comparable to governmental unemployment support) are likely to become resentful soon and their productivity levels will go down. Salary increases wont be possible, because you will be making lower sales due to people learning things slowly and not being able to completely focus on the success of your company.
  • Your gut tells you right: people receiving much lower salary than than the average for the position will be very inclined to jump ship once they become more qualified at their job.
  • Working at a startup is very stressful because job security is low and many things depend on the success of every individual employee. You don't want to have people working for you who have additional stress to learn things quickly.
  • You yourself are more likely to become resentful towards your employees due to lack of commitment from their side, their inability to deliver results or other reasons.

Hire some experienced people which will be your key employees. Share equity with them so they will be less likely to jump ship. You have much bigger probability to save money and time by doing so and if your business is successful (as I have mentioned, there are many more pitfalls), this will pay off.

If you decide to go with low salary for inexperienced people approach, refer to other answers which suggest many excellent benefit options. I might add, that the ability to work while studying is also a good benefit for such employee.

Since the OP compares his salary offer to governmental unemployment benefits, I assumed that the offer is way below the average.

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  • Thank you for a very good answer. The comparing was not for qualified people, but for unqualified people. Here its kind of destructive for work. Even you take the avarage salary of people, in many cases the unemployment benefits are higher than the average salary. (because you have many different ways for support, which combined give you a decent and easy life. things like payed rent, payed electricity, payed kindergarten and ofc just money to use)
    – SmallDev
    Oct 15 at 12:36
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Working for a startup is risky, because they're much more likely to fold that larger more established companies. They also usually (although not always) expect staff to work very long hours (especially as deadlines approach), so for many people they're not the most appealing option.

If you're struggling to attract people, then it's because your competitors are offering something better than you are. You can't offer more security than they do, so you need to look at the things you can control:

  • Higher salaries
  • Better benefits
  • More (paid) holiday
  • A better environment
  • A better culture that gives them more control
  • Growth and progression opportunities

And of course, one of the biggest things that established companies can't easily offer: equity

If you can't offer people enough to attract them to your startup, then you don't have a viable business. If you offer all of that and still can't attract people, then something about you or your startup is putting them off.

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    This. The founders will be investing their own money, putting in long hours, etc, instead of taking a stable job elsewhere, because they have equity and want to own their own business. They need to share that if they want others to do the same. Oct 15 at 10:58
  • Very good answer. Some of the points are not so valid here because of how the laws regulating many things, like paid holiday, long hours
    – SmallDev
    Oct 15 at 12:58
  • @SmallDev there may be laws about it (as there are in many countries), but are they actually followed? You're not meant to work more than 48 hours a week anywhere in the EU, but a lot of people do, especially in startups. In terms of holiday, I don't know how many days you get as a legal minimum - but you can always offer more than that.
    – Gh0stFish
    Oct 15 at 13:48
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Provide an attractive workplace with a reasonable wage to the people you hire. Then they are less likely to jump ship.

If you can't do that, your business modell is flawed.

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  • It could be said every successful startup (Microsoft, Apple, Google, Facebook, etc) has done exactly this to some degree. They all offered something that attracted the people they needed at the time in order to eventually be successful. As to the reason I used software companies, well they are probably the rarest examples, a company that produces a physical product has a relative simpler end goal. Produce a product, sell a product, then ship it.
    – Donald
    Oct 16 at 14:46
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"Money" is not the only incentive to take on a job. The main motivation you can use is "desire to learn".

On the positive side, the people who will apply on a job that offers a learning opportunity will have that desire - which can be more valuable to you (as their employer) than any specific skill. On the downside, you might loose them if you cannot offer the opportunity for learning once they learned all that they need for the job at hand. So if you just want them to do a specific job reliable for years without any development, you should take another approach.

Another incentive is the human desire to do something of value. If your startup does something that helps humanity or something that fascinates people, you might use that as incentive. If you are just developing a spreadsheet-tool for oil-rigs, you might not have any chance to bait employees this way.

A third incentive is the human desire to "participate". Unlike the desire to do something of value, this is more of a social drive: Many would prefer working in a team each day instead of staring out of their apartment-window or at the TV-screen for months or years. If you want to use that, you might aim at potential applicants that are near (or past) retirement age. Or applicants that feel challenged being included in social groups (who this might be depends vastly on your culture).

So, how to keep your employees once they learned more skills? First, make sure to increase their income accordingly. Second: Not everyone likes jumping ships as often as it may seem here on workplace.stackexchange . Most Europeans do not like moving to new places just to earn a few bucks more. And if you have a positive work-culture and team-spirit, they may just like working at your place.

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