One of the biggest challenges for startups is finding the right employees, and finding them is just the beginning. In today’s tight job market, the most qualified workers have a lot of options, and recruiting can be an uphill battle. So how do you attract prime candidates? Aside from high salaries and good benefits, think about where employees want to live. What cities have affordable living costs and provide plenty of amenities? Chances are those cities are also great for startups with business-friendly tax policies and access to fast business loans and financing opportunities. Read on for data-based insights about how to find the right employees for your startup.
Choose the Right Location
Many entrepreneurs immediately flock to Silicon Valley — incubator of companies such as Apple and Google. But the best city to launch a startup is actually Las Vegas, according to a new study of the best cities to start a business. Sin City has the highest employment growth among all 50 cities studied. Its rate of 8.5% over the past 12 months is more than double the average city employment growth rate of 3.9%.
Las Vegas also boasts the lowest corporate tax rate of any city studied (0.65%) and a very low incorporation fee ($75). In addition, Nevada doesn’t levy a personal income tax. Vegas has an affordable workforce too, with the average employee making nearly 20% less than the national average, $51,244.
Cities that round out the top five include: Salt Lake City; Orlando, Florida; Miami; and Atlanta.
Avoid the Wrong Location
While some cities are business friendly, others are especially unaccommodating to new startups. In general, these cities have high fees, high taxes, an expensive workforce, and mediocre employment growth.
Most cities to avoid are concentrated in the Northeast, with Hartford, Connecticut, falling to the bottom spot in the ranking. In Hartford, an incorporation fee costs $455 — more than three times the national average ($135). This has led to sluggish business growth. Residents filed only 3,927 business applications per 100,000 people in the last five years. That’s about one-third less than the national average (5,931).
Boston, Chicago, Pittsburgh, and Buffalo, New York, round out the bottom five.
Hire Based on a Candidate’s Future
Great hiring managers can see a candidate’s potential. Your initial cohort of employees is going to grow along with your company, so you want to find workers who have high ceilings. Passion, curiosity, demonstrated competence — even in an unrelated field — and a willingness to learn can make up for an underwhelming resume.
Don’t Hesitate to Extend an Offer
When you find the right candidate for a job, bring them on as soon as possible. If you saw their value, others will too, and there are few things more demoralizing than losing the perfect candidate to a competitor. Hiring early and fast is also practical. Many founders, especially in a company’s early years, take on too much work, and their performance suffers accordingly. Early hires can free up much-needed bandwidth by handling day-to-day business and recruiting matters, such as lead generation on LinkedIn, so founders can refocus on the big picture.
Reinterview Multiple Times If Necessary
Chemistry within your company is important, and hiring a horrible boss for employees or a contributor who doesn’t work well with others can negatively impact productivity and morale. Once you’ve interviewed your candidates, call your top choices back and interview them again. Let them interact with other employees to make sure they’ll have healthy, sustainable relationships.
Have a Hiring and Onboarding Process in Place From Day One
The early days of any startup are chaotic, and it can be tempting to hire initial employees in a rush. But establishing clear hiring protocols and crafting a consistent onboarding process will pay dividends down the line. This is especially true if your startup experiences exponential growth, and isn’t that the dream of every founder?
Retirement Plans Attract Employees
When it comes to startup perks, we all know about pingpong tables and free snacks, but some of the most attractive perks are traditional retirement plans. The average retiree has just more than $191,600 in retirement funds, barely more than a third of the expert-recommended $514,800, according to a recent study of retirement finances. Nearly a third haven’t saved any money at all.
More than half (54%) of retirees said they don’t think their former employers contributed enough to their retirement, and a surprising 31% said their former employers didn’t offer pensions or 401(k) plans. Retirement plans and employer contributions are great recruiting tools, and if a retirement crisis materializes, they’ll become even more important.
Luke Babich is the Co-Founder of Clever Real Estate, a real estate education platform committed to helping home buyers, sellers and investors make smarter financial decisions.