One of the biggest indications of the future success of a company is its people. This is especially true in Web3, where culture and connections can matter as much as technical knowledge and expertise. And even though hiring is a key part of building a business, it is often seen as a problem that can be easily solved by posting on a job board, or perhaps even a process that can become automated. I’ve been recruiting in high growth start-ups for over 10 years, and there’s a lot more to it than meets the eye.
Here are some pitfalls I’ve seen teams make, which I’ve transformed into tips on what not to do. Please don’t do the following:
I- Hire now to figure out the role later
You might know somebody brilliant and phenomenal at their job. But until you figure out what job you need them to do for you, you won’t be able to evaluate whether or not they’d be good at it. That software engineer who’s a master of their craft might be a terrible manager. The brilliant VP of Finance from your last company might not be up for the risks and rewards of fund-raising. Take the time to write – and agree on – a job description, along with a vision of what a successful hire will look like. Only then do you go find that person.
II- Forgo salary bands
The salaries in the web3 space swing far and wide, so come up with a range that makes sense for the role and your business, and stick to your ranges so you have pay equity across your team. That could mean paying somebody more, or less, than what they’re asking for when it comes time for an offer.
Where should you start? Research the market, focusing on organizations that are similar in size, stage, and industry. There’s no one great authority on salary data, so do some digging. Here are a few starting points, but pay attention to location and know that bonus, equity and token comp can double or triple a base depending on the company:
- Web3 Careers Salary List (there’s a tech and non-tech list here)
- Know Your Worth in Web3 salary transparency spreadsheet
- Glassdoor, filtered by type of company, size and location (or look for specific competitors). The “salary calculator” is too broad to get meaningful numbers, so dig deeper.
- Crypto Jobs List salary survey (note: you have to give to get the data here)
Your token and/or equity compensation is a valuable incentive to attract the people who believe in and want to contribute to what you’re doing, and weed out those looking for the highest bidder.
III- Over-comp your talent
Annualized salaries are usually the largest percentage of a tech company’s budget. Imagine you have 10 employees, and just completed a $5 million raise. Now imagine that each of those employees is being paid a base salary of $25,000 more than fair market value annually. Four years from now (not including raises) you will have burned through 20% of your funding because you didn’t research the market up front.
IV- Under-comp your talent
Likewise, under-paying will cost you in performance and retention. Heard of the quiet quitting rebrand to “acting your wage”? Unfair wages are the foundation of that trend, and losing an employee after you’ve trained them has a dollar sign attached to it. In addition to the cost associated with the downtime of finding a new employee and ramping them up, there is the cost of the institutional knowledge or key relationships you lose with any valuable employee exit. And of course, former employees have a tendency of recruiting their former colleagues to their new places of work.
V- Ignore pay equity
If one of the principles of Web3 is transparency and fair compensation for contributions, salary must be a part of that discussion. It’s not a question of if, but rather when, your employees will share their salaries. If they’re not fair and equitable across the team, you’re in trouble internally at best and legally at worst. Don’t be the subject of that tweet-storm: If you’ve already made some inequitable decisions, adjust pay now to fix it. P.S. Being transparent around salaries is the law in several places, with the trend only increasing.
VI- Hire a homogenous team
Chances are your fellow founders and early employees are your college friends or former colleagues. Data shows they’re probably not a very diverse group. Data also shows that you’ll already be behind organizations that have diversified their hires from the beginning.
To start out ahead, expand your network so you can hire people you don’t already know with diverse backgrounds: gender, race, nationality, economic background – a team with unique experience has a competitive advantage. The best way to do this is to get yourself out there – attend events as an ally for groups traditionally under-represented in the space. Share your postings on their Discords, or tag them on twitter. Also, start thinking about the locations where you are open to hiring. You can look beyond North America and Europe, even if you’re timezone constrained. Several countries in Africa are also in GMT, for example. Central America is in Eastern Standard and Central time zones.
Not to mention that sharing power and decision-making across a diversity of expertise is also the purpose of decentralization. Our work should embody our ethos - not just in terms of what we are building, but for whom we are building, with whom we are building, and how we are building.
VII- Manage resumes from your inbox
There are tools for receiving applications and resumes called Applicant Tracking Systems (ATS), like Greenhouse, Lever, BreezyHR, or Workable. The cost of these can range from $0 to $15,000, depending on the features you choose, the size of your company, and the number of jobs you have open annually. You can use them to include knock-out questions in your applications to cut down on unqualified candidates, sort candidates by role, and categorize them by skill. And most importantly, an ATS can allow you to look back into your database and find people for future roles. Your talent acquisition might feel transactional for that first role, but really, you’re building a long-term practice, and there will be applicants you can’t hire now but want to stay in touch with for the future.
VIII- Wait until the last minute to figure out logistics
What are the countries you’ll hire in? How will you ensure you’re in compliance with the laws of the locations where you hire? How will you run payroll? Provide health insurance? Will you sponsor visas? You’ll want to have all of these ducks in a row long before you’re ready to make an offer.
Who’s doing it right?
Web3 is young enough that we don’t have a lot of examples to lean on yet, but here are some web2 ancestors you can look to for inspiration as you scale: Atlassian (great remote hiring processes), Asana (well-structured interview process), Textio (known for their stellar inclusive job descriptions).
We’ll cover more on the logistics piece in future posts. In the meantime, feel free to reach out to me with any questions - I would be happy to meet and discuss further.