The top 5 recruiting challenges CEOs face in a business
How much recruiting have you had to do as a CEO or founder? A whole lot, probably. There’s a blessing and a curse in this job: on the one hand, you get to build your entire team from scratch. On the other hand, your recruiting job can be lonely. As the person in command, there’s a limited number of people you can go to for advice when you want to hire the right talent – a recent survey of CEOs finds that even those at the highest level struggle with ‘talent optimization’.
Here at Workable, we directly address recruiting challenges, as spearheaded by our two founders, and those challenges are the driving force behind our platform and content. This time, I wanted to get insight from someone who combines the experience of founding a company and recruiting for a living.
Hung Lee, experienced recruiting expert and curator of the popular newsletter Recruiting Brainfood, is also the CEO and co-founder of workshape.io, a recruiting platform for software engineers. In a recent conversation, we talked about talent acquisition from the CEO perspective. Drawing from his own experiences, he indicated five common recruiting challenges of CEOs:
1. The transition to external recruitment
By “external”, we mean hiring complete strangers – people you’ve almost never interacted with.
In the early stages of a company’s life, hiring happens from within the company’s network. For CEOs, especially, it’s not just good practice to harness the power of their network – it’s practically a given at this stage. As Hung Lee mentions, investors probably factor in the connections of a CEO before they make an investment decision. But, this type of recruiting isn’t going to work for long.
Of course, the benefits of referrals cannot be underestimated – they’ve regularly been cited as one of the top sources of hire. And it’s normal to want to employ people you know. Hung did it himself when he founded workshape.io. But, he adds:
Where it becomes problematic is when your company scales to a certain point where the CEO or the founding team runs out of suitable people they know for the positions they need to fill.
That’s a critical tipping point. Because CEOs have been accustomed to hire people they already have a “bond” with, they’ll apply the same strategy when hiring complete strangers. They still tend to trust their instincts and want to feel the same confidence with candidates they’re not familiar with.
“Well, guess what, buddy?” retorts Hung. “You’re not going to feel that confidence with people you don’t know. It’s a fundamentally non-scalable way to recruit.”
What could be done?
First, you need to recognize this as a CEO. “Often, CEOs misattribute the failure to feel confident about a candidate to other reasons,” says Hung. “They’ll blame the recruiters for not giving them the right candidates, or they’ll blame the market for not producing these amazing people anymore.”
The key is a change of mindset; you must shift your recruitment strategy and rethink the way you make decisions. It’ll be difficult – Hung admits he still struggles with this. But, he also says, it’s a great opportunity to introduce the art and science of recruitment into your company.
2. The trouble with HR
The trouble with HR is that it’s usually on the sidelines. CEOs may struggle to hire great people, yet don’t prioritize the building of a dedicated recruiting department. For example, a recent (otherwise brilliant) article featured in Hung’s Recruiting Brainfood advises leaders on when to hire their executive team depending on their company’s ARR – and completely excludes a VP of HR, or similar roles. Hung commented on this: “That’s probably some evidence of the relative lack of status of the people function.”
Case in point: he shares a personal example of how sometimes the people function is overlooked:
I had a conversation with a fellow CEO a month ago. Super smart guy, running a great business. But then he needs to hire a VP of this, VP of that, and so on. And he’s got no recruiter doing it, and I’m thinking, “What are you doing?” You’re going to a recruitment agency, potentially paying thousands for each one of those senior hires, while you could definitely use somebody internally to help you.
If you don’t bring in adequate help, it’ll ultimately hurt your bottom line. It means more costs, more effort and not necessarily good results. If you struggle finding the people you need, or if you’re just too jammed to dedicate enough time to interviews, maybe you really need someone who really excels in the people function.
What could be done?
The right time to hire the first person for your recruitment team is just before you’re ready to transition to external recruitment. In the words of Hung Lee:
“[T]he moment to hire a recruiter is just before you run out of people you know. It’s like an epoch change; the end of the dinosaurs, here come the mammals. That’s when you need to have someone in your business as a Head of Talent who’s going to organize [your hiring].”
So prioritize building the recruiting team, and all those other big hires will follow. Your network is of utmost importance here; you probably know a great HR pro or you know someone who knows them.
3. The unbearable lightness of delegating
You know the motto, “if you want something done right, do it yourself”? Well, at the founding stages of a business, CEOs inadvertently follow this. They do almost everything – from fundraising and public relations to marketing and, of course, hiring. As mentioned above, CEOs may find it hard to accept that, at some point, another person should be in charge of the hiring process. The amount of delegation needed – despite freeing up their time – is often unbearable. Hung specifies:
Take Steve Jobs, the classic example of a CEO who never really relinquished control over certain aspects of the business. Some CEOs will persistently be there on the hiring side, too. [..] I was speaking with a friend of mine who’s a CEO; he’s still involved in interviews for everyone coming into the company, a 250-people business already.
But, CEOs don’t tend to be experts in recruitment – usually, the area of expertise that brought them there is in sales or operations. This presents a problem. Never mind the sheer added burden of the recruitment-related workload on top of everything else – it’s difficult for your recruitment team to schedule interviews and move the hiring process forward when they’re reliant on your direct input for each relevant step of the process.
“What you sacrifice there is speed and scale,” says Hung. “You will not scale easily, if the CEO is the bottleneck in the hiring process.”
What could be done?
Hung emphasizes that CEOs aren’t alone in their struggle (or the necessity) to learn how to delegate: “We all interact with others in our work and we need to trust them to a certain degree to deliver for us.”
Of course, character traits might play a role in the ability to delegate. A perfectionist would probably struggle more with delegation that others. But, as Hung says: “We’re all flawed in our own ways, and the key is just to know what our flaws are and understand that there’s another choice.”
So, learn to delegate, and then actually do it. Often, those you’re delegating to will do the job better, the recruitment process will speed up, and you’ll have more time to focus on those other important CEO tasks.
4. Humans are biased – CEOs, too
Do you ever feel that you’re seen as a superhero who can do no wrong? Well, unless you’re a hopeless egomaniac, you know that’s not who you are. Some of our evolutionary traits – unconscious bias, stereotyping, and the almost omnipresent emotional factor in decision-making – make all of us flawed. And that includes CEOs.
Hung elaborates on a common misconception about recruitment specifically: “The [hiring] philosophies, the techniques, the tooling, are designed with the idea that everyone makes rational decisions based on what’s best for the business.
“But actually, that almost never happens. There’s divided loyalties, there’s misalignment in objectives in every stage of the process, there’s all kinds of complexities. I think the myth of rationality needs to be expunged.”
And it has been – but maybe not fully for those at the higher levels of management. People who work for you might see you with a mix of fear and admiration, and they’ll inevitably trust that you always make carefully calculated decisions based on facts and logic.
This means CEOs must be extra careful in how they make decisions, because those decisions will likely not be questioned. “’Oh, he’s worked for Google. Therefore, he must be smart,’ or, ‘Oh, she was a designer for Instagram, she must be amazing at UI,’ are things you may say,” notes Hung. And few will argue with you even though you don’t have enough information to make an informed decision.
What could be done?
Hung emphasizes the role of technology:
There’s no question that technology has a huge part to play. In my view, one of the most valuable contributions of products like Workable is to reduce the stress levels involved in recruitment. If a system could help you handle the recruitment planning and logistics effectively, that can remove a lot of the rushed decision-making that increases the number of mistakes.
Self-awareness also has a big role to play, too. Think about what prompts you to make a decision. What’s your main motivator? If it sounds like a disputable argument, take a step back and try to apply objective hiring methods throughout your hiring process. Having a recruiting software with built-in capabilities to help you evaluate candidates can help you be more objective.
Also, it pays off to build and maintain your team with people who aren’t afraid to tell you that you’re messing up.
5. Formulating a culture
The concept of company culture has been around for quite a while – and it’s getting more and more important. A recent survey from Glassdoor indicates that three-quarters of job seekers consider mission and culture before they apply to a company, and half of them consider culture to be more important than salary when it comes to job satisfaction. So, culture is one of those things that you need to have pinned down because candidates will ask about it.
But, what is culture, really? It’s shrouded with debate. Should you even actively try to shape it? Our own CEO, Nikos Moraitakis, was skeptical about the way culture is defined and promoted in the corporate world: “Culture is an emergent property, not the materialization of a manifesto,” Nikos says.
Hung Lee agrees, but he adds that the culture of a company and its services will inevitably be based on the axioms that founders accept. “There’s no question a CEO has a huge impact on what the culture is. Axioms are in the DNA of the business, and if they change, the company will change, for good or bad.”
So, yes, culture isn’t rigid. It’s being shaped and changed and defined by everyone in the company. You don’t need to make a list of values and hang it on the wall. But, be clear about the axioms that make your business unique, as Hung clarifies:
Not a hundred axioms, but you might want two or three that will become your north star, the guiding compass of you and your business as you navigate this future. If you have some of these values, it keeps you at least with a philosophy as you progress. Cultures are dynamic, yes, but can you influence the dynamism? Do you want to shape it? Those are the questions I think a CEO needs to answer alone.
What could be done?
In a blog post, Jocelyn Goldfein, formerly VP of engineering in VMware, shared a lesson from her then-CEO: “Culture is the behaviors you reward and the behaviors you punish.” Hung mentioned this as a good measure of what culture is. “How does an axiom manifest itself?” he asks.
So, let’s say that one of your ‘values’ is inclusiveness. You really want to build a company that’s open to everyone with talent no matter their characteristics or background. It’s useful to go further and ask:
- Have I thought about what a transgression looks like? What does it mean if someone doesn’t behave with inclusiveness?
- What are exemplary embodiments of inclusiveness? Have I thought about a scenario where someone has embodied inclusiveness?
Go deep, and “find what makes the values real; turn them from words on a board to actual behaviors that you stand and live by,” says Hung.
Of course, he doesn’t forget that these things are dynamic: “Human beings create a new thing almost every time they interact with each other. And every axiom you try to establish is a roll of the dice. Companies have burned down because of flawed axioms.”
Moving onward and upward
So, these are just five major recruiting challenges of CEOs. There are lots more, but if you learn to look at your own shortcomings as an impromptu recruiter, bring in a recruitment expert, delegate those crucial tasks, and be aware of your own biases and your company’s culture-defining moments, then you’re well on your way to overcoming those challenges. Go forward, onward, and upward!