8 of the Most Common Talent Management Mishaps Made by Startups

In today’s marketplace, just the word “startup” conjures images of a glamorous, fast-paced career where innovators are coming together to change the world. While that might be true for some startups, it’s not the norm.


This past week has really highlighted some of the issues happening with startups and technology companies in general. Two big scandals broke. One involved the raucous sex and drug-fueled culture at insurance software platform Zenefits. The other happened when a young Yelp employee penned an open letter to the company’s CEO highlighting her plight as she struggles to make ends meet living in the expensive Silicon Valley area.

It would seem based on these stories and many others like them that startups are facing a bit of an implosion regarding their talent management strategies. It’s not surprising because talent management is difficult for even seasoned companies, but it can be particularly hard to navigate for young up-and-coming companies, with employers who may not necessarily know the best practices for managing and maximizing their employees.

So much of the focus is on innovation, being the first to market with new products and raising capital that talent management can go on the back burner. The result may end up like what we saw at Zenefits, however. It seems like the talent management and culture issues may be actually related to their larger issues of compliance and regulatory problems. The newly named CEO of Zenefits, David Sacks, is working simultaneously to fix both sides of the issues as he takes the reins.

We compiled a list of some of the most common talent management mishaps made by startups, to serve as a guide to what not to do.

  1. Unclear Job Titles

We understand that startups face a lot of challenges and uncertainty, which can lead them to hire employees only to have them become jacks of all trades. Startups may only have the budget for a few employees, which may lead them to have people cover all different aspects of the business.

While cross-training isn’t a bad thing, not having clear job titles and roles can lead to confusion, frustration, and an inefficient talent management strategy. You may also find that you’re putting employees into positions to which they’re not well-suited as a result to try and cover everything that needs to be done.

  1. Unconventional Schedules

There is this persistent idea in Silicon Valley and among many startup leaders and employees in all areas of the country that the very word startup evokes the concept employees need to work around the clock. Startups tend to rely on technology and communication apps as their primary ways of getting in touch with one another, and that really destroys the framework of the traditional work day.

Employees are expected to be within reach at all times, whether it’s the middle of the night or a holiday.

This isn’t a good precendent, and it’s only going to lead to burnout and frustration on the part of employees.

  1. Micromanagement

People who lead startups are often incredibly passionate. This may be their dream come to fruition, and they want it to be perfect. They may nurture it like a child, which can lead to extreme micromanagement.

A startup CEO or leader may feel it’s best to have his or her hands in everything, but the result for employees is a feeling their employer doesn’t trust them and they don’t have the flexibility required to do their job in the best way possible, while also innovating.

  1. Too Little Guidance

On the other side of the coin is the CEO or the startup leaders who are rarely seen. This is likely because they’re busy keeping the business afloat, but when employees feel like leaders aren’t making their presence known it can decrease morale, motivation and productivity.

There needs to be a balance between too much and too little management, which can be difficult for startup leaders to master, particularly since they may be relatively new to the business world as well.

  1. Not Having Formalized Training and Development

A lot of startups will focus their talent efforts on the hiring process. There’s a sense of competition to snap up the best and brightest young developers and tech employees, and there may also be a lot of emphasis on cultural fit, but then talent management strategies seem to stop there. There seems to be the misconception that if you hire talented, well-educated people there’s no need to train them. Training and development are always a necessity, even among the most talented workforce. If you’re not investing in training and development, employees’ engagement and productivity are likely to suffer as a result, and you may see yourself with high turnover rates.

  1. Whim-Based Leadership

So much of what we find appealing and alluring about startups is that sense of passion, disruption and innovation. These are all great things, but unfortunately, they mean leadership that’s based on a whim.

Startup leaders may expect employees to be mind-readers, or the way they lead may change from day-to-day.

There’s a lot of uncertainty in the world of startups, and you have to be flexible and adaptable to achieve success, but that doesn’t mean you can have a refined, concrete talent management strategy in place.

  1. Incentives Based on Fun

This again goes back to what we’re seeing coming from Zenefits. Startups may not have the budget to get the talent they want, so they try to create office perks that feel more like a party than work.

It’s fine to be creative with benefits, but you need to always ensure you’re keeping it professional. Having a fully-stocked bar at work may not be the best idea, nor are frequent staff parties. This can remove any level of professionalism within the company, and it can quickly spiral out of control. Competing with big firms to source talent doesn’t have to mean you create a college frat party atmosphere.

  1. No Employer Brand

When you’re already struggling to establish your overall brand, you may not be giving enough thought to your employer brand. Before you can hire and manage talent effectively, you need to be able to clearly define who you are as an employer, what you want to achieve, and the people you think can get you there. If your employer brand is negative—for example, the perception is that you expect employees to work 14 hours a day, you have to work to change it and shape it the way you want to be seen before you can have the best possible talent management strategy.

What talent management mistakes do you frequently see startups making?

February 28, 2016   Updated :November 16, 2016   startups, zenefits   

One response to “8 of the Most Common Talent Management Mishaps Made by Startups”

  1. […] reading our post on “8 of the biggest talent management mistakes made by startups” to learn more about this topic, and how to avoid a talent […]

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