The Hiring Dilemma
When in doubt, write it out
Happy Thursday, 👋
Your team just signed a large customer, should you hire? You’ve closed a big funding round and need to scale, does that mean adding headcount? Struggling to debug a complex codebase, do you need more people, or a better process? Often, the first response to challenges in a startup is to expand the team. It’s natural to want to grow quickly by adding more people, but hiring isn’t always the best solution. In fact, it can sometimes create bigger challenges down the road.
When a company experiences exponential growth, inefficiencies are bound to emerge. Systems break, processes become outdated, and the existing team struggles to keep up. The logical response might seem to be hiring more people. A bigger team should mean more bandwidth, faster execution, and reduced stress. But the reality is often different, especially in a startup where every hire increases long-term financial commitments and cash burn.
The Problem: Hiring Too Fast
Many issues that seem insurmountable during rapid scaling are often temporary. As teams gain experience, analyze different solutions, and refine their procedures, they often find better ways to manage the workload. What seemed like an overwhelming challenge six months ago may now be a manageable process for the same-sized team. Unfortunately, many startups default to hiring without first exploring other solutions.
Once the business stabilizes, those extra hires may no longer be necessary. The company is then left with employees who are underutilized, leading to reduced morale, increased cash burn, and inefficiencies. For venture-backed startups, excessive hiring can be particularly problematic, as investors pay close attention to capital efficiency. No investor wants to see payroll bloat months after closing a funding round or a team growing faster than revenue.
The Job Description Test: Do You Really Need This Hire?
When a team believes they need to hire, the first step should be writing a job description. Make it as detailed as possible, outlining key responsibilities, required skills, and long-term development potential. When we ask founders to write a job description, we often see two outcomes.
The first is a well-defined description for adding new talent to the team, someone who will elevate the entire organization and provide fresh perspectives. This type of job description typically outlines a clear long-term development plan for the position and explains how this hire will become a key component of the company’s growth.
The alternative scenario is that the job description starts to resemble a project plan or process improvement checklist rather than a viable long-term position. Instead of describing how the new role will strengthen the company, the job description simply lists tasks that need to be handled.
The simple act of writing out the job description can be a useful exercise in determining whether a hire is truly necessary or if the existing team just needs to adjust workflows and improve processes. Many inefficiencies in startups can often be solved by refining operations rather than adding headcount.
A Smarter Approach to Growth Challenges
If the job description starts to read more like a project plan or checklist, consider the following ways to work through challenges before committing to hiring.
Process vs. People – Is the workload issue a symptom of a broken or outdated process? Sometimes inefficiencies arise because the company is still operating as if it’s a five-person team when it has now grown to fifty. Before hiring, assess whether a new process, automation, or restructuring could solve the problem instead.
Temporary vs. Permanent Needs – If the increased workload is tied to a specific project or a new client, consider whether the need is temporary. Would outsourcing or contract support be a better option than a full-time hire? Bringing on external help for a defined scope of work can be more cost-effective and flexible than committing to another permanent employee.
Skill Gap vs. Capacity Gap – Sometimes, the real issue isn’t a lack of support but a lack of expertise. If the company has reached a stage where a specialized skill set is required (e.g., a CFO for financial strategy or a VP of Sales to scale revenue), then hiring makes sense. But hiring should be about adding capabilities, not just additional team members.
Final Thoughts: Hiring with Intent
Closing a funding round or landing a major customer is an exciting milestone, but it’s also a moment that requires discipline. Instead of immediately scaling the team, take a step back. Writing out job descriptions for a potential new position forces the team to ask: is this truly a hiring need, or is there another way to solve the problem? Evaluating the root cause of growth challenges can prevent unnecessary hires and keep your startup lean and agile.
The most successful startups don’t just grow fast, they grow wisely. Sustainable success comes from efficiency, adaptability, and making each hire count. By refining processes, leveraging outsourced support when needed, and only hiring when absolutely necessary, startups can scale with intention and set themselves up for long-term success rather than short-term relief.
Wishing everyone a great weekend,
-Eric.