An effective hiring
process for start-ups
Amsterdam, 01-07-2017
Name: Paul Sintnicolaas
Master program: Entrepreneurship Student number VU: 2516126 Student number UVA: 11356456 Supervisor: Prof. G. T. Vinig
Statement of originality
The document is written by Paul Sintnicolaas who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Abstract
Nowadays hiring is a challenge for start-ups, due to the high start-up costs in the early stage of developing a business. However, hiring good employees is crucial, and a start-up should in the first place invest in its personnel. Within the research area of start-ups and human capital, few researchers have addressed the issue of which criteria are important during the hiring process for a start-up. Therefore, this study assumes that the personality of an employee contributes more to a start-up performance than the skills of an employee (H1). Furthermore, within current research there is no consensus on how to find these candidates to, in the long run, improve the start-up performance. This study expects that referral recruitment is used more than online recruitment to improve the start-up performance (H2). In addition, this study assumes that most of the general information variables would contribute positively to the start-up performance (H3). Based on these aspects, the following research question is formulated: ‘Which hiring and recruitment strategies do start-ups use and which are the most effective?’ This is researched among 66 start-ups in Amsterdam and Utrecht through a mix of questionnaires and interviews among the founders. H1 shows that during the hiring process, the personality of an employee is more important than the skills of an employee for a founder and that this improves the start-up performance. H2 demonstrates that founders found referral recruitment to be more important than online recruitment, but that online recruitment is more effective to improve the start-up performance. Moreover, the results illustrate that the experience of the founder contributes positively to the start-up performance (H3b), whereas other variables do not affect the start-up performance (H3a, H3b, H3d, H3e, H3f).
Table of Contents
1 - Introduction ... 5 2 - Conceptual Framework ... 9 2.1 - Start-ups ... 9 2.2 - Recruitment strategy ... 11 2.3 - Hiring strategy ... 14 2.4 - Reflection ... 15 2.5 - Hypotheses ... 16 3 - Method ... 19 3.1 - Sample design ... 19 3.2 - Research context ... 19 3.3 - Data collection ... 20 3.4 - Measures ... 21 3.5 - Data analysis ... 21 4 - Results ... 23 4.1 - General information ... 23 4.3 - Recruitment strategy ... 28 4.4 - In-depth research ... 295 - Discussion and Conclusion ... 32
5.1 - Discussion ... 32
5.2 - Conclusion ... 35
5.3 - Limitations research and future research ... 36
6 - References ... 37
7 - Appendices ... 44
7.1 - Questionnaire ... 44
7.2 - Descriptive statistics general information founder... 47
1 - Introduction
Nowadays one of the biggest problems for companies is to hire good people (Colombo and Piva, 2008). Every company wants to hire the best employees: the most qualified and well-educated employees that suit its company. Especially start-ups are dealing with this problem, as in the early stages not all money of a start-up can be used as an investment in human capital (Bosma et al., 2004). This lack of money for human capital is due to overcoming its high start-up costs, and trying to reach its breakeven point (BEP) within two years, which is generally the time it will take to reach the BEP (Robinson, 1990). However, Bosma et al. (2004) have shown that human capital is very important for start-ups and enhances the entrepreneurial performance of the company. Survival, profits, and generated employment of start-ups have increased significantly when human capital was growing.
Growing start-ups that scale up quickly, often include many technological aspects, such as technological innovation (Blazenko et al., 2012). Because of this rapid technological change, the skills needed of personnel also increase (Maliranta and Asplund, 2007). Evidence shows that the highest productivity can be achieved when IT technology is adopted and complemented with skilled workers and some modern way of organizing work (Brynjolfsson and Hitt, 2000; Bresnahan et al., 2002). Maliranta and Asplund (2007) state that, to optimize the productivity, profitability and the product innovation, a start-up should in the first place upgrade the skills level of its personnel, and in the second place provide more specific vocational training.
When it comes to the financing of growing start-ups, technological start-ups rarely find debt financing useful to reduce their financial constraints (Colombo and Piva, 2008). Moreover, access to venture capitalists is also difficult (Colombo and Piva, 2008). To raise money in the early stage, it can be crucial for founders of a start-up to have a broad network when they are searching for an investor (Colombo and Piva, 2008). Entrepreneurial companies contribute significantly to our economy, and the importance of human resources in determining those firms’ success or failure is crucial (Katz et al., 2000; Katz and Welbourne, 2002). As reported by Hornsby and Kuratko (1990), recruitment and selection are considered as important HR functions. Therefore, recruitment and selection are the key components of the overall effective management of a company’s human resources in entrepreneurial companies (Cardon, 2003).
The recruitment and selection could be divided into two different processes. First, a founder must determine who wants to work at his/her start-up: the hiring strategy. Second, a founder must determine how he/she wants to find this candidate: the recruitment strategy. The founder of a company aims to hire an employee with a large contribution to the company, which
in the end increases the value of the company. To achieve this, there are different hiring and recruitment strategies to hire employees that can contribute to the company.
When it comes to the hiring strategy of an employee, several aspects are considered important for the company. Bowen et al. (1991) showed a selection method in which employees are hired to fit the characteristics (PC: personality and culture) of an organization, and not just the requirements of a particular job (KSA: knowledge, skills, and abilities). According to Bowen et al. (1991), the first type of hiring (KSA) tends to believe that individual job performance is the key outcome of the hiring process and that job performance is a function of the fit between KSA and task demands. The second type of hiring (PC) focusses more on the organization’s culture. In this type, the personality of an employee should fit with the climate/culture of the company. A good personality shows that an employee is able to make contact easily with the people inside the company and by doing so increases the atmosphere. Apart from this, a committed and self-motivated person can also contribute to the company performance.
Looking at the recruitment strategy, it could be noticed that the way recruitment is employed is currently different than it was in the past. In the mid-1990s, the internet was used as a recruiting tool and became popular due to the benefits it could bring to the recruiters (Boydell, 2002). Some authors implied that Internet had ‘revolutionised the way that people look for work’ (Birchfield, 2002) and ‘brought radical change to corporate recruiting’ (Cappelli, 2001). The increasing usage of internet has changed the way how individuals communicate with each other, and with organizations in a work-related context (Prajapati, 2014). According to Smith and Rupp (2004), research illustrates that employers under pressure embrace this trend to stay up to date in their recruitment practices. To follow the trend, companies must implement an e-recruitment program to find more productive and better-suited candidates and improve hiring decisions at a lower cost and in less time (Smith and Rupp, 2004). However, in a recent paper by Parry and Tyson (2008), there has been little research done whether the use of online recruitment is successful for companies, such as start-ups.
Research problem
Although human capital is very important for a start-up, research on recruitment in entrepreneurial companies is still relatively underdeveloped (Baron, 2003; Katz and Welbourne, 2002). To be more specific, only a few researchers addressed the issue who a founder should hire for his/her start-up (Leung, 2003). Although Bowen et al. (1991) tried to
shift the focus more on the culture fit hiring strategy, they have not considered the outcome of these different kinds of hiring strategies and the influence on start-up performance. In addition, studies on referral recruitment and online recruitment are still lacking. Since referral recruitment leads to more close contacts and online recruitment leads to more cold team members, both types have their own pros and cons (Elfring and Hulsink, 2003). Because of this, it is interesting to research the influence of these strategies on start-up performance.
Addressing the research gap, this study proposes a model that examines how different hiring and recruitment strategies from start-ups are used and which are most effective in the long run (figure 1.1). This study looks at which parameters a founder should use to hire a candidate: the first parameter describes a candidate who fits well in the team, in which personality is used as a proxy. The second parameter indicates a skilled candidate, in which education is used as a proxy. Furthermore, there will be inquired after different recruitment strategies such as referral recruitment, online recruitment, and a combination of these types among the founders of start-ups. These recruitment strategies focus on how a founder should hire and find a well-suited employee.
Figure 1.1: Conceptual model hiring and recruitment strategy for start-ups.
The outcomes of this research can be helpful to provide a framework for all start-ups in the Netherlands. This framework serves as a tool on the one hand to optimize the hiring strategy
Which hiring and recruitment strategies do start-ups use and which are the most effective?
Hiring strategy: who should a founder hire?
Recruitment strategy: how should a founder hire?
Focus on personality or skills candidate?
Focus on online, referral or both types of recruitment?
and to optimize the recruitment strategy on the other hand. Furthermore, this model provides insights into which characteristics of founders and start-ups are beneficial to hire productive people.
2 - Conceptual Framework
2.1 - Start-upsDefining start-ups and ecosystems
Nowadays start-ups are becoming more important for the national economy (Sofouli et al., 2007). A start-up is a company that is in the first stage of its operations, which is mostly initially financially contributed by its founders unless they are searching for outside investments. The founders try to develop a product or a service for which they believe there is a demand. However, due to limited revenues or high costs, most of these start-ups are not sustainable in the long term without additional funding from venture capitalists (Investopedia, 2017).
Blank (2013) defines a start-up as follows: ‘a start-up is a temporary organization, formed to search for a repeatable and scalable business model’. Van Gelderen et al. (2005) identified the significant risk of a start-up: ‘the several phases that a new endeavour goes through bear several risk factors that lead to high overall risk and eventually to a high failure rate, especially in the early stages’. Prahalad (2012) focusses on the creation of wealth in his definition of the entrepreneurial ecosystem: ‘the entrepreneurial ecosystem enables individuals, enterprises, and the society to combine effectively for the cause of generating economic wealth and prosperity’. As reported by Voelker (2012), an entrepreneurial ecosystem can easily be compared with a landscape: ‘as we can identify deserts, farmlands, and savanna’s, we can likely identify various entrepreneurial systems’. The difference between a start-up ecosystem and an entrepreneurial ecosystem is frugal: a start-up ecosystem has the same functions as an entrepreneurial ecosystem but focuses on high-risk start-ups that are trying to launch their initial idea to create wealth and to be scalable (Voelker, 2012).
Rapid growth start-ups
A number of firms that are of particular interest to practitioners and researchers are rapid-growth firms. The rapid-rapid-growth determines the market acceptance and whether a firm succeeds or not. A lot of rapid-growth start-ups, such as eBay, Oracle, Cisco Systems and Apple Computer, have provided new industries and have stimulated the development of innovative products and services (Barringer et al., 2005). In the long run, one can draw a simple conclusion: a fast-growing start-up grows or dies. If the start-up grows faster than the market, the market share increases. However, if the market grows faster than the start-up, the market share
decreases. As a result, the start-up is unable to spend money on advertising, production and product development (Rich, 1999). However, there are also smart companies who find ways to grow. For example, these companies only use slow-growth, low-profitability products and move to markets that are growing quickly. The fact that capacity of innovative and high-growth firms contribute to an improved economy is established, which could be seen in increasing numbers of the net rate of creation of jobs (Bonnet et al., 2011). To illustrate in the USA, young firms account for approximately two out of three jobs that are created. This sums up to almost four jobs per firm per year (Bonnet et al., 2011).
To explain the phenomenon of high-growing start-ups, one must look at the degree of innovativeness of products and services, which in turn determines the capacity of companies to grow quickly (Bartelsman et al., 2003). A second reason that explains this high-growing phenomenon is the size of the market and the entrepreneurial infrastructure. Therefore, the support for entrepreneurship from the government and the educational system is crucial (Bonnet et al., 2011). However, not all start-ups are fast-growing and successful. Rapid growth is difficult to achieve and to maintain, and the intentions, capabilities and perceived options could limit the growth of an entrepreneur (Bonnet and Cussy, 2010). It must be acknowledged that start-ups often fail: from every seven firms, only one achieves a constant, profitable cash flow and thus, growth (Zook and Allen, 1999).
Characteristics of start-ups
Two important features of a start-up which could contribute to the start-up performance are a broad network and a large team size (Johannisson, 1990; Barkman, 1994). Research stated that a broad network could be a critical component for a founder. Since resources are important for a start-up to overcome obstacles, a broad network can help a founder to get access to various resources (Johannisson, 1990). Second, if a start-up consists of a larger team, more various employees and thus, more talent, resources, professional contacts, will be attained (Barkman, 1994). As a result, this will contribute to the performance of a start-up.
2.2 - Recruitment strategy
Importance team members
Recruitment is very important for start-ups, as they are dependent on the knowledge and skills of their human capital to succeed and survive. From an internal, organizational standpoint, start-ups are basic organizations and work very informal when choosing their team members (Sardiello, 2011). Research states that most of the times founders and managers are relying on their social network to hire new employees (Ram, 1999). In contrast, the supply of the social network of the founders and managers will stop at a certain time. That is why a company cannot rely solely on its own social network. To solve this problem, a start-up should look further for hiring people through, for instance, recruitment agencies (Williamson, 2000). Recruitment agencies provide a company selection procedures to hire competent people. Besides, companies need to make well-considered decisions and invest time to find the right employee (Newell, 2005). Otherwise, costs could go up to 30% when hiring the ‘wrong’ individual (Hacker, 1997). These costs consist of training costs, advertisement costs, too little productivity, loss of clients, and recruitment costs (Smith and Graves, 2002). However, startups have a less stable cashflow than more mature companies, which makes it difficult for start-ups to pay recruitment companies (Williamson et al., 2002; Smith and Graves, 2002).
Especially for rapid-growth firms it is of great importance to staff their organizations properly during the hiring process (Barringer et al., 2005). As reviewed by a survey of Pricewaterhouse Cooper’s Trendsetter Barometer (2000), CEOs are dealing in the first place with proper staffing. This shows the importance for a company to attract skilled and capable employees. Research emphasizes that skilled and capable employees increase the chance that a company will be able to effectively implement and maintain a growth-oriented strategy (Rich, 1999). Rich (1999) stated that a company that believes they have significantly stronger executive talent than their competitors outperformed the average companies by nearly 70% in terms of return to shareholders.
To maintain these skilled and capable employees, it is essential for a company to give away performance-based incentives to its employees, such as profit sharing and bonus plans. Research shows that these incentives help firms to attract (Zenger, 1992) and retain (Rich, 1999) employees, and increase their productivity (Weitzman and Kruse, 1990). Furthermore, these incentives help the company to share business risks and conserve cash (Barringer et al., 2005). Although a company has the choice to pay an employee in cash or in stock options, the stock option has become increasingly relevant for rapid-growth firms (Barringer et al., 2005). In this
way, the employee shows more commitment, because the employee is also dependent on the performance of the company.
Development recruitment
In recent years, the use of online recruitment has grown rapidly and the Internet is now a widely adopted source for recruiters and job seekers across the world. According to Cober and Brown (2006), 50% of new hires in the US were established through making use of online recruitment. Online recruitment has become popular for both candidates and companies. Another example states that 64% of all UK organisations used e-recruitment, implying that the use of online recruitment is still increasing (CIPD, 2006). In the US, more online recruitment methods have begun to replace more traditional recruitment methods. Feldman and Klass (2002) have described how the Internet is ‘clearly beginning to cut into other types of employment advertising revenues’, such as newspaper advertising and head hunters. Quick (1998) and Boehle (2000) demonstrated that expenditure on these ‘employment advertising revenues’ have dropped 20% in the US, as spending on internet recruitment has increased. Despite the reported growth of the use of Internet recruitment, academic research regarding this topic is relatively sparse.
Weak and strong ties
During the quest to find a candidate, a founder has roughly three options how to recruit personnel. The first option is a personal approach: a founder opens his/her network to meet possible candidates the founder probably already knows (strong tie). This strong tie primarily develops out of third-party referral networks and previous personal relations (Uzzi, 1997). The second option is to search for a candidate online (e.g. on social media), which will lead to a possible candidate the founder does not know well (weak tie). Moreover, a founder could choose to mix these two types of candidates. Both strategies have their own pros and cons, which are explained below.
Strong ties are associated with the exchange of fine-grained information and tacit knowledge, trust-based governance and resource co-optation (Uzzi, 1997). Furthermore, strong ties tend to bind similar people in longer-term relationships (Elfring and Hulsink, 2003). Besides, strong ties enable a start-up to capitalize quickly on market opportunities, especially
if the situation is uncertain and/or insecure. Moreover, strong ties are important, because of keeping promises, trusted feedback, exchange of tacit knowledge on the nature of the opportunity, and in the deployment of resources. However, these strong ties also have shortcomings: there is a risk of over-embeddedness, and a danger of not being open to the outside world for new information (Elfring and Hulsink, 2003).
Weak ties provide access to a broad network and thus, to more information. Because the contacts are very loose, diversity will be increased which causes access to new sources and information and offer new opportunities to meet new people and acquire new and/or improved ideas (Elfring and Hulsink, 2003). Weak ties will be found especially through the use of social media for recruitment (Prajapati, 2014). A survey conducted by US-based firm Jobvite indicates that social media has become an important tool for recruiting top talent: more than 600 HR recruiting professionals were asked how they use social networking in their recruiting process. At least 73.3% said they currently use social media to recruit candidates (LinkedIn 78%, Facebook 55%, twitter 45% and blogs 19%). Currently, this increasing recruitment communication is being considered as a basic hygiene factor at work (Prajapati, 2014).
To put the strong and weak ties into context, Elfring and Hulsink (2003) investigated these concepts in opportunities, resources, and legitimacy. The results showed that weak ties and a mix between strong and weak ties were most likely to discover opportunities. In terms of securing resources, strong ties were most likely to secure them. Lastly, strong ties and a mix between strong and weak ties seemed to play the biggest role in gaining legitimacy. Hoang and Antoncic (2003) found that strong ties were more critical in explaining firm success as measured by firm survival than weak ties. This could be explained by the fact that strong ties provide access to more resources than weak ties. Weak ties turned to be a poor predictor of firm success (Hoang and Antoncic, 2003). Uzzi (1997) stated that the strong ties are nestled in embedded relationships, in which actors follow heuristic and qualitative decision rules, rather than intensely calculative ones. This embeddedness promotes economies of time and allocative efficiency. Therefore, organization performance increases with the use of embedded ties to link to network partners. However, a growth of valuable new partnerships could decrease the embeddedness in the long run (Hagedoorn and Frankort, 2008). In short, a mix of weak and strong ties in the core team of a start-up seems to be the best start of an ideal entrepreneurial network (Elfring and Hulsink, 2003; Uzzi, 1997).
2.3 - Hiring strategy
Founder’s characteristics
The founder’s characteristics are very important during the hiring process. First, a founder can affect and determine the culture and behaviour of its firm (Mullins, 1996). Second, if investors play an important role in a company, the first thing they do is look at the attributes of its founders. In this way, investors can decide whether to invest in the firm or not (Barringer et al., 2005). Third, to overcome challenges during the process of launching a company, a founder must manage all the different variables (Barringer et al., 2005). These important decisions emphasize the importance of a founder when setting up a business.
Previous research demonstrated that educational level and experience of a founder have been found to be critical in successfully launching a new firm (Barringer et al., 2005). If the education that is given to the founder is specific enough for the particular area of expertise, the education can be an advantage if the founder is going to set up a firm (Sapienza and Grimm, 1997). Experience in the same industry as the current venture of the founder will lead to a broader network and a better understanding of the current industry (MacMilland and Day, 1987). Next to this industry experience, entrepreneurial experience also affects entrepreneurial performance significant (Singer, 1995). The process of launching a start-up is often complex and the prior start-up experience can be decisive to avoid mistakes.
Two important sources that contribute to the growth of a company are a large commitment and a growth-oriented vision of the founder (Barringer et al., 2005). A large commitment can be described as the commitment to the execution of an ongoing growth strategy. In addition, a growth-oriented vision helps the firm by ensuring that decisions are made with growth in mind (Kim and Mauborgne, 1997). Another factor from which companies could benefit is conscientious planning, which increases the chance of achieving the growth objectives (Barringer et al., 2005). Also, the participation in inter-organizational relationships is meaningful for a company, because they could give fast access to information and the opportunity to broaden their network (Bluedorn et al., 1994).
Hiring process
In terms of hiring, there are two different views: the soft and the hard view (Guest, 1999). The hard view, which is criticised a lot, means that workers are seen mainly as resources or objects.
This view reflects the capitalist tradition in which the worker is seen as a commodity. By using this view in a company, the interests of employees and their well-being are decreasing. The personality of an employee does not play a large role in this hard view. However, the soft view of a company gives an employee the opportunity to show commitments towards the company. The employees are seen as means primarily instead of objects. Employees have the chance to grow and show commitment by adding value to the company in his or her own manner (Guest, 1999). In order to grow as an employee, it is of great importance an employee fits well within the community of its colleagues and to collaborate with them if necessary. A similar approach by Bowen et al. (1991) distinguished two strategies in order to hire an employee. Bowen et al. (1991) used the KSA type of hiring and the PC type of hiring. The first type is more focused on skills and abilities, whereas the second type of hiring is more focused on personality.
Recently, Chand (2016) evaluated five steps which are involved in a usual recruitment process: recruitment planning, strategy development, searching, screening, and an evaluation. The screening included the job specification. The applications, such as qualification, knowledge, skills, abilities, and experience were screened and mentioned in the job specification. Those who did not qualify were eliminated from the selection process immediately. Afterward, there would be an evaluation, in which the personal characteristics were assessed. This illustrates that the current recruitment focusses primarily on the skills and abilities and has a second priority on the personal characteristics of the candidate (Chand, 2016).
2.4 - Reflection
Looking at previous research, it can be concluded that education, motivation, experience, a broad network, commitment and involvement in inter-organizational relationships are part of the typical characteristics of a successful founder and thus, a successful business (Barringer et al., 2005). Usual recruitment practices, as Chand (2016) stated, focus more on skills than personalities of candidates. However, there is no consensus among researchers regarding the most effective hiring strategy. That is why the distinction is made between ‘an employee who fits well in the team’ and ‘an employee who is skilled’.
There is also no consensus among researchers regarding the most effective recruitment strategy. According to Smith and Rupp (2004), companies must implement an e-recruitment program to find the best candidates. Other research stated that online recruitment is ‘new and upcoming’ (Bartram, 2000), whereas Parry and Tyson (2008) mentioned that there has been little research whether the use of online recruitment is successful for particular companies, such as start-ups. However, alongside weak ties, strong ties seem necessary to form a diverse,
balanced team (Elfring and Hulsink, 2003; Uzzi, 1997). This research is investigating the usage and influence of referral and online recruitment on the final performance of a start-up.
Besides, this study looks at which characteristics of the founder and which features of a start-up contribute positively to the start-up performance. Therefore, this research looked at the following aspects: age of the founder, educational level of the founder, recruitment experience of the founder, the start-up age, the start-up team size and the start-up sector. The influence of these factors on the hiring strategy, the recruitment strategy, and the performance is discussed in this paper.
2.5 - Hypotheses
The main research question is defined as follows: Which hiring and recruitment strategies do start-ups use and which are the most effective? The sub-questions and hypotheses below are necessary to answer finally the main research question. The hypotheses are drawn upon the information described in chapter 2.
Sub-question 1a: Does a founder hire a candidate who fits well in the start-up?
H1a: Founders hire candidates who fit best in the start-up
Sub-question 1b: Does a founder hire a candidate who is skilled?
H1b: Founders do not hire the best skilled candidates
Sub-question 1c: Does the fitting variable of the candidate affect the satisfaction of a founder?
H1c: The fitting variable correlates positively with the satisfaction of the founder
Sub-question 1d: Does the skill variable of the candidate affect the satisfaction of a founder?
H1d: The skill variable does not correlate with the satisfaction of the founder
Sub-question 2a: Does a founder use referral recruitment to hire a candidate?
H2a: A founder uses referral recruitment to hire a candidate
Sub-question 2b: Does a founder use online recruitment to hire a candidate?
H2b: A founder uses online recruitment less to hire a candidate
Sub-question 2c: Does a founder use both types of recruitment to hire a candidate?
Sub-question 2d: Does the use of referral recruitment affect the satisfaction of the founder?
H2d: Referral recruitment correlates positively with the satisfaction of the founder
Sub-question 2e: Does the use of online recruitment affect the satisfaction of the founder?
H2e: Online recruitment does not correlate with the satisfaction of the founder
Sub-question 2f: Does the use of both referral recruitment and online recruitment affect the satisfaction of the founder?
H2f: Using both types of recruitment do not correlate with the satisfaction of the founder
Sub-question 3a: Does the age of the founder affect the hiring strategy, the recruitment strategy or the satisfaction of a founder about his/her employees?
H3a: The age of the founder correlates positively with a successful hiring strategy, a successful recruitment strategy, or a higher satisfaction of the founder.
Sub-question 3b: Does the experience of the founder affect the hiring strategy, the recruitment strategy or the satisfaction of a founder about his/her employees?
H3b: The experience of the founder correlates positively with a successful hiring strategy, a successful recruitment strategy, or a higher satisfaction of the founder.
Sub-question 3c: Does the education of the founder affect the hiring strategy, the recruitment strategy or the satisfaction of a founder about his/her employees?
H3c: The education of the founder correlates positively with a successful hiring strategy, a successful recruitment strategy, or a higher satisfaction of the founder.
Sub-question 3d: Does the age of the start-up affect the hiring strategy, the recruitment strategy or the satisfaction of a founder about his/her employees? H3d: The age of the start-up correlates positively with a successful hiring strategy, a successful recruitment strategy, or a higher satisfaction of the founder.
Sub-question 3e: Does the team size of the start-up affect the hiring strategy, the recruitment strategy or the satisfaction of a founder about his/her employees?
H3e: The team size of the start-up correlates positively with a successful hiring strategy, a successful recruitment strategy, or a higher satisfaction of the founder.
Sub-question 3f: Does the sector of the start-up affect the hiring strategy, the recruitment strategy or the satisfaction of a founder about his/her employees?
H3f: The sector of the start-up does not correlate with a successful hiring strategy, a successful recruitment strategy, or a higher satisfaction of the founder.
3 - Method
This section discusses the methodology of the study. The following contents are elaborated upon: sample design, research context, data collection, measures, and data analysis.
3.1 - Sample design
This study makes use of a mixed design: a combination between a qualitative and a quantitative design. Within the quantitative design, correlational design fits best within the research. This is because this study examined whether a relationship or association exists between two or more variables. The qualitative design includes in-depth information that is acquired during face to face sessions and is elaborated in the discussion.
The sample was derived from responses (n = 66) to a questionnaire sent to founders of start-ups. As reported by SBA (1999), two out of the three new jobs were created by start-ups and small businesses. Since this study focusses on the recruitment area, start-ups seem like an ideal target group. This research focused especially on the most innovative start-ups because these are often growing quickly. The examined start-ups are located in Amsterdam and Utrecht, the Netherlands.
Usually a start-up consists of a core team with a founder who is from the beginning the leader. The rest of the team are called as start-up developers (Boeker and Wiltbank, 2005). Furthermore, a Chief Technical Officer (CTO), a Chief Financial Officer (CFO), a sales manager, and a marketing manager complement the team. In this study, only founders were questioned, because they have experienced the start-up from the beginning. A criterion for questioned founders is that they own a start-up in the early stage, which means that the start-up is established five years ago or less. Moreover, a minimum of one employee should work at the start-up, excluding the founder.
3.2 - Research context
The goal of this study was to explore the hiring and recruitment strategy in start-ups, and to what extent the founder was satisfied with his/her current strategies. This was measured through a questionnaire which roughly consists of three parts.
The first part of the questionnaire was called ‘general information’ and included the following subjects: a question about the age of the founder, the experience in recruitment of the founder, the highest education of the founder, the age of the start-up in years, the team size of the start-up in the number of people, and the sector of the start-up.
Subsequently, these questions were followed by part two: two questions regarding the hiring strategy and three questions about the recruitment strategy. First, the hiring strategy was investigated in order to find out which parameters a founder should use to select a candidate. To measure the hiring strategy, the founder was asked whether he/she thinks it is important to focus on how good a candidate should fit in the team and how skilled a candidate should be for the job. A skilled person comprises of different aspects, such as a high education, experience, skills, and abilities. Second, the recruitment strategy included questions about the importance and usage of referral recruitment, online recruitment, and a combination of both types of recruitment.
The last part measured the satisfaction of the founder about his/her employee(s). The founder was asked to which extent he/she was satisfied with the productivity and the performance of his/her employees. A high satisfaction of the founder about his/her employees indicates that an employee is doing well and is adding value to the start-up and thus, start-up performance increases.
3.3 - Data collection
The founders were asked to participate in the research for the University of Amsterdam / Vrije Universiteit. The founders were told that their participation would be highly appreciated. The anonymity was at all times guaranteed for the founders. It should be noted that the questionnaires were taken in English. The English version of the questionnaire can be found in the Appendix.
With the help of network, founders of start-ups were approached. Besides, by joining events and meet-ups, more founders could be attained, who could help by filling in the questionnaire. The founders were not informed about the goal of this study, as this could lead to socially desirable answers (Pruyn and Wilke, 2001). In order to increase the usability, the questionnaire is fully structured and consist of closed questions.
The questionnaires were sent by e-mail with an attached document and included a link to Qualtrics. The founders had a choice to send the document back with marked answers in the document or to fill in the questionnaire in Qualtrics. If possible, the questionnaire was taken face to face in order to acquire more in-depth information. This in-depth information was elaborated upon in the results section shortly and fully in the appendix.
3.4 - Measures
The assumption was made that all questions were easy to understand for the founders. The answers were given on a Likert Scale rate (1-5). This scale began with strongly disagree (1) and ended with strongly agree (5). After the data collection, each question would represent an indication of which factors were chosen more often by founders during the hiring and recruitment process.
At the end of the measurement, a conceptual model is outlined. This model reflects the hiring and recruitment process of founders’ start-ups. For each strategy, the dimensions and possible significant differences are shown. This study describes the founder of the start-up, and thus an individual person, as the unit of analysis. The results section provides multiple correlation tables with the mean, the standard deviation, and significances for and between original values of the variables.
3.5 - Data analysis
To test the hiring strategies, recruitment strategies and the outcomes on the satisfaction of the founders, non-parametric tests were conducted. Each question represented a score for only one subject, so the Cronbach’s alpha was not necessary to apply. The effect size is calculated as follows: the z-score is divided by the root of the number of participants; in this case 66. Tables which include overflowing descriptive statistics and other data are included in the appendix.
First, the correlation between all general information variables, the independent factors, and the three dependent factors (hiring strategy, recruitment strategy, satisfaction) was explored. Therefore, the Kruskal-Wallis is used; a one-way ANOVA on ranks test on five independent variables. For the sixth independent variable, the ‘experience of the founder’, the Mann-Whitney U test was used, because there were not more than two groups (experienced or not experienced).
Second, this study looked at the statistics of the hiring and recruitment strategies and their effect on the satisfaction of the founders. The use of the hiring and the recruitment strategy was tested through a Wilcoxon Signed Rank analysis. This analysis was performed to measure the use of a founders’ hiring strategy (fitting, skilled) and recruitment strategy (referral, online, and mixed). The Wilcoxon Signed Rank test for the first analysis seemed appropriate because this model showed significances between all factors and showed the Z-score, which could be used to calculate the effect size. For the second analysis, Kendall’s tau analysis was performed to test the effect of these five variables on the satisfaction of the founder. This analysis was used because the ordinal association was asked between two measured quantities; in this case,
each variable and the satisfaction of the founder. The five variables were the independent factors and the satisfaction of the founder was the dependent factor.
4 - Results
4.1 - General informationThe general information consists of the following six independent variables: experience in recruitment, the age of the founder, the highest education of the founder, the age of the start-up, the team size of the start-start-up, and the sector of the start-up. To give a clear overview of the independent variables, the descriptive statistics are shown in Table 4.1. Afterward, this subchapter elaborates how each of the six variables affected the hiring strategy, the recruitment strategy and the satisfaction of the founder (H3a – H3f).
Table 4.1: Descriptive statistics independent variables.
Situation N Percent
Experience founder 54 Yes (82%)
12 No (18%) Age founder 26 19-25 (39%) 19 16-35 (29%) 9 36-45 (14%) 4 46-55 (6%) 8 56-65 (12%)
Education founder 4 HGSE (HAVO) (6%)
6 PUE (VWO) (9%) 4 IVE (MBO) (6%) 13 HVE (HBO) (20%) 15 WO-Bachelor (23%) 24 WO-Master (36%) Age start-up 7 0-1 (10%) 14 1-2 (21%) 12 2-3 (19%) 13 3-4 (20%) 20 4-5 (30%)
Team size start-up 33 0-5 (50%) 13 6-10 (20%) 6 11-15 (9%) 4 16-20 (6%) 2 21-25 (3%) 8 >25 (12%)
Sector start-up 8 Software (12%)
9 Tech (14%) 5 E-commerce (8%) 16 Health (24%) 5 Finance (8%) 2 Recruitment (3%) 4 Management (6%) 17 Other (25%) Experience founder
This study shows a significant correlation between the experience of the founder and the use of online recruitment by a founder (p < 0.05, r = 0.25). Furthermore, a significant correlation between the experience of the founder and the satisfaction of founder about the productivity and the performance of his/her employees is shown (p < 0.05, r = 0.25).
To give more insights in these differences, the mean answer is given. The experienced group used online recruitment more than the inexperienced group ((M = 3.00, SD = 0.16) versus (M = 2.25, SD = 0.30)). This experienced group was also more satisfied with their employees than the inexperienced group ((M = 4.00, SD = 0.088) versus (M = 3.67, SD = 0.14)). As H3b mentioned, the experience contributes positively to the choices a founder makes. By making use of online recruitment, the satisfaction of a founder is also higher.
Age founder
Age only influences whether one should select a skilled candidate or not (H(4) = 10.14, p < 0.05). Though the results show no significant difference between groups (p > 0.01), the
importance of a skilled employee seems to increase for a founder at a higher age between 36 and 55 (figure 4.1.). According to H3a, a higher age would lead to more mature, better choices. These results are in contrast with H3a, as a skilled candidate does not correlate with the satisfaction of a founder.
Figure 4.1.: Correlation between the age of a founder and selecting a skilled candidate.
Education founder
The education only has a significant effect on start-ups who used both referral and online recruitment in order to hire employees (H(5) = 13.341, p < 0.05). However, no significant correlation between the groups has been found (p > 0.01). The education of a founder does not have any influence on the hiring strategy and the final satisfaction of the founder. However, this is not in accordance with H3c.
Age start-up
The age of the start-up has no significant effect on the hiring strategy, the recruitment strategy, and the satisfaction of the founder (p > 0.05). However, this is not in agreement with H3d,
which mentioned that the age of a start-up would correlate positively with one of the successful strategies.
Team size start-up
The team size of a start-up has no significant effect on the hiring strategy, the recruitment strategy, and the satisfaction of the founder (p > 0.05). However, this is not in line with H3e, which assumed that the team size of a start-up would correlate positively with at least one of the successful strategies.
Sector start-up
The sector of a start-up only has a significant effect on the referral recruitment strategy (H(7) = 7.732, p < 0.05). However, this study shows no significant difference between the sectors, which is in line with H3f (p > 0.01). This could be seen in figure 4.2.
4.2 - Hiring strategy
Usage of hiring strategy
The hiring strategy is divided into the fitting factor and the skilled factor. The fitting factor is tested in H1a and the skilled factor in H1b. The results show that there is a clear difference between the usage of the fitting and the skilled factor. The results indicate that during the hiring process, start-ups focus more on the fitting (M = 4.59; SD = 0.66) than the skilled (M = 2.95, SD = 0.97) variable. This effect is significant with a high effect size (p < 0.001; r = 0.82). These results are in line with H1a and H1b.
Table 4.2.1: Usage hiring strategy.
Situation N Mean SD Z Sig
Fitting 66 4.59 0.66
Skilled 66 2.95 0.97
Fitting - Skilled 6.629 0.000
Influence hiring strategy on satisfaction
This research tries to investigate whether the fitting variable (H1c) and the skilled factor (H1d) affect the satisfaction of the founder. The results show that the fitting factor correlates positively with the satisfaction of the entrepreneur (p < 0.05) with a medium effect size (r = 0.31). However, the ‘skill’ criterion of the hiring strategy does not correlate with the satisfaction of the founder about his/her employees (p > 0.05). This corresponds with H1c and H1d.
Table 4.2.2: Influence hiring strategy on satisfaction.
Situation N Correlation Sig
Fitting - Satisfaction 66 0.31 0.007
4.3 - Recruitment strategy
Usage recruitment strategy
The recruitment strategy is divided into the referral recruitment, the online recruitment, and in a combination of both recruitment strategies. The referral recruitment is tested in H2a, the online recruitment in H2b, and a combination of them in H2c. The descriptive statistics show the preferences of the usage of the recruitment strategy. As could be seen in the table 4.3.1, referral recruitment has been used the most (M = 3.42, SD = 1.10), a combination between referral and online recruitment less (M = 3.30; SD = 1.04), and online recruitment has been used least (M = 2.86; SD = 1.19). The results confirm the hypotheses H2a, H2b, and H2c as earlier assumed.
Significances are shown between the strategies of recruitment. The online recruitment is used significantly less than the referral recruitment (p = 0.01, r = 0.32) and the online recruitment is used less than the combination of the recruitment strategies (p = 0,001, r = 0.41). This study shows no significant difference between the use of referral recruitment and the use of a combination of the recruitment (p > 0.05).
Table 4.3.1: Usage recruitment strategy.
Situation N Mean SD Z Sig
Referral 66 3.42 1.10 Online 66 2.86 1.19 Combination 66 3.30 1.04 Referral – Combination 66 0.481 0.631 Online – Combination 66 3.348 0.001 Referral - Online 66 2.568 0.010
Influence recruitment strategy on satisfaction
This research wants to investigate whether the referral recruitment (H2d), the online recruitment (H2e), and the both types of recruitment (H2f) affect the satisfaction of the founder, and thus the start-up performance. The results show that making use of referral recruitment and both types of recruitment do not correlate with the satisfaction of the founder (p > 0.05). However, there seems to be a positive correlation between the use of online recruitment and the satisfaction of the founder (p < 0.05, r = 0.27). This is in contrast with H2d and H2e, which mentioned that the use of referral recruitment does, and the use of online recruitment does not, affect the satisfaction of the founder.
Table 4.3.2: Influence recruitment strategy on satisfaction.
Situation N Correlation Sig
Referral - Satisfaction 66 0.045 0.678
Online - Satisfaction 66 0.270 0.012
Combination – Satisfaction 66 0.114 0.299
4.4 - In-depth research
During five face-to-face interviews, more information about the strategies of a founder is acquired. These five different interviews all provide extra in-depth information, adding to the questionnaires. None of the founders applies the exact same strategy, but most of them are, however, satisfied with their own strategy and their successful outcomes.
Case 1
A young founder (25) told about his technological software company. He experienced his business as a life with a lot of ups and downs. During his dynamic life, he had met a lot of different people in his discipline. Due to his broad network, he could easily find and hire people. For that purpose, he never used other resources to hire people. As a result, he was very content about his employees. They worked hard and because of the close connections between the founder and his employees, they had an employer-employee relationship based on trust.
Case 2
Another woman (49) was a founder of a real estate company. She began four years ago and already experienced a reasonable number of setbacks. Most of the employees complained and left the job. She did not have a good connection with her employees, probably because the employees all applied online and could earn a relatively high wage. This has led to a low intrinsic motivation and high and unrealistic requirements of the employees. Although the employees did their work very well, the communication between the founder and the employees was bad. This seemed to be fateful.
Case 3
During a meet-up, a founder (28) was interviewed who owned an ICT-company. He made use of both referral and online recruitment, which resulted in a dynamic, efficient group. Next to this, a lot of meetings and rounds of table tennis were organized, and the founder stayed connected every hour of the day with his employees. As a result: a satisfied founder and satisfied employees. He told about his strategy: first, he invited a possible candidate to see if the personality matched with the company and afterward, he tested this candidate on his/her skills. This worked out very well.
Case 4
Another serial entrepreneur and founder (38) of a company was specialized in data analysis. Most of his employees were data analysists and developers, the other employees were managers, marketing specialists, or SEO specialists. This founder, just as in case 1, mentioned that he had no issues to find and hire suited candidates. He noticed that through his own employees his team size expanded a lot, which resulted in a larger number of available candidates. Because of the personal approach method, the interviews resulted often in a success. Besides, according to this founder, this personal approach has increased the working atmosphere.
Case 5
A boss of a recruitment agency (41) told about his start-up, which he set up four years ago in 2013. His company has grown a lot since the beginning and he dealt with a lot of different employees. He started with searching for candidates in his own network, which resulted in some conflicts and fired employees. Then he decided to search for candidates by making use of online
tools, such as LinkedIn and Twitter, which resulted in a fast growth. Because of the growing market, a lot of young students wanted to participate in the company to get a share in the start-up and/or improve their sales skills. Although the connection between the founder and the employees was detached, they shared the vision of the company together. At this point, the number of employees increased till today, whereby he reached a number of 30 employees. The founder was satisfied and could not wait to hire more people and let his company grow further.
5 - Discussion and Conclusion
5.1 - DiscussionGeneral information
It is the main purpose of this study to draw attention to the hiring strategy, the recruitment strategy, and the start-up performance. In addition, this study investigates which ‘general information’ variables influence the hiring strategy, recruitment strategy, or start-up performance. The study assumes that all these variables positively affect at least one of the three components, except for the sector of the start-up (H3a – H3f). As noted in the results section, the most successful hiring strategy seems to be the focus on personality and the most effective way to search for candidates seems to be making use of online resources.
This study assumes that the experience of the founder, on average, increases with the age of the founder. In addition, the longer a start-up exist, the more a founder has experienced. This study assumes that experience should, on average, lead to wiser and smarter decisions in the long run (H3a, H3b, H3d). Besides, Barringer et al. (2005) state that experience is critical in successfully launching a new firm. Moreover, industrial experience should look after a better understanding of the current industry (MacMilland and Day, 1987) and entrepreneurial experience should affect entrepreneurial experience significant (Singer, 1995).
This study demonstrates that previous experience in recruitment of the founder positively affects the use of online recruitment and the satisfaction of the founders. This outcome confirms H3b and is in good agreement with other studies which have shown a positive correlation between entrepreneurial experience and company performance (Barringer et al., 2005; MacMilland and Day, 1987; Singer, 1995). Therefore, the founder is able to choose the most effective recruitment strategy (online recruitment), which leads to more satisfaction about his/her employees. However, the age of the founder and the age of the start-up do not seem to correlate with successful strategies, which is in contrast with H3a and H3d. An explanation for the age of the founder could be that the age does not correlate with experience because a founder could also start his first business in a later phase during his life. The most likely explanation of the negative result about the age of the start-up could be explained as follows: if a start-up exists for a longer time, the more negative experiences the founder could have had with his employees, which could have a negative effect on the performance of the start-up.
The education of the founder has only a positive correlation with the usage of both types of recruitment but has no correlation with one the most successful strategies which is in contrast
with H3c. Since education seems critical in successfully launching a firm (Barringer et al., 2005), this outcome is incongruous with the literature. However, Sapienza and Grimm (1997) state that education is only an advantage if the education is specific enough for the particular area of expertise. It could be possible that in this research participants have not followed specific education, which has not contributed to their particular business.
A broad network of a founder seems important for a start-up because this network is important for a start-up to overcome obstacles, and to get access to these resources (Johannisson, 1990). According to Barkman (1994), the team size correlates positively with the variety of employees and thus an increasing number of professional contacts, resources, and talent. However, the results show that this is not the case for the team size (H3e). An explanation could be that the investigated start-ups do not have a variety of talents, but that most talent is gathered by making use of strong ties. This could have limited the growth, because of over-embeddedness and not being open to the outside world (Elfring and Hulsink, 2003).
Very few publications are available in the literature that discuss the sector of the start-up regarding the recruitment area. Our results indicate that the sector of a start-start-up significantly correlates with the referral recruitment, which is in line with H3f. Although this study does not notice a significant difference between the groups, a small dissimilarity between the groups could be seen. More technological start-ups (tech, e-commerce, and finance sector) seemed to use more referral recruitment than the non-technological start-ups (health, recruitment, management). It is commonly recommended not to outsource technology for start-ups, but having technology close in your start-up lead on average to a better performance (Lel and Hitt, 1995). Therefore, it seems more usual for start-ups to search for technological experts in their own network.
Hiring strategy
Before testing, it was expected that a founder during the hiring process would primarily focus on candidates who fit well in the team (H1a). A skilled candidate would be less important for the founder (H1b). This study assumed that start-ups made the right choice: the employees who matched to the team properly should contribute more to the start-up than the employees who were skilled (H1c and H1d). The results demonstrated that all these hypotheses were correct. The literature emphasizes that it is of great importance an employee fits well within the community of their colleagues and to collaborate with them (Guest, 1999). The founders in case 1,2, and 4 confirm this: they are primarily concentrated on hiring candidates who fit well in the team. However, the usual recruitment screening consists often of a selection procedure in which
skills and abilities are tested first (e.g. curriculum vitae) (Chand, 2016). This indicates that the current recruitment strategy has been taken over by events and change of the recruitment procedure is necessary to innovate.
Recruitment strategy
Prajapati (2014) stated that through referral network more strong ties would be attracted, whereas through online recruitment more weak ties would be attracted (Prajapati, 2014). This study expected that referral recruitment and thus strong ties are more important to founders, as the characteristics of strong ties could be more beneficial to start-ups (H2a). Because weak ties are not very important for a trusting relationship and transferring information, it was expected that online recruitment should not be important for start-ups (H2b.) Because of this, the study assumed that a mix of referral and online recruitment also would be less beneficial than referral recruitment, but more beneficial than online recruitment. (H2c). This corresponds with the outcomes that were found. Apparently, it is the most common option for a founder of a start-up to search in his/her network to look for people who want to join. This result is an interesting implication, as it contradicts the literature from Elfring and Hulsink (2003) and Uzzi (1997) who state that a mix between weak and strong ties is more important than using weak or strong ties. The use of a mix between weak and strong ties was also successful for the founder of case 3, who made use of both referral and online recruitment.
To see whether this referral strategy is also the most effective one, the influence of the different types of recruitment on the satisfaction of the founder about his/her employees was tested. This study assumed that the referral recruitment would lead to a higher performance of the start-up (H2d), but that the online recruitment and the combination of referral and online recruitment would not lead to a higher performance of the start-up (H2e and H2f). It has been found that, in contrast with H2d and H2e, the online recruitment leads to a higher performance of the start-up. whereas the referral recruitment does not affect the start-up performance. In line with H2f, the use of both types of recruitment does not affect the start-up performance.
Thus, the results indicate that the online recruitment, and thus the weak ties, play a more important role than start-ups currently assume. The results offer an interesting implication because as explained in the literature (Elfring and Hulsink, 2003), weak ties lead to more access to a broad network and thus, novel information. Apparently, these features are more beneficial for founders of start-ups during the hiring process than they currently think. Bartram (2000) stated, in agreement with these results, that online recruitment is ‘new and upcoming’. Thus, start-ups should follow the trend and use more online recruitment in order to hire candidates as
it leads to a higher start-up performance.
Another explanation could be that the referral recruitment could lead to ‘too close’ relationships, over-embeddedness, and a danger of not being openly to the outside world for new information, which could limit the growth potential of a start-up (Elfring and Hulsink, 2003). This is in line with the explanation of the founder in case 5, as this referral strategy did not work out as well due to too close relationships between the founder and his employees.
5.2 - Conclusion
To summarise, the purpose of this paper is to provide a model in which the most effective hiring and recruitment strategy were showed for start-ups. The 66 founders were necessary to provide this model, which is shown in figure 5.1.
Figure 5.1: Strategies for start-ups during the hiring process.
Regarding the hiring strategy, start-ups focus more on the personality than the skills of a candidate. As a result, focus on personality leads to a higher satisfaction of the founder and thus, a higher performance of the start-up. However, focus on skills does not correlate with a higher satisfaction. It seems that the start-ups on average are currently using the most effective hiring strategy by focussing on personality instead of skills.
Looking at the recruitment strategy, the highest focus for start-ups is on referral recruitment and the lowest focus on online recruitment. As reported by this research, however, online recruitment is more effective than referral recruitment. By making use of online
Strategies for start-ups during the hiring process
Hiring strategy: who should a founder hire?
Recruitment strategy: how should a founder hire?
Founder should focus on personality instead of skills
candidate
Founder should focus on online recruitment instead of referral
recruitment, more weak ties will be attracted to the start-up, which should lead to a broader network and more various sources (Elfring and Hulsink, 2003). This strategy, in contrast with the referral recruitment, seems to have a positive impact on the performance of the start-up. This research has further shown that experience in recruitment of the founder tends to be decisive to choose more often for online recruitment.
This model could serve as a tool for start-ups who want to determine their strategy to hire the best possible candidate. Although the ‘traditional’ recruitment focusses a lot on skills and abilities (Chand, 2016), the personal characteristics seem to be more effective for a start-up during the hiring process. Moreover, the online recruitment could help a start-start-up to obtain a broader network and more connections, which seems the most effective for a start-up (Elfring and Hulsink, 2003). These findings are of direct practical relevance for start-ups.
5.3 - Limitations research and future research
There are limitations to this research that need to be addressed. First, the biggest part of H3 could not be corroborated. This is due to a lot of small groups within each variable, which makes the significance very small. In some cases, the variable is significantly different from one of the strategies, but the groups itself do not differ from each other. A recommendation that could be made for a follow-up research is to divide the variables into a maximum of three groups, which increase the reliability in this research. A second limitation of this study that needs to be addressed is the choice of the respondents, the founders. Although it has been a well-considered choice to address the questionnaire to the founders, it would be interesting to ask HR-specialists of a start-up to share their vision instead of founders, because they are specialized in hiring candidates. The third limitation of this research is the sample size. In the research, 66 founders participated. This is a relatively small size, which could have influenced the significance and value of the results. By using a smaller sample, the probability of type-I and type-II errors increases, as could be the case in this conducted study (Bryman and Bell, 2011). The last limitation of this study is related to the sample size. The founders were only measured in Amsterdam and Utrecht. This is the result of the nonprobability convenience sampling – the start-ups were selected in proximity to the researcher. However, this is prone to bias (Fan and Zan, 2010). To increase the generalizability of the results, a more heterogeneous research sample should be used, with start-ups throughout the Netherlands. By implementing these recommendations into future research, more insights could be acquired into the hiring process of start-ups.
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