Hiring employees for your startup is like a “chicken and egg” problem. You need employees to grow your startup. To grow your startup, you need employees.
As founders, your mission is to find creative solutions to move your startup forward. In this blog post, we’ll cover the different options for hiring employees with little or no money.
And the first step is not to hire a full-time employee.
Skip Hiring a Full-Time Employee
When launching your startup, consider your early tasks project-based rather than long-term commitments. This approach allows you to focus on immediate needs without the overhead of a full-time employee.
For instance, if you need a website, hire a web designer on a project basis rather than hourly—this helps manage costs effectively by agreeing on a fixed price, typically paid as 50% upfront and 50% upon completion.
In the early stages of my startup, I realized the importance of adaptability and learning new skills to save costs. Instead of relying continuously on a designer, I learned how to use WordPress and Elementor. This allowed me to quickly update my website, like adjusting text or changing images, without paying for additional hours of design work. It was a practical move that not only reduced expenses but also gave me more control over my project’s timeline and execution.
Try to postpone hiring a full-time employee for as long as you can. This allows you to raise funding or increase the revenue of your startup to cover the cost of hiring an employee.
3 Ways to Hire for Startups with Little or No Money
However, there are times when you must absolutely hire an employee. Here are 3 ways to help you.
Work with Universities to Get Interns
Partnering with universities to secure interns is a highly effective and budget-friendly hiring strategy. You can establish these partnerships by collaborating with organizations that connect startups with internship programs or by contacting universities directly to create internship opportunities.
This approach is particularly advantageous for remote startups, as it widens the pool of potential universities and candidates. Ensure the universities support remote work arrangements for their interns to maximize your reach.
Outsource to the Philippines
Outsourcing to the Philippines is a cost-effective option for startups, particularly those based in high-cost regions like the US, UK, or Australia.
Marketers in the Philippines have:
- An hourly rate between $5 to $15 per hour
- Extensive experience in marketing
- Higher education in communication from top universities
- Excellent written and verbal English
- A great understanding of the Western culture
In the UK, the hourly rates for a marketing assistant can vary. Generally, the average rate is about £13 per hour, but this can be as high as £23 per hour depending on experience, location, and specific job responsibilities.
This significant difference in cost can be a deciding factor for startups looking to manage their budget effectively while still acquiring skilled marketing support.
If you’re considering this route, we provide a guide and personalized assistance to start hiring in the Philippines. You can book a call with me so we can address all the concerns you have when it comes to building a team in the Philippines.
Work with Talented Individuals Who Are Looking for the Flexibility of a Startup
Embrace the opportunity to work with individuals transitioning from more structured roles to more dynamic environments typical of startups. For instance, individuals who just quit their corporate jobs to seek a more exciting role are good candidates to work with your startup.
My own journey from a call center agent to a marketing and writing role in a startup allowed me to explore and expand my skills in a way a corporate job never could.
Initially, I accepted a lower salary but gained invaluable experience and eventually increased my earnings. I even had lots of travel opportunities. I was able to explore different areas of marketing and found out more core skills.
Here are a few ideas to find these people:
- Leverage Your Network: Start conversations with acquaintances who have recently left their jobs or are actively seeking new challenges. Social media platforms like LinkedIn are excellent for this.
- Highlight Opportunities for Growth: Make it clear that while the initial pay might be lower, the diverse experience and rapid growth potential can lead to more substantial roles and better compensation in the future.
- Showcase Flexibility and Impact: Promote how working at your startup allows for flexible work arrangements, significant autonomy, and a chance to have a real impact on the business.
By positioning your startup as a hub for growth and flexibility, you can attract motivated individuals eager to drive their careers forward in a vibrant and evolving environment.
Different Types of Hires You Can Consider in the Philippines
Option 1: Project-Based Hire
Project-based hiring is ideal for specific, short-term tasks or projects requiring specialized skills. This option is cost-effective as you pay only for the work done without long-term commitments. It’s perfect for startups needing to launch a website, develop a marketing campaign, or complete any other defined project.
Option 2: Freelancer with Booked Hours Per Month
Hiring freelancers on a monthly booked hours basis provides more continuity than project-based contracts without committing to full employment. This model suits ongoing tasks that require regular attention but not a full-time position, allowing for flexibility in workload and budget management.
For example, I have a marketing technical assistant who I work with for 40 hours per month.
Option 3: Full-Time Contractor
Opting for a full-time contractor in the Philippines offers significant cost savings and reduced paperwork. Unlike traditional employees, full-time contractors handle their own taxes and benefits, simplifying your processes.
This setup is beneficial as it doesn’t require creating a legal entity in the Philippines, yet it ensures contractors have the support they need. Our hiring services manage these contractors, integrating them into your team while fostering a sense of community among them. This approach not only saves on costs but also builds a stable and dedicated team environment.
What about working with talents on Upwork?
Platforms like Upwork and Fiverr are great for finding talent for short-term projects, but for long-term engagement, direct relationships with freelancers and contractors can be more beneficial.
This approach allows you to cultivate the company culture you desire and build lasting relationships with trusted freelancers, turning them into full-time resources as needed without starting from scratch each time.
By exploring these hiring options, startups can efficiently scale their operations in the Philippines while maintaining flexibility and controlling costs. This strategic approach to staffing ensures that your startup can adapt and grow in a cost-effective manner.
How to Calculate If You Can Afford to Hire Someone
The best way to calculate is to understand the cost of the monthly salary, add 30% for additional costs, and multiply it for at least 6 months. For startups, it’s hard to look at yearly projections. So, I recommend estimating the cost quarterly or 6 months at the most.
Is your startup bootstrapped, or do you have seed funding? Do you already have a monthly recurring revenue?
Other things that will affect your decision to hire:
- Cost of a recruitment agency
- Tools to help you hire if you’re doing the hiring by yourself
- Transfer fees when sending payroll globally if you’re building a remote team
After laying out all potential costs and forecasting future revenues, compare whether the anticipated revenue growth from hiring an additional employee justifies the associated costs. If the cost of hiring and maintaining an employee is too high compared to the expected revenue or current funding, it might be more feasible to consider alternatives such as part-time hires or freelancers.
In my own startup, I’ll know if we can cover the payroll based on the revenue that is coming in per client. I only hire and build a team once we’ve onboarded a client. Your situation might be different, especially if you’re just building software and trying to get your initial customers. As long as you know where the payroll is coming from, you can confidently hire someone.
For more details on your hiring strategy and to connect with resources to assist you, visit our hiring page at irenechan.co/hiring.
Wrapping Up
Growing your team is one of the hardest challenges for a startup founder. But nowadays, there are sustainable and creative solutions. It’s about understanding your immediate needs while building a long-lasting company. Whether you’re hiring a part-time freelancer or full-time employee, make sure that you’ve done the math. Know that hiring full-time isn’t your only option. There are different ways to achieve your results!
