When Kayako first launched, all the startup’s hiring-related decisions were made by founders Varun Shoor and Jamie Edwards.
But when the team reached 25 employees, Varun and Jamie stepped back to focus on growing the business. Here’s what they did to make the transition.
First, they explained the ideal Kayako employee to their department managers. Then, they implemented a simple formula: the support head hired for support, and the sales lead hired for sales. Logical, right?
This freed Varun and Jamie to build out the product and help the business scale faster. Which is pretty much the goal of every founder.
And it worked. Kayako was growing and the product was improving.
But then something unexpected happened.
After just 18 months, Kayako stopped meeting its growth goals. Company profit per head was extremely low, employee performance had fallen, and most of the top performers had left.
Varun and Jamie started wondering what the hell was going on.
And so begins our story.
Don’t delegate hiring too early
When your best employees start to leave, raise the red flag. Then start collecting feedback on why they left.
By conducting exit interviews and asking honest questions, Varun and Jamie were able to start getting answers. And a lot of those answers pointed toward the new employees they were hiring.
It turned out that top performers were leaving because they weren’t happy with the people they were working with. Basically, they felt new employees were underperforming. And this was causing major tension. So much so, that they felt their best option was to bounce from the business.
At this point, it became very clear that we needed a hand.
After some reflection, the problem pointed back to hiring. And more specifically: to hiring managers. We dug some more, and found that the poor delegation of our hiring process had compounded into three core mistakes:
1. Hiring managers weren’t adequately judging skill or talent
For example, a candidate rated 10/10 would have only been rated 7/10 by Varun and Jamie in the past. There was definitely a disconnect.
2. We added people instead of solutions
Whenever teams encountered a challenging workload, they just hired more people. As it says in The Mythical Man-Month:
“If it takes 1 person to do it, adding another person doesn’t get it done quicker.”
3. We let the wrong people leave
Problems were intensified when the wrong people stayed and the right people left.
It seemed it all came down to delegating hiring too early—creating a high cost for the business.
So here’s what we did start fixing the problem.
Reboot the team and the hiring process
Kayako undertook an expensive process of re-evaluation and rebuilding. The company evaluated everyone, let people go, and rebuilt its hiring process.
“Every business operates on processes and systems, and hiring should be no different.”
It would have been easy to lay blame on previous hiring managers for all the poor decisions. Instead, we identified two reasons why this went so wrong for us:
We didn’t prioritize our time: we focused on the product, not our people.
We stepped away from hiring too early: We relied on “hiring osmosis.” As if new hiring managers would just magically “get” both the culture and the employees who fit into that culture.
Conclusion: we needed a better way to communicate who we wanted to join our company.
And that meant equipping ourselves better. We knew what wanted but we had no playbook. So this inspired us to do a lot of reading and find some key takeaways. Here they are.
Founders should continue the hiring process
We were inspired by Google founders, Larry Page and Sergey Page, who met every new hire for a one-on-one interview until they hit 650+ employees. If they had time to do this, then so did we.
Your business needs systems
Andy Grove’s High Output Management taught us this. We got poor results out of ambiguity because there was no process. Hiring demands a system.
Learn from the best hiring techniques
“Recruiting is often left up to intuition and that’s where natural biases occur when making hiring decisions. You’ll make a poor judgement on candidates just because of how you’re feeling that day.”
Many founders are ill-equipped to hire because it’s a new process to them. Often, it takes hundreds of mistakes and decades of hiring to understand how to do it.
This is covered in Geoff Smart’s Who: The A Method for Hiring—the most useful hiring resource on the market for founders.
And this gave us exactly what we needed:
Scorecarding: a process to focus questions.
Multi-stake interviewers: a team has more intuition to mitigate against hiring biases than a single person.
Topgrading: interview questions that take a chronological walk through a person’s career from beginning to end.
Once we had these tools, we began to see what Kayako’s hiring system should look like.
Set up a structure
Our research allowed us to build a new hiring process. Here's the five-step structure we came up with:
First round interview
The scorecarding interview
The founder-fit interview
The next thing we needed was software that let us do this. We selected Greenhouse.io because of it's scorecarding feature, which became a critical tool in our hiring process.
Now a bit more on each step of the hiring journey.
Phone interviews: don’t waste time
“Recruiting around startup values is essential for hiring success.”
If you’re not careful, it’s easy to waste a lot of time on interviews—especially on first interviews when candidates are unsuitable.
We decided that we needed a quick filter process that didn’t suck time out of the entire process. To be respectful to both us and our candidates, we now block a strict 30-minute window for intro calls.
First round interview: ask the right questions
Interviews are often used to get to know someone. But this isn’t the best approach. You need to ask the right questions if you want to know whether your candidate is going to be the right fit and a valuable asset to your business.
We used the Topgrading approach to give us a logical process to interview questions. This was something that was really lacking from our previous process.
Here’s how it works.
Topgrading recommends putting 1-3 hours into the first interview. This may sound like overkill, but by putting in this effort up front, a lot of time is saved as the candidate progresses further down the line.
Remember: the goal is to get the candidate to walk you through their career from beginning to end using these questions:
What were you hired to do?
What accomplishments are you most proud of?
What were some low points during that job?
Who were the people you worked with?
Why did you leave that job?
The intention of this interviewing technique isn’t to grill the candidate, it’s to get a complete picture of their career. The questions seem quite formal, so it’s up to the interviewer to shape them into a natural conversation.
Take-home test: judge performance
“We hire our support staff to be the customer’s advocate. Our take-home test lets us see how a candidate handles tricky situations. It adds concrete data to recruitment. It makes hiring decisions 10x easier for us.”
One of the biggest issues many businesses face in hiring is not knowing how a candidate will perform on the job. Let’s face it, it’s impossible to assess a candidate on resumes and interviews alone.
Plus, putting together a great resume and cover letter is a skill that most applicants have mastered. This why a take-home test is essential.
Kayako mostly uses the take-home test for engineering and customer support roles. We care deeply about how our customers are treated, so we like to see how candidates respond to customer queries.
So we created a customer service skills test to evaluate the core competencies for the position.
Two sample scenarios of actual customer conversations are given to candidates so we can analyze the tone of voice they use, and the proactive nature of the support they would give.
Important: take-home tests should be concise and take only about an hour for candidates to complete.
Scorecarding interview: quantify skills
“At Kayako we’re fanatical about hiring for cultural fit.”
A scorecard is a way of putting essential traits or skills into a quantifiable format. This is the most important aspect that we introduced.
Our founders had often struggled to communicate with past hiring managers on the traits and skills they were looking for. But a scorecard makes this process simple.
First, we get 2-4 people from the team to meet candidates. Their job is to listen, observe, and ask the occasional question for clarity. The main purpose of this interview is to identify a list of skills that will help candidates perform well. These are:
After the interview, the team rates scorecard skills on a scale of 1-4.
The founder interview: measure cultural fit
“One of our company values is ‘live to learn.’ In founder interviews, we focus on how a candidate claims to know what they know. We ask questions about reading habits, courses they’ve taken, and their incentive behind learning particular skills.”
When Varun and Jamie removed themselves from the interview, it created big problems. So they put themselves back into the process for a founder-round interview.
The purpose of this interview isn’t to undermine a hiring team’s judgment. It’s about assessing cultural fit for the company.
And who better than a founder to do this?
Varun and Jamie know the values of the company—they created them—so they can see straight off whether a candidate fits into their organization, even if when they have the right skillset.
Did our new hiring process improve our culture?
After introducing the take-home test, only 50% of people that were selected for a test would complete it. This filtered out people who were not invested in our company.
Voluntary employee attrition decreased by 50% over a 3-year period.
Employees now have a 90% likelihood of recommending Kayako as a good place to work in the UK.
Current average hiring time is 24 days from phone interview to job offer, two days less than the previous year.
“We value our company culture, and we protect it through the hiring process. You're not looking for just anybody to join your team—you want the right people. Hiring structure creates the foundation to build a company culture and employee experience.”
The elements of hiring success
One of the major difficulties in the hiring process is communicating to your manager what you are looking for in employees. We failed at that in our first year.
But after some difficult and costly periods for the business—and restructuring our hiring process—we now have a system that translates intuition into objectives, a playbook, and a checklist.
This is what all founders need. While you may not have an in-depth hiring process like the one outlined above, using a scorecard to quantify traits and skills, finding a way to test pre-employment skills, and by using a cultural fit interview, you’ll reduce the likelihood of hiring the wrong candidate.
Our founders Varun and Jamie piloted this process from the start, and have finally started to leave hiring behind. Although not entirely, they still see themselves as co-pilots in the process.
Kayakers are now happy to come to work, they feel part of an amazing team, and they’re drawn to helping customers. That’s how you grow a successful business.