The most important resource available to an emerging company is its human capital. Consequently, many managerial resources are dedicated to the recruitment of manpower. In startups that are constantly growing, the process of finding and recruiting employees is often performed under the pressures of tight schedules and uncertainty with respect to the company's future needs. In many cases, the company's organizational structure is still unclear and recruitment decisions are made on the basis of assumptions about manpower needs that are likely to change later on. Many managers assume that an excellent worker could have a role in the company even if his or her actual functions will be different from those designated for them at the time of recruitment.
The issue of compensating managers and employees is material, and becomes even more important in startups: How can good managers and employees, who are so essential to the startup's success, be compensated, while preserving the company's funds as much as possible? How can managers be encouraged to identify with the investors' objectives in both good and bad times? How can a comfortable family atmosphere be created, yet employees terminated when necessary? All of these are issues confronted by companies in all areas and managers in all companies. In startups, however, they are intensified. The timetables and the pressures, the scarcity of resources, and the uncertainty all of these factors come together in startups and demand a management that will be excellent and unique, yet compensated in a manner appropriate for a company with no revenues, and certainly no profits.
This chapter reviews the main milestones in the recruitment process and provides a comprehensive overview of the components of compensation in high tech companies.