Tal­ent Trends

Inc. (USA) - - DEPARTMENTS -

If you don’t hire your first staffer early in your busi­ness life cy­cle, you might not ever hire

RE­CENT RE­SEARCH SHOWS that if you don’t hire an em­ployee early in your startup’s life­span, you prob­a­bly never will. Among star­tups that launch with no em­ploy­ees, “the bulk of hir­ing oc­curs in the first few years of ex­is­tence,” says re­searcher Robert W. Fair­lie of the Univer­sity of Cal­i­for­nia, Santa Cruz. “Af­ter a few years, the hir­ing rate of these com­pa­nies drops off very fast.” Fair­lie and Javier Mi­randa of the U.S. Cen­sus Bureau an­a­lyzed 2,460 star­tups in the Kauff­man Firm Sur­vey that launched with­out em­ploy­ees. (The sur­vey, which fol­lowed the same batch of com­pa­nies over seven years, didn’t in­clude com­pany types that were likely never to hire, such as in­de­pen­dent con­sul­tants.) Ac­cord­ing to these re­searchers, by three years af­ter startup, 54 per­cent of firms had hired at least one em­ployee; four years later, that had in­creased only slightly, to 59 per­cent. The chart be­low shows how those hir­ing trends break down by in­dus­try. In­creas­ing per­cent­ages af­ter year 1 are skewed as the pool of sur­viv­ing com­pa­nies shrinks and is in­creas­ingly dom­i­nated by com­pa­nies that hired at least one per­son, an ef­fect that be­comes more pro­nounced af­ter year 2. —KRIS FRIESWICK

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