evolving recruitment strategies
TRANSCRIPT
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EVOLVINGRECRUITMENTSTRATEGIESAstudyonrecruitmentbestpracticesinhighgrowthtechnologycompanies
JoakimKarlsson(23002)
Abstract:Recruitmentandrevenuegrowtharestronglycorrelated inSwedish
high-growthtechstart-upsbutthesecompaniesfaceacontinuouschallengeof
finding and recruiting talent in sufficient quality and numbers. The thesis
answers the question on how such companies manage to recruit the
employees they need. Since few studies have been performed on these
companies’recruitmentstrategies, thethesisbuildsontheoryaswellasona
qualitativeandexplorativeanalysisof11Swedish techcompanies.The thesis
proposesamodelofninebestpracticeswhichappliesacrossrecentlycreated
start-ups aswell as larger start-ups. Best practices include hiring a person in
charge of recruitment as soon as the company starts to grow, keeping job
descriptions broad,minimising the use of external recruitment agencies and
establishing internal search teams instead. Successful Swedish tech start-ups
innovate not only in technology and marketing but also in recruitment
strategies,whichshouldserveasaninspirationforotherstart-ups.
KeyWords:Humanresourcemanagement,recruitment,highgrowth,start-ups
StockholmSchoolofEconomics
Course619–ThesisinManagement
CourseDirectors:KarinFernler;LaurenceRomani
Supervisor:StefanEinarsson
Thesispresentation:May2016
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Foreword
Iwouldliketothankeveryonewhohelpedmewiththewritingofmythesis,especiallythe
twelvepersonswhoacceptedtobeinterviewed.
Furthermore, Ialsowant to thankmysupervisorStefanEinarssonand thestudents in the
tutoring sessions Emelie Hedin, Maria Lindholm, Gustav Flink, Jimmy Lindfors, Freddie
Eklund,OskarAlktun,LudwigSöderqvist,andJakobPreutzApériaforinterestingdiscussions
andtheirvaluablefeedback.
JoakimKarlsson
Stockholm,2015-04-29
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TableofContents
1.Introduction...................................................................................................................51.1Background...........................................................................................................................5
1.1.1TheimportanceofHighGrowthcompaniesandtheirrecentboominStockholm...............51.2TheimportanceofRecruitment.............................................................................................51.3Purpose.................................................................................................................................81.4Researchquestion.................................................................................................................8
2.TheoreticalFramework...................................................................................................92.1RecruitmentProcess..............................................................................................................9
2.1.1RoleDefinition.....................................................................................................................102.1.2Advertising...........................................................................................................................102.1.3Headhunting/Externalrecruitmentagencies.....................................................................102.1.4Referrals...............................................................................................................................11
2.2Companygrowth–DifferentstagesinHRM........................................................................112.3HumanResourceManagementinsmallbuthighgrowthfirms............................................13
2.3.1Impactoffirmsizeoneffectivenessofrecruitmentpractices............................................132.3.2Impactofhighgrowthoneffectivenessofrecruitmentpractices......................................14
3.Method........................................................................................................................153.1ResearchMethod................................................................................................................153.2Approach.............................................................................................................................153.3Design.................................................................................................................................163.4Selectionofcompanies........................................................................................................173.5Selectionofinterviewees.....................................................................................................173.6Methodfortheanalysis.......................................................................................................183.7CredibilityandAuthenticity.................................................................................................18
3.7.1Credibility.............................................................................................................................193.7.2Authenticity.........................................................................................................................19
3.8Ethicalconsiderations..........................................................................................................19
4.EmpiricalEvidence........................................................................................................214.1Companies...........................................................................................................................214.2RecruitmentStrategyandProcesses....................................................................................214.3EvolutionofRecruitmentStrategy.......................................................................................234.4CandidateAttributes...........................................................................................................244.5Inspirationfromothercompanies.......................................................................................264.6WorkDescriptions...............................................................................................................274.7Stagesinthecompany’sdevelopmentandemployerbranding............................................284.8Summaryoftheempiricalevidence.....................................................................................29
5.Analysis........................................................................................................................315.1ModelforRecruitmentinSwedishHigh-growthTechCompanies........................................315.2Comparisonofthemodeltotheoryandtheempiricalevidence..........................................35
5.2.1Hirearecruitmentspecialist................................................................................................355.2.2EstablishHR&RecruitmentStrategy..................................................................................355.2.3Tailoredrecruitmentstrategy,butwithanemphasisonreferrals......................................365.2.4BuildEmployerBrand..........................................................................................................375.2.5InternalRecruitmentandSourcing......................................................................................385.2.6Internationalrecruitment....................................................................................................395.2.7Morestructureandrules.....................................................................................................395.2.8Start-upculture...................................................................................................................40
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5.2.9Broadworkdescriptions......................................................................................................41
6.Discussion....................................................................................................................426.1ResultofthestudyandpracticalconsequencesforCompanyandHRManagers..................426.2Evaluationoftheresultsvis-à-visthemethod.....................................................................426.3Suggestionsforfurtherresearch..........................................................................................43
7.Conclusion....................................................................................................................447.1AnswertotheResearchQuestion........................................................................................44
7.References....................................................................................................................45
8.Appendix......................................................................................................................498.1RespondentGuide...............................................................................................................498.2CompanyGuide...................................................................................................................508.3InterviewGuide...................................................................................................................548.4ExtraGraphs........................................................................................................................57
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1.Introduction
1.1Background
1.1.1TheimportanceofHighGrowthcompaniesandtheirrecentboominStockholm
TheNordicRegionattractssignificantinvestorattentionwithsuccessfulSwedishtechfirms
standingout.AfterSiliconValley,Stockholmproducesthehighestnumberofunicorns1per
capitathananyotherglobalcityandSwedenasawholecomessecondintheworldonaper
capitabasis.TheNordic regionrepresents2%ofglobalGDPbuthasaccounted foralmost
10% of theworld’s billion-dollar exits over the last decade,withmore than half of these
coming from Sweden. Unicorns with an origin in Sweden include Fingerprint Cards,
King.com,Klarna,Mojang,Qliktech, Skype&Spotify and thereare several unicorns in the
makingincludingTobii,TruecallerandiZettle.
In Barrett and Mayson’s International handbook of entrepreneurship and HRM (Human
ResourceManagement) (2008),Heneman,Tansky,andCamp(2000)stress the importance
ofhighgrowthcompanies for their respectivecountries.Ofmost importanceaccording to
Goswami, McMahan and Wright (2000) are entrepreneurial firms since they have the
potentialtobecomehigh-growthfirms.
1.2TheimportanceofRecruitment
Recruitment is a critical aspect of Human Resources for any company. In a study by SHL
TalentManagement(whichformspartofCEBTalentMeasurement),failedrecruitmentand
1AUnicorn is a start-up companywhich has reached a value ofmore thanUSD1billion, in other
words a company characterised by very high growth. According to VentureBeat, there were 229
unicornsintheworldasofJanuary2016.ThelargestunicornsincludeUber,Xiaomi,Airbnb,Palantir,
Snapchat,DropboxandPinterest.Unicornsappearinvariousregionsoftheworld,butmainlyinthe
USA,andespeciallyinCaliforniawhere101unicornsareheadquartered.
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poor human resources development costs Swedish companies more than 10 billion SEK
annually.
As can be seen in the below charts for Spotify, Klarna and iZettlewhich form part of 11
interviewedcompaniesthereisaverystrongcorrelationbetweenorganisationgrowthand
revenuegrowth (Retriever).Asimilarlystrongcorrelationexists for theother8companies
thatwereinterviewed.
Spotify
Correlationfactor:0,985
Graph1:SpotifyRevenueandEmployees(2010-2014)
Klarna
Correlationfactor:0,994
Graph2:KlarnaRevenueandEmployees(2010-2014)
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2010 2011 2012 2013 2014
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2010 2011 2012 2013 2014
Omsättning AntalAnställda
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iZettle
Correlationfactor:0,894
Graph3:iZettleRevenueandEmployees(2010-2014)
Findingtherightpeopletoworkatacompany isoneof theessential tasksofacompany.
Theonlyunique,sustainablesourceofcompetitiveadvantageisthehumancapital(Gratton,
2000;Michaelsetal.,2001).Maintainingandstrengtheningthecompany’shumancapitalis
one of the main strategic challenges facing the human resource (HR) professional, and
recruitmentandselectionarekey toachieving thisgoal (BanfieldandKay,2008).Burrows
(2004)explainsthatacompanymusthaveafirmgraspofhumanresourcemanagementand
have an understanding for the whole process, and that a lack thereof could lead to
unfortunateimplicationssuchashiringthewrongpeople.
Greiner (1972) studied organizational growth and the different phases that such growth
consistsof.Hedescribed itasapatternofevolutionandrevolutionwithacompanygoing
through periods of evolutionary growth followed by shorter transformational and painful
revolutionary periods. Galbraith (1985) argues that all companies need not grow in this
manner and that the key tomanaging these painful transitions is fixing organization and
humanresourceplanning.Henemanetal.(2000)alsoemphasizetheimportanceofHuman
ResourceManagement (HRM) in thesuccessofcompanies.ResearchbyNealetal. (2004)
and Purcell (2003) shows that HRM has the potential to deliver strategically valuable
outcomes.While it is difficult to establish clear-cut cause and effect relationships, certain
outcomes can without doubt be connected to HRM (Legge, 1995). Most small firms are
characterizedbyinformalHRM(Cardon&Stevens(2004),Casselletal.,(2002),Henemanet
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2010 2011 2012 2013 2014
Omsättning AntalAnställda
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al.,(2000)).Galbraith(1985)describestheprocessbywhichfirmgrowthisaccompaniedby
changesandthecreationofformalHRdepartments.
High-growth companies are vital for an economy and society and recruitment is vital for
these high growth firms. However, there is a lack of theoretical and empirical studies
concerning high-growth companies and recruitment. Heneman et al. (2000) call formore
research on HRM strategies in entrepreneurial firms. This thesis should contribute to
managementtheorywithregardstorecruitmentthroughitsanalysisofdifferentstrategies
employedbyentrepreneurialrapidly-growingcompanies.
1.3Purpose
Theobjectiveofthethesis isto identifyrecruitmentbestpracticesacrossboththeoryand
empiricaldatafromelevenSwedishtechcompaniesthathaveexperiencedandcontinueto
experience rapid growth. The study focuses on Swedish tech start-ups as there is little
research related to their recruitingpractices,despite theSwedish techscenebeingsucha
hottopicandrecruitmentbeingsuchan importantcontributortotechcompanies’growth
andsuccess.
The thesis should provide a better understanding of the recruitment challenges faced by
high-growthentrepreneurialcompaniesinSwedenandactasaguidetostart-upsonhowto
strategically plan their recruitment strategy based on both theory and the experience of
othercompanies.
1.4Researchquestion
Thefollowingresearchquestionhasbeendefinedforthethesis:
Howdohigh-growthSwedishtechcompaniesmanagetorecruittheamountofemployees
thattheyneed?
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2.TheoreticalFramework
Mondy & Mondy (2013) divide Human Resource Management into five parts: Staffing,
Human Resource Development, Compensation, Safety and Health, Employee and Labour
Relations.Barrettetal.’s(2008)divideHRMintoSelectionandRecruitment,FormalTraining
and Performance Evaluation, and Remuneration and Compensation. The thesis focuses
solelyonSelectionandRecruitment,orStaffinginMondyandMondy’smodel.
Thischaptergoesthroughthetheoreticalframeworkonhigh-growthtechfirms’recruitment
strategies.Theframeworkisbasedonresearchliteratureonthetopicofrecruitment.
2.1RecruitmentProcess
RecruitmentcanbedividedintofourcategoriesaccordingtoGranberg(1994)andHeneman
etal.(2008).Seemodelbelow.
Figure1:Granberg’sfourstagesofRecruitment
Firstcomesthedefinition oftherolesthatneedtobefilled.Thisincludesdefiningtheworkdescriptionandtasksforthenew
employees.
ThenextstepistheSearchphase wherecompaniesusedifferentchannelssuchasheadhunting,advertisementsandreferralstofindtheappropriatecandidatesforopenpositions.Wewillgointofurtherdetailaboutthedifferentrecruitmentchannels
below.
Oncecandidateswhowanttoworkatthecompanyhavebeenidentified,thecompanyhastosortandevaluatetheminordertofindthebestpersonforeachrole.Thisiscalledtheevaluationandselection phase.
Finally,oncecandidatesarechosenandhired,thereisalaststagecalledonboarding,whichiskeygiventhecostandtimeofthe
wholerecruitmentprocess- iftheonboardingprocessdoesnotgoasrequired,thecompanywillhavetogothroughthe
entireprocessagain.
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The thesis encompasses the first three of the four phases and if/how tech companies’
recruitment strategies have changed as the company has grown. Research by Rioux and
Bernthal (1999) shows that the more effective a company’s recruitment strategy is, the
morelikelyitisforthecompanytoemploybetterandmoresatisfiedemployees.
2.1.1RoleDefinition
IntheirstudyHenemanetal(2008)explainthatjobdescriptionsaremorelooselydefinedin
visionaryhighgrowthcompanieswith jobduties shapedmoreby theemployee thanbya
specific job description. However, job descriptions depend significantly on the level of
employment (Banfield & Kay, 2012). Junior levels have more defined tasks, while senior
levelsaremoreconcernedwithoverall responsibilities.Wecanconclude that tech jobs in
theinterviewedcompaniesshouldbelessclearlydefinedthanmoretraditionaljobs.
2.1.2Advertising
Out of the recruitment channels for all companies advertising is the most widely used
(BanfieldandKay,2012)withonlineadvertisingasthemostrecenttrend.BanfieldandKay
(2012) suggest that companies are moving away from traditional methods of attracting
applicantstowardsonlineadvertisingmainlybecauseittendstobecheaperthantraditional
advertising.
2.1.3Headhunting/Externalrecruitmentagencies
Withregardstoexternalrecruitmentagencies,alsocalled“headhunters”,BanfieldandKay
(2012) explain that this source can be effective, but that both costs and quality can vary
significantly and that employee retention can become an issue when using external
recruitmentagencies.Theygoontosaythatthischannelcanbeverytargetedandefficient
but that it cancomeatahighprice.Abenefitofexternal recruiters is theirability toalso
trackdownpassivecandidates (i.e.potentialcandidateswhoarenotactively looking fora
job). Mondy and Mondy (2013) point out that external recruitment agencies can be of
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varyingqualityand shouldbecarefully selectedby theniche that the specific recruitment
agencyisspecializedin.
2.1.4Referrals
Most jobpositionsare filled throughemployee recommendations,alsoknownas referrals
(Bohlander and Snell (2013). Thebenefits of using referrals according toBanfield andKay
(2012)are their inexpensivenesswhile stillmaintainingefficiencyandquality.Shuit (2006)
alsopointsoutthatthequalityoriginatingfromthissortofrecruitment isnormallyhigher
and the applicants if hired tend to stay longer in the company (Fernandez et al, 2000).
Mondy &Mondy (2013) explain that this can be due to the fact that applicants arriving
throughreferralsarepre-screenedbythepersonprovidingthereferral.
Rob Fuggeta (2012)makes anobservationwith regards to the rewards system,explaining
thatthereferrallosessomegenuinenesswhenafinancialrewardisapplied.
2.2Companygrowth–DifferentstagesinHRM
Companies grow and have different challenges at different points of their development.
HumanResourceManagementandRecruitmentstrategiesneedtoadapttothesesteps in
theprocessinordertobeeffectiveforthecompany.
Inthe1stchapterwewereintroducedtoGreiner’stheoriesonevolutionarygrowthpatterns
in companies. The below figure shows Greiner’s growthmodel which explains howmost
companies have a period of growth, followed by a crisis which they have to fix. If they
managetoresolvethecrisis,thecompanycankeepongrowinguntilithitsthenextproblem
whichitneedstosolve.
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Figure2:Greiner’sGrowthModel
Greinerexplainsthatinthefirststageacompanygrowsthroughcreativity.Themainfocusin
thisphaseisbuildingaworkingproductandfindingtherightmarket.Oncethecompanyhas
founditsmarketandstartedoperating,thenextstepismakingtheoperationmoreefficient
and this is why a crisis of leadership can arise as the more creative entrepreneur and
founderofthecompanytypicallycannothandlebusinessaspectsaswellascreativeaspects.
In this case there should be a delegation of leadership responsibility to other managers
leading to a new growth period through direction. The next crisis becomes a crisis of
autonomy when the company has become too large for only a few managers to decide
everythingandthecompanyneedsdelegationinordertogrow.
Galbraith(1985)hasbuiltonGreiner’smodeloforganizationalgrowthwithregardstoHR.
Galbraith explains that every start-up begins with a handful of people and an informal
organizationmanagedbyface-to-faceinteraction.Companiesinthisphasearecharacterized
by the informal communicationamongemployees.As size increases,asanumberof sites
and divisions are created, formalization and impersonality increases and the functional
organizationinevitablyarises.
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Afirststageconcernscreativityand“invention”;asecondstageiswherethebusinesssideof
theconceptstartskickingin;followedbyathirdstepwhereefficiencybecomesevenmore
importantoncethebusinessmodelhasbeenproventowork.Thisthesisstudiescompanies
in the transition between stage 2 and stage 3 given that themajority of the interviewed
companiesare in theearly stagesof companygrowthandhaveexperiencedorare in the
process of experiencing these challenges. The findings show that companies go from
informalitytoformalityastheypassacertainearlystage.
Galbraithexplainsthatthereisarapidadditionofnewpeopleandnewfunctionsandthat
everythinghastobesynchronized(engineering,manufacturing,salesandservice) inorder
for the company to sustainably grow.Notmany tech companies have the sort of growth
described by Galbraith (adding 1,000 people in 1-2 years). However, one can expand the
conceptofastart-upphasetoencompasscompaniesthathirehundredsofpeople,instead
of thousands. The same structural and organizational dilemma remains true for these
companies,albeitataslightlylowerscale.
2.3HumanResourceManagementinsmallbuthighgrowthfirms
2.3.1Impactoffirmsizeoneffectivenessofrecruitmentpractices
Mondy and Mondy (2013) note that smaller companies tend to find more candidates
through network recruiting and referrals. This is supported by extensive research on the
subject (KoteyandSheridan,2004;Saarietal.,1988;Wilkinson,1999;AldrichandAuster,
1986).WilliamsonandRobinson (2012)observethat formal recruitmentpractices, suchas
using external recruitment agencies, provide an advantage for smaller firms due to their
ability to expand the number and diversity of applicants. However, due to smaller firms’
limitedfinancialresourcesandthefactthatformalpractices(suchasheadhunting)aremore
expensivetoimplement,smallerfirmsarelesslikelytousethismethodandmorelikelyto
usereferrals(KoteyandSheridan,2004).Asthecompanygrowsthebenefitsofusingformal
methods also increase. This is linked to ‘employer branding’; the more well-known a
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companyis,themoreapplicationsitwillreceivethroughformalnetworks(Williamsonetal.,
2002).
2.3.2Impactofhighgrowthoneffectivenessofrecruitmentpractices
With specific relevance to this thesis, Barrett and Mayson (2006) have researched small
high-growthcompaniesandhowHRinthecompaniesdealswithproblemslinkedwithrapid
growth. Their observations include hiring specialists instead of generalists, and having a
morewell-definedcompanystructuretofacilitategivingrolesanddefiningtasks.Barrettand
Maysonexplainthatcompanies“shouldestablishformalHRMpracticesinordertohelpcope
withtheincreaseincomplexityresultingfromgreaternumbersofemployeesifgrowthisto
besustained”.
Rutherford et al. (2003) confirm this researchby showing that rapidly-growing companies
shouldconsider formalisingprocessesanddevelopingoperationalandmanagerial systems
aswellasothertypesoforganisationalinfrastructurewhichmayreducedependenceonthe
owner-manager.Whiledependencemaynotbeentirelyeliminated, formalisationand the
developmentofsystemscanprovideaplatformfromwhichsustainablegrowthcanoccur.
In the empirical section, we will analyse the similarities and differences between the
interviewedcompanies’recruitmentstrategiesaswellastheirevolutioninordertocreatea
modelofbestpracticesforrecruitmentinhigh-growthcompanies.
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3.Method
3.1ResearchMethod
The objective of the thesis is to identify recruitment best practices from theory and/or
empirical data on the recruitment strategies of eleven Swedish tech companies that have
experienced and continue to experience rapid growth. A tech company is defined as a
companythathasatechnologicalproductorwhosecorebusinessisbasedontechnology.
GiventhattheinterviewedcompaniesdonotpubliclyshareinformationontheirHRMand
recruitment strategies, there were two ways of obtaining the information for the thesis:
throughqualitativeinterviewsoraquantitativemethodsuchasasurvey.
Bell (2006) points out thebenefits of an explorativemethodwhen researching areas that
havenotbeenextensivelystudiedbefore.Yin(2014)pointsoutthataqualitativemethodis
preferableforastudyanalysingarelativelynewtopic.Consideringthe lackofresearchon
recruitmentprocesses inhigh-growthSwedish techcompaniesandof theirevolutionover
time, it appears that an explorative and qualitative research method is suitable for this
study. The qualitative method allows for a deeper understanding of the complex
phenomenathatarebeinganalysedandexistingresearchandstudiesareusedtocompare
theempiricalfindings.
As there is no secondary data source available that can be used to validate the collected
data and that the interviews can give a subjective view of the company’s recruitment
strategy,thegathereddataneedstobecriticallyanalysedandquestioned(Bryman,2002).
The empirical data collected through the interviews is thereafter divided into different
motifsandtopics,inordertosimplifytheanalysisofthedata.
3.2Approach
A deductive reasoningmeans taking a hypothesis fromexisting theory and conducting an
empirical test of that hypothesis. An inductive reasoning implies coming to broad
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conclusions based on empirical evidence (Bell, 2006). A middle-way, called abductive
reasoning, means making use of incomplete theory and data, and adapting one when
learningsomethingnewintheother,andviceversa.
Anabductive reasoninghasbeenchosen for the thesisas there is limited researchon the
recruitingprocessesofSwedishhigh-growthstart-ups.Thestudyisbuiltonexistingresearch
onthetopicofrecruitmentwiththedatagatheredfromthequalitativeinterviews.
Qualitativeinterviewsenablethecontributiontoandexpansionofexistingtheories,rather
than validating already established theories (Bonoma, 1985). The qualitative method is
focusedondescribingprocessesandpatternsandonhow theyevolveover time (Bryman
andBell, 2013). All the above factors arewhyqualitative interviewswere selected as the
methodforthethesis.
3.3Design
The thesiswas executed as a qualitative case studyof eleven companieswheredatawas
gathered from interviews with recruiting managers, HR managers, CEOs as well as a
consultantfromarecruitmentagency.
Acommoncriticismofqualitativeresearchistheirpotentiallackofobjectivity,whichiswhy
semi-structured interviewswere performed. Bernard (2006) explains that semi-structured
interviews provide reliable, comparable and qualitative data and that they also help the
interviewer to keep control of the conversation and discussion topic while allowing the
interviewerandtherespondenttofollownewleads.BrymanandBell(2013)showthatthis
sort of interview allows interviewers to ask deeper follow-up questions if they are not
satisfiedwiththeinitialanswer.
Theguidethatwasusedtoconducttheinterviewsisincludedintheappendix.Thequestions
were based on existing theory on the subject in order to obtain asmuch information as
possibleoutoftheinterviews.Theinterviewscoveredthetopicofrecruitment,andincluded
questionsaboutthecompanycultureinordertogainabetterunderstandingofthesubject.
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3.4Selectionofcompanies
20companieswerecontactedandaskediftheywerewillingtobeapartofthestudy.The
criteriaforselectingthesecompanieswereasfollows:
• haveastrongcouplingtoatechnology-basedproduct
• bebasedinSwedenorwithanorigininSweden
• experiencerapidgrowth,definedasacompoundannualrevenuegrowthratesince
2010ofmorethan20%2
Both established companies and small companies with less than 50 employees were
interviewed.Smallcompaniestendtofocusontheirproductand/orserviceandonmeeting
only basic HR requirements and are not expected to have established an HR department
(seeTheoreticalFramework).
SomecompaniessuchasTictailandiZettlearesmallincomparisontoKlarnaandSpotify,but
provideuswith insights into theearlier stages (phaseoneand twoof theGreinergrowth
model)oftheestablishmentofformalrecruitingdivisionsinstart-ups.
Thedecision to also interview smaller companieswasmadewhen therewas a realisation
thatseveralintervieweeslackedinformationvitalforthestudywithregardstotheevolution
of the company’sHRand recruitment strategy. In addition, thenumberof relatively large
tech start-ups in Sweden is quite small and by expanding the number of interviewed
companiestheempiricaldatacouldbesignificantlyimproved.
3.5Selectionofinterviewees
Withtheresearchquestionfocusingonrecruitment,thetargetintervieweeswerethehead
of recruitment at the company who should have the best knowledge of the company’s
recruitment strategy. Inmost cases, the interviewswerewith the head of recruitment or
2NotethatrevenueinformationisnotavailableforCryexandAnima,whoaretoorecentlyfoundedforthiscriteriontoberelevant.
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with one of company’s recruiters. However, interviews were also conducted with HR
managers(inDICE)andCEOs(ofKing.comandCryex).
The listof interviewsaswellasmore informationontherespondentscanbefound inthe
appendix(see8.1).
Aninterviewwasalsoconductedwithanexternalrecruitmentconsultantinordertogetthe
perspectiveofexternalrecruitmentagencies.
3.6Methodfortheanalysis
Thetranscriptionoftheinterviewswasdoneatmostonedayaftereachinterview,allowing
for a continuous analysis and a better understanding of the recruitment processes and
strategies in tech start-ups. The relevant data for the research question was sorted into
commonthemesacrossthecompanies,andlateranalyzedespeciallywithregardstoexisting
theoryonthetopic(SeeTheoreticalFrameworkabove).
3.7CredibilityandAuthenticity
Thereisadegreeofsubjectivityinaqualitativestudyanditislikelythatthestudyhasbeen
affectedbytheinterviewee’sandtheinterviewer’ssubjectivity.Thereisalsoariskthatthe
intervieweemighttrytotakeintoaccounttheanswerstheythinkthattheinterviewerwants
togetoutofhim/herandthuschangehis/heranswersaccordingly.Thereisapossibilitythat
the study being conducted by a business school student could have influenced the
respondents.Althoughthequestionsweredesignednottobeleadingquestionsthereisalso
apossibilitythattheinterviewercouldhaveaskedquestionsthatwereperceivedasleading
whichcouldalsohavehadanimpactontheresults.
Validityandreliabilityaretwofactorsthataretypicallytaken intoaccounttomeasurethe
qualityofa study.Thedefinitionofvalidityaccording toKvale (1995) ishowwellonehas
measured that which one wants to measure. Reliability has tried to be achieved during
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interviewsbymakingsurethattheintervieweeunderstandsthepurposeoftheinterviewas
wellasunderstandsall thequestions thathe/she isasked.However, thestudycan lack in
reliabilityduetoeverchangingsocialcontext3(Bryman,2002).Nevertheless,Brymanpoints
outthatvalidityandreliabilityarebetterforjudgingaquantitativestudyandthatcredibility
andauthenticityaremoreappropriateforjudgingaqualitativestudy.
3.7.1Credibility
This study is credible in the sense that the dates of all interviews are shared in the
attachment, transparently documenting where the information comes from without
impeachingontheanonymityofcertainsubjects.Transcriptionswereobtainedbyrecording
alltheinterviews,enablingtheinterviewstobequoted.Themostrelevantquotesareused
in the empirical evidence section of the thesis to support the data.When collecting and
writingdowntheempiricalevidence,closeattentionwaspaidtosticktotheexactwordsof
theinterviewsinordertoavoidusingpersonal interpretationsthatmighthavebeenmade
duringtheinterviews.Thishasbeendoneinordertokeeptheempiricalevidenceanddata
asscientificandcredibleaspossible.
3.7.2Authenticity
Inordertomakesurethattheessayisauthentic,particularattentionhasbeenpaidtomake
sure to differentiate between factual data provided by the interviewee, and conjectures
formedby the interviewee andby asking the respondent to stick towhat they knowand
avoidguesswork.
3.8Ethicalconsiderations
BrymanandBell(2013)pointoutthatthereareaseveralethicalconsiderationsthatmustbe
accountedforwhenperformingaqualitativestudy.Theseethicalruleshavebeentakeninto
considerationinthemethodofthethesis.3Socialcontext:”referstotheimmediatephysicalandsocialsettinginwhichpeopleliveorinwhichsomethinghappensordevelops”(Bryman,2002)
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The first of these rules is the information requirementwhichmeans that the interviewer
must explain the point of the study to the respondent. A second rule is not to provide
misleadingorinaccurateinformationtotheinterviewee.Athirdruleisthattheparticipation
shallbevoluntary.Fourth, the informationshallonlybeused for this research.And lastly,
therespondentsshallbekeptanonymousiftheysodesire.
Alltheseruleshavebeenfollowedinthethesis.Withregardstotherespondent’sanonymity
it been respected in the cases where he/she wished to be anonymous. All interviewees
exceptonehadnoissuewiththeirnameorcompanynamebeingused.
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4.EmpiricalEvidence
Inthissection,Ipresenttheempiricalevidencecollectedinthe12interviewsof11Swedish
techcompanies.Thisevidence incombinationwiththetheoreticalframeworkallowsmeto
answertheresearchquestionofhowSwedishhigh-growthtechcompaniesmanagetorecruit
theamountofemployeesthattheyneed.
4.1Companies
Companydescriptions,informationonthecompanies’growthandotherdatapointscanbe
foundintheAppendix(See8.2).
4.2RecruitmentStrategyandProcesses
Advertisements, referrals and headhunting are the three main channels available for
recruiterstofindsuitablecandidates.
Therearesignificantdifferencesbetweentheinterviewedcompanies’useofadvertisements
asarecruitmentchannel.Advertisementsareusedbysomecompaniestodriveawareness.
AccordingtoDICE“weadvertisetoincreaseawarenessandwehavecampaignsforemployer
branding”.However,mostcompaniespointoutthatadvertisementsdonotattractthebest
quality applicants who are precisely the persons that the companies want to recruit. As
companyXstated“Throughadvertisementsandapplications,thereisn’t[much]quality,with
toomany applications for every candidate we employ”. Referrals on the other hand, are
used by almost all the companies and are much appreciated as they provide strong,
technicallyskilledcandidatesthatalsoareagoodculturalfit.King“weusereferralsasmuch
aswe can”, Tictail “When youwork inHRor recruitment you have to prioritize […] If you
don’thavethetimetodoeverything,youfocusonreferralsbecausetheyhavesuchagood
hit rate.”, Company X “Referrals are really good, people thatwork here are familiarwith
whatisneeded”.Klarnadescribesitsreferralsystemas“priceless”,andKingsaysthatthey
“rely on” referrals. Kambi would not say that referrals are the best channel, but that
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“candidates that come here [via referrals] already know a lot about us. They are already
excitedwhentheycomehereandwedon’thavetosellthecompanyasmuch.”
However, implementing a referral system is not always straightforward. For smaller
companiesaformalreferralsystemwilltakesometimetoimplementbecauseitrequiresa
minimum of structure, processes and rules to work. This does not mean that referral
systemsarenotinplace,butthattheyareinformal.Infact,networkingisacentralpartof
recruiting,includingforthesmallerstart-ups.
The thirdchannel for recruitment isheadhunting.Mostof the interviewedcompaniesuse
externalhelpbutopinionsdivergeonthevalueofexternalrecruitmentagencies. iZettle is
workingquiteaggressivelywithheadhunting.Accordingto iZettle,“recruitment inthetech
industry forces you to work proactively rather than just waiting for applications”. Spotify
explained that “we do use external parties in some cases.Whenwe feel thatwe need to
improve capacity.Maybe there is amarket thatwedon’t knowwell enoughandweneed
helptounderstand it.”Kambi,“A littlebitbefore I startedworkinghere,mostapplications
camethroughexternal recruitmentagencies”.Klarnastatedthat“therearemanydifferent
reasonswhywedo it. Itcouldbethatwehaveaworkloadthat is toobig[…]but inmany
casesitisaboutverynichedcompetenceswhenitisactuallymoreefficientforustotakein
externalhelp”.CompanyXexplainedthat“theaveragetimeforsourcingforeveryinterview
andcandidateisapproximately12hours[…]andsoIdon’thavetheresourcestofindallthe
candidates by myself”. Smaller companies like Anima and Tictail do not use external
recruitment agencies because “we can do a much better job in-house than by using
consultants”.
Headhunting is thus a good tool for proactive recruiting, finding candidates who are not
activelylookingforanewjob,aswellasforsearchingforveryspecificcompetences.
An interestingobservation is thatallof interviewedcompaniesbelieved that their current
recruitmentstrategyisoptimalfortheircompany.iZettlesaidthat“thisis,themostoptimal
(strategy). It is about being thorough but quick too”. Klarna believed that “we are very
efficientatwhatwedo.IfwecomparetootherfastgrowthcompaniesinSweden,wearea
23
smaller team working with recruitment and we are growing faster than the others”.
However,Klarnapointedoutthat“itworksforus,butIdon’tthinkitwouldworkverywell
forothers”,basedonthereasoningthatcompaniesarefundamentallydifferent.
Another interestingobservation is thatall thesecompaniesalsobelievethattheirstrategy
would probably only work for their own company. As Klarna stated “every company is
involvedinfundamentallydifferentareas”.Thecompaniesareindifferentstagesofgrowth
withdifferentnumbersofemployees.Althoughtheircurrentstrategiesmightbeconsidered
optimal today, there has previously been a significant portion of trial and error work
followed by an optimization of the recruitment strategy as the firms have grown, as
describedinthefollowingsection.
4.3EvolutionofRecruitmentStrategy
Alltheinterviewedcompanieshaveevolvedtheirrecruitmentprocesswiththeexceptionof
thesmallestcompanieslikeCryexandAnimawhicharetoorecently-foundedtohaveseen
anynoticeablechange.Spotify lackedanHRdepartmentand recruiters in itsearly stages,
“witharound100employees”.“Idon’tthinkthattherewasanofficialstrategyatthattime
(priorto100employees)”andwhenarecruiterwashiredinSpotify,he/shehadtodealwith
otherHRtasksaswell.HRstrategieshavebeenputinplaceonly“duringthelasttwoyears”.
Structure isanecessarypartofacompany’srecruitmentstrategyas itmaturesandgrows
intoalargercompany.Tictail,“Wehadaquiteaggressiverecruitmentperiodlastspringand
lastautumn[…]I’mhappythatweareslowingdownbecauseweneedtotakeabreak,we
needtomakesureteamsareefficient,weneedtomakesuretheyworktogetherandthat
they do the right things”, “Once these things are in place we can double the amount of
employeesagain[…]“butitisimportanttodothesethingsintherightorder”.NetEntagreed
mentioningthat“whenasmallcompanystartstogrow,differentrequirementsareneeded
[like]havingawellthought-outstructure,aplanforhowoneshouldreceivepeople”.iZettle
alsoagreedthatmorestructureisneededwhenacompanygrows.iZettle,“duetothefact
thatwearegrowing,wewill have tohavea certain typeof structure thatwasn’t needed
whenweweresmaller”.
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Some of the interviewees could observe a development of their respective company’s
recruitment processes compared with those in the early stages of the company. Spotify
explainedthat“thedevelopmentof therecruitmentprocesswent fromfiring fromthehip,
thenusingalotofhelpfromexternalrecruitmentagencies,totakingcareofthingsonour
own”.AsSpotifygrew,processesbecamemorecomplexbutalsomoreefficient.Klarnasaid
aswell that they“definitelyhaveadifferent recruitmentprocesscomparedtowhen[they]
started”.
Companies like Spotify and iZettle said that they are also working on improving their
recruitmentprocesses.Spotify,“Wearetryingtomakeitslimmerandmoreefficient”.iZettle
has developed a more rigorous screening session in order not to waste anybody’s time.
iZettle,“it isgoodtocheckoffcertainthings immediately.Because if they(thecandidates)
havetoohighofasalaryrequirementthenwewanttoknowasquicklyaspossiblesothatwe
can avoid going through the entire process and then not being able to come to an
agreement.”
Theempiricalevidenceshowsthatcompaniesarecontinuouslyupdating their recruitment
strategiestomakethemslimmerandmoreefficient,butwithalong-termviewinmind.To
be able to establish these new strategies companies establish more structure in HR and
recruitment.
4.4CandidateAttributes
Mostofthecompaniesshowedastrongdesiretorecruitthebestpeople.Itisimportantto
define what companies mean by ‘best’. ‘Best’ is these tech firms’ way of describing
technically talented persons, but also personswith a flexiblemindsetwho canwork in a
start-upenvironment.King’sCEORiccardoexplainedthat“onlytherightpeopleintheright
placecanmakethecompanygrow”.King,“Ouroverallapproach isobviouslytofind inthe
highest level the best people as quickly aswe can”, “only the best peopleworking at the
company”.Kambi,“Wehaveagoaltorecruitthebest.”DICEexplainsthat“thereisaquality
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focused culture”. DICE said that “if there is a basic talent and competence that is good
enoughthentheorganizationmakesroomforthatkindofperson.”
Tech companies require engineers, system developers, programmers and in general
technically skilled IT/tech specialists.NetEnt explained that it is extremely difficult to find
people in IT and all the interviewed companies mirrored Company X’s thoughts on the
subject: “Supply is very limited.Thereare some talentedones,buteverybodywants them.
Competitionisverytough.”iZettlebelievedthatitdependsabitonthetypeofcompanyyou
areandwhatdivisionyouworkin.“Itishardestonthetechside.That’swherecompetitionis
the fiercest”. NetEnt believes that “there is definitely [talent] in Sweden, but they are so
courtedthatthesepeoplesitwith10alternativesandit’sveryverydifficulttoreachthem.”
Kingexplainedthatnotonlyisthesupplyoftechpeoplequitelow,butitisalsoveryhardto
reachout to thesepeopleby traditionalmeans suchas LinkedIn. “Techpeoplearenotas
visible asmost other roles. Formost other roles you find candidates on LinkedIn, you can
sendtheman in-mailandoffyougo.Butmanytechpeopledon’tbotherwithLinkedInand
theyblockoutanytypeofadvancefromanybody.Sotheonlyrealwayofgettinggoodtech
peopleisthroughreferrals.”
Thelargerinterviewedcompanieshaveaninternationalviewonrecruitmentsincetheyhave
been forced to recruit talent internationally. Spotify stated that they cannot fill all their
positions only using talent in Sweden, NetEnt also found it hard to find all the necessary
people in Swedenand those theydo find in Swedenarenotnecessarily Swedish.NetEnt,
“WefindafewpeoplehereinStockholm.Manyespeciallywhodon’tspeakSwedishandthat
can’t finda jobbecause theycan’t speak the language.”Whenasked if therewasenough
competence in Sweden, Spotify answered, “Not in Sweden, not for all roles”. Kambi, “We
offer relocation packages to those that come from other parts of theworld […]We’re an
internationalfirm”.NetEnt“worksveryinternationallytoo,activelylookingforinternational
collaborations, recruitment partners, and always on the lookout for countrieswhere there
arehighlyeducatedpeople thatcouldbeprepared tomove”.Klarnasays that“itdoesnot
matterwhereintheworldthesepeopleare.Themostimportantthingistogetthemhere.
Thatiswhywehavesuchagoodsourcingteam[…],backedbyahumanservicesteamwhere
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we have a dedicated person working with relocation.” King, like Klarna, also works with
relocation in order to attract more international talent to their offices in Stockholm,
Barcelona,andLondon.
The smaller interviewed companies like iZettle and Cryex have until now found the
necessary talent that they need in Sweden. iZettle, “So far, we don’t need to recruit
internationally.Recruiting inSwedenisenough.”ButAnimaandTictailbothexplainedthat
even small companies like themselves have actually already started recruiting
internationally.
Theinterviewedcompanieslookforthemosttechnicallytalentedpeopleaswellaspeople
with the right fit for a start-up and high-growth firm, who are able to work in a flexible
environment.ThecompaniesfinditdifficulttofindallthepersonstheyneedinSwedenand
themajority of the larger companies also look for talent abroad. Smaller companieshave
smallerrecruitmentneedsandaremoresatisfiedwiththetalentpoolinSweden.
4.5Inspirationfromothercompanies
NetEntsaidthat“There’saconstantcoverageofthecompetition”.CompanyXrevealedthat
“Wekeepourearsopenonhowotherswork,whatisworkingwell,andlesswell,andwhat
onecandrawlessonsfrom”.DICEstated,“ofcourseweareinterestedbywhatourindustry
colleagues are doing, both here and internationally.” Klarna explained that companies
alwaysneedtobeontheirtoesandreadytoadapttochange.
Theinterviewedcompaniesallinspirethemselvesfrom,oratleastcomparethemselvesto,
their industry colleagues on a regular basis. The companies also adapt their strategies to
their specific structure and needs. However, when asked if the recruiters believe that
processesaresimilarbetweencompaniestheyall tendedtoagree.Thiscanbeduetothe
companies’ similarity in terms of industry and size, but perhaps also to a possible lack of
innovationinrecruitmentstrategies.
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4.6WorkDescriptions
Achallengeencounteredwithworkdescriptionswasthatonlyafewoftheintervieweeshad
beeninthecompanylongenoughtoobserveachangeinworkdescriptions.
Therewere nevertheless some interesting takeaways from the interviewswith regards to
workdescriptions.Oneofthese ishowflexiblerolesareattheserapidgrowthcompanies.
iZettleexplainedthattheir“workdescriptionsarequiteflexible.Inthissortofcompany,they
have to be.”DICE explains that “There are very rigid requirement for knowledge that one
needstohavebuttherolecanbeabitmoreflexible”.Kambialsoexplainsthat“wetrytobe
quiteopen,butthereisknowledgethatyouhavetohaveaswellastoolsandsystemsthat
youneedtoknow,andthat’sarequirement”.
Klarnastatedthatwe“can’tbetoopickywithsuchalowsupplyoftalent”.Klarnaexplained
that“[for)someroleswewanttoremainmoreopenbecausewedon’twanttomakeittoo
niched if we think that it can attract people from broader backgrounds”. In some cases
Klarnastatedthattheyknowexactlywhattheyneedandcanaffordtobeveryspecificwith
theirqualificationsandroledefinition.
DICE’s strategy with regards to work descriptions – having a high barrier of technical
requirements – has not changedmuch through the years as the companyhas grown and
developed.SpotifyandNetEnthoweverhaveobservedchanges intheirworkdescriptions.
Spotify,“Iwouldsaythatthey(thejobdescriptions)becomemorelimitedwhenthecompany
grows.”NetEntagreedthat“peoplebecomemorespecializedintheirroles,butatthesame
time the flow of information about these job descriptions and roles should still be
valid/working”.Ifthecommunicationisn’tworkingproblemscanarise,“whenthereafewer
peoplethentherearesomeresponsibilitiesthatcanbesharedamongseveralpeople.When
thecompanyislargerandgrowsthensomethingscanbeleftunattended.”
The smaller companies tend to havemore flexiblework descriptions. As companies grow
larger, these work descriptions get more well-defined and unadaptable but some of the
largercompaniesstilltrytokeeptheworkdescriptionsbroad.
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4.7Stagesinthecompany’sdevelopmentandemployerbranding
All interviewedcompaniessharetheirfastgrowthincommon(exceptforCryexandAnima
whicharetoorecently-foundedtohaveexperiencedanysubstantialgrowth).
Thissectionhighlightscommonproblemsandobservationswhenaskedaboutstagesinthe
company’sdevelopmentandhowthishasimpactedrecruitment.Ananalysisontheimpact
ofbrandawarenessonrecruitmentisalsoincluded.
WithregardstoemployerbrandingSpotifyisacompanythathas“succeededinestablishing
astrongbrand–insomemarkets.Onothers[Spotify]isnearlyunknownexcepttoindustry
peopleandthelike”.OnereasonSpotify’sbrandissowellknown,accordingtothem,isthat
itis“easierifonehasabrandthatisassociatedwithsomething.Thesexinessoftheproduct
isimportant.”SpotifyisalsooperatingintheBusiness-To-Consumermarket,addressingthe
whole population of each geographical market that they target. NetEnt, which is also
growing very quickly, believes there is a “challenge to reach out with employer branding
whenthecompanyworkswithBusiness-to-Businesswhichimpliesthatwedon’tbecomeso
wellknowntothewiderpublic.Wealsoworkwithincasinoswhich isalsoan industrythat
not everybody can relate to.” King has experienced issues with both their brand and the
industrybrand,butexplainedthattheirbrandhasimprovedenormouslythroughsignificant
investmentsthroughcareersitesandevents.
NetEntareforcedtofindotherwaysofbuildingtheiremployerbrandinordertogainmore
interestfrompotentialfutureemployees.IncomparisonSpotify,withtheirstrongconsumer
brand,andeveniZettle,thatalsohasastrongbrand,receiveplentyofapplicationswithouta
comparableeffort.iZettle’srecruitersaidthat“Wehavesuchastrongbrandandaresucha
hotcompanythatweareluckyenoughtogetsomanyapplicationsviaadvertisements.Itis
verynice”.However,evencompaniessuchasCompanyXthathavea“quitestrongbrand,
and good processes” are struggling with recruitment which implies that there ismore to
recruitmentthanjustemployerbranding.
29
A larger size andmore defined processes can be unattractive for prospective candidates.
Kingexplainedthat“Therearepeoplewhodon’twanttoworkforacompanythissizeany
more”.Kinghastriedtokeepastart-up/smallcompanyfeelingbydividingthecompanyinto
smaller offices around Europewith smaller teams, instead of placing everyone under the
sameroof.“We’reopeningnewlocationssothatwe’respreadingpeople,sowe’renotallin
onebigbuildingfor instance.Thathelpspeoplefeeltoanextentthatthey’restillpartofa
smallishcompany.”Kingalsomentionedthatbeingabigcompanywiththesortofimpacta
big companyhas on its customers is very attractive for prospective talents.DICE has also
encounteredtheabovementionedproblemwithregardsto itssize. Ithasmoreprocesses
than“indiegamecompanies”butlessprocessesthanlargertechcompanies.iZettleisstilla
smallercompanyandhasmanagedtoattracttalentfromlargerSwedishcompaniesbecause
it has less processes, less bureaucracy and less middle managers. Tictail thinks that it is
actuallyveryhardforacompanytokeepthesamedynamicandentrepreneurialcultureasa
companygrowswithseveralculturalaspectsofasmallerstart-updisappearingas itgrows
intoalargercompany.
Tosummarisethissectionthe interviewedcompaniesworkhardontheiremployerbrand,
which includes targeted work to keep a “start-up” culture in the company. This is
increasinglydifficultasacompanygrowsandbecomesmoreformalinitswaysofworking,
rules and processes. Some of the interviewed companies try to prevent this by creating
smallerteamsandsplittinguplargersitesandteamsintosmallersitesandteams.
4.8Summaryoftheempiricalevidence
There is a beliefwithin all of the interviewed companies that they all have a recruitment
strategyandprocessesinplacewhichareoptimalforthespecificcompany.Thefactthatall
of thesecompanieshavebeenverysuccessful in termsofcompanygrowthsupports their
statement.However,thispathtosuccesshasnotbeensmoothasthecompanieshavegone
through stages of trial and error to find out what works and does not work, and have
adaptedtheirrecruitmentstrategies.
30
Manythemesandwaysofworkingareincommonbetweenthecompanies.Firstofall,using
a mix of recruitment channels but with a preference for referrals and advertisements.
Secondly, internationalrecruitment isusedtoextendthesearchforthebestcandidates in
thelargerstart-ups.Reachingouttotechpeopleisdifficultandreferralsareoneofthebest
ways to contact them, but sometimes a lack of internal bandwidth makes it easier to
outsourcesomepartsofrecruiting.Recruitingisverycompetitiveforhigh-growthtechstart-
ups, and recruiters andHRmanagers keepa vigilant eyeonpeers and competitorswhich
leadstosimilarrecruitmentstrategiesandprocessesacrossseveralstart-ups.Oneofthese
strategies is to have broader work descriptions but withmore specific requirements and
qualifications. Lastly, as companies grow, there ismore structure and organization,which
leads to faster processes and more effective recruiting, but which also leads to more
impersonalityandapotential lossofthestart-upculture.Companieshavetoworkhardto
maintainastart-upbrandimageinordertocontinuetoattractthebestcandidates.
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5.Analysis
Inthischapterweestablishamodelforrecruitmentinhigh-growthSwedishtechcompanies,
andcomparethismodeltoboththeempiricalevidenceandtothetheoreticalframework.
The model provides an answer to how Swedish high-growth tech companies manage to
recruittheamountofemployeesthattheyneed.
5.1ModelforRecruitmentinSwedishHigh-growthTechCompanies
Amodel for recruitment in Swedish high-growth tech companies has been formed in the
thesis which explains how start-ups should act with regards to recruitment in order to
achievesustainablegrowth.Thecoreelementsofthismodelandtheirrespectivebenefitare
describedinthissection.
The model is based on best practices from either the theoretical framework and/or the
empirical evidence. In some cases, the model is fully aligned with both theory and the
empirical evidence, in others only with the empirical evidence across most interviewed
companiesandinafewcasesonlywiththeempiricalevidenceinsomeoftheinterviewed
companies.
Themodelisbasedonthefactthatstart-upsseesignificantvalueindefiningarecruitment
strategy as a part of their overall Human ResourceManagement strategy. Recruitment is
clearlyoneofthemostimportantHRtasksacrosstheearlystagesofstart-upcompanies.
One of the first steps in such a strategy is to hire an HR specialist with recruitment
experienceandresponsibility,orpossiblyevenafull-timerecruitmentspecialist.Thisperson
needs to have recruitment experience from other start-ups in order to define a tailored
recruitment strategy for the company. Usually tech entrepreneurs do not have HR or
recruitment competence and need guidance with regards to HR in order to apply best
practicesandavoidunnecessarymistakes.
32
Companiesshouldadjusttheirrecruitmentstrategyandprocessessothatitisthebestfitfor
thecompanybasedonthecompany’spositioning,objectivesandstrategy.Inspirationfrom
othercompaniesisaverygoodideabutacopy&pasteistypicallynotaviableoptiongiven
thespecificrequirementsofeachcompany.Anotherimportantaspectforthecompanyisto
keeptherecruitmentstrategyflexibleinordertoadaptthewaysofworkingwheneverthisis
required.
As the company grows, the HR department needs to incorporate more formality and
structure.All interviewedcompaniesconfirmthattheyhavetobecomemoreformal/ less
informalastheygrow.
However, this really should not go against one of the best selling points to potential
candidateswhichisthestart-upworkculturedefinedbyindependence,empowermentand
arelative lackofrulesandprocesses.Start-upsshouldstrivetokeepthesecharacteristics,
even when they growmuch larger. Talent acquisition is already hard due to the lack of
supply, so there is no point in making it even harder by making the company more
traditional.
The start-up feeling is strongly linked to the companies’ respectiveemployerbrandwhich
representsasignificantpartinthemodel.Companiesmusttakegoodcareoftheiremployer
brandandofhowtoimproveit.Acompanycandeveloptheemployerbrandbyorganizing
events and communications. King.com is an inspiring example – they recently released a
video showing their new Stockholm office, demonstrating both the office and how the
company’s ways of working resemble a start-up. And yet, King.com with their 1,400
employeesisalistedcompanyandoneoftheleadingtechcompaniesintheworld.
So, althoughwe stated that companies aremoving towards formality and structure, they
shouldtrytoavoidimpersonalityatallcost.Oncemore,wecanlooktoKing.com’spractices.
Kinghasmadesuretocontinuouslysplitgrowingteamsintosmallerandindependentteams
(or“studios”asKingcallthem).
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Withregardstothespecificrecruitmentchannelstobeused,thereareargumentsforand
againstallofthem.Themodelshowsthatthepreferablewayofworkingisamixofdifferent
channels.Advertisingisvitalduetotheimportanceofemployerbranding.Butreferralsare
an effective and cheaperway of finding candidates. Balancing cost and benefits, external
recruitmentdoesnotseemtobethebestchannelforsmallercompaniesbutinsomecases
largerfirmscanreallybenefitfromexternalrecruitmentservices.
Asastart-upgrowslarger,abestpracticeistoestablishasearchteamwithinthecompany.
Klarna is a good example with their small but highly capable internal sourcing and even
relocation team. A key strength of this approach consists of the internal search teams’
capabilityinunderstandingandqualifyingtherequirementsofopenpositions.
It isessentialtolookabroadfortalentwhichissomethingpracticedbyall largerstart-ups.
Theyshouldnotandcannotlimitthemselvestoonlyonecountrywhentheywanttoattract
thebestpeople.
And finally an aspect that should be avoided ismakingwork descriptions too specific. To
attract the best candidates, both the empirical evidence and theory infer that companies
shouldusebroaderjobdescriptionsspecifyingthemostessentialtechnicalskills.
Themodelencompassesamixofalltheseninefactors.Ahighgrowthfirmshould:
1. EstablishanHRdivision,includingsomebodyresponsibleforrecruitmentearly.
2. EstablishanHRand recruitment strategy, specifically adapted to the companyand
evolve it in linewiththecompany’sdevelopment.Get inspiration fromotherstart-
ups.
3. Avoid bureaucracy while still establishing structure and rules. This can be
accomplishedbykeepingteamsandofficessmall,insteadofalargeinonehub.
4. Use a mix of the recruitment channels, but mostly referrals complemented by
advertisements.Referralsshouldnotbecompensated.
5. Avoid outsourcing recruitment to agencies as a smaller company and instead
establishsearchteamswithinthecompany.
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6. Lookfortalentinternationally.Hirethebestpeople,regardlessofwhethertheyare
abroadorathome.
7. Advertisetobuildtheemployerbrand.Advertisingismoreeffectiveasanemployer
brandtoolthanforrecruitment.
8. Trytokeepa‘start-upculture’withinthecompany.
9. Usebroadworkdescriptionstoattractmoretalent.
Figure3:Modelforsustainablegrowth
SustainableGrowth
Hirerecruitmentspecialist EstablishHR
&RecruitmentStrategy
Morestructureand
rules
Tailoredrecruitmentstrategy,
emphasisonreferrals
InternalRecruitmentandSourcing
Internationalrecruiting
BuildEmployerBrand
Startupculture
Broadworkdescriptions
35
5.2Comparisonofthemodeltotheoryandtheempiricalevidence
This section compares the above model with the empirical evidence and the theoretical
framework.
5.2.1Hirearecruitmentspecialist
Galbraith(1985)explainsthateverystart-upbeginswithahandfulofpeopleandaninformal
organizationmanagedbyface-to-faceinteraction,andasthecompanygrows,changestake
place and formal HR departments are created. According to Heneman et al (2008) and
BarrettandMayson(2008),high-growthcompaniesareforcedtochangethewaytheywork
withHRandrecruitmentastheygrow.
Alltheinterviewedcompanieswithmorethan100employeeshaveestablishedaformalHR
department.HRandRecruitmentspecialistsarehiredoncethecompanyhasstartedtogrow
quicklyandthecompanycannotavoidhavingthemanylonger.
In addition to theory and contrary to most of the empirical evidence, the model
recommendsaccelerating thedecision tohireapersonwith recruitment competenceand
experiencefromotherstart-ups.Withrecruitmentbeingsocriticaltoastart-up,andstart-
ups with a recruitment manager on board being so clearly in control and reaping the
benefits from a customised recruitment strategy, smaller start-ups would benefit greatly
from bringing a recruitment specialist on-board earlier. Tictail appears to be the only
companyacrossallinterviewedcompaniesthattookthisdecisionveryearly.
5.2.2EstablishHR&RecruitmentStrategy
Asdescribedinthechapteronthetheoreticalframework,Rutherfordetal.(2003)aswellas
Barrett and Mayson (2006) recommend companies to establish HR and Recruitment
strategiesinordertoachievesustainablegrowth.
36
The empirical evidence confirms the theory, with practically all companies except the
smalleststart-upshavingdefinedaclearrecruitmentstrategy.
Themodelisthereforefullyinlinewithboththetheoryandtheempiricalevidenceonthis
point.
5.2.3Tailoredrecruitmentstrategy,butwithanemphasisonreferrals
Themodelalsohighlights the importanceofhavinga tailoredrecruitmentstrategy. In this
case the model is based on both the empirical evidence and the theoretical framework.
Companies shouldchange their recruitmentstrategy inorder to tailor it to thecompany’s
evolvingprofileintermsofthecompany’sindustry,theirbusinessarea,aswellas‘intime’,
tailoredtothestagetheyarein,growth-wise.
Severalstudies(Clevelandetal.,1989;Jacksonetal.,1989;Saarietal1988)foundthatHR
strategies vary as a function of industry, business strategy, technology and organizational
structure, and suggest that HR strategies need to be tailored to the strategy, structure,
processandpeopleintheorganization(LawlerIII,1996;Henemanetal,2008).Researchby
Cleveland,Jackson,Saarietal.suggeststhatseveralaspectsofcompanies’HRstrategiesvary
asafunctionoftheorganizationalstructure.
Theempiricalevidenceisinlinewiththesestudies.Theinterviewedcompaniesbelievethat
their recruitment strategy works only for them “because every company is different” as
stated by Company X. Klarna explains that there are very unique things that Klarna does
whichmakes itharderoreasier for themto implementandsupervisecertain recruitment
processes that appear to beworking verywell at another company.What the companies
defineasanoptimalstrategywouldnotbeoptimalforothercompanies.Theinterviewees
alsoexplainedthattheirrespectivecompanyisalwayschanging.
Inthecaseofreferrals,themodeladvocatestheuseofreferralsasarecruitmentchannelfor
high-growthcompanies.Themodelisinthiscasebasedonthepraisereferralshavereceived
fromboth theory and the interviewed companies. Referrals are highlighted as one of the
37
bestwaysofworkingforallsortsofcompanies,butperhapsmore importantly forsmaller
firmsthatdonothavemanyotherchoices.
Theorystates that referralsareveryuseful foranykindofcompany (BohlanderandSnell,
2013;MondyandMondy,2013),largelyduetothefactthatthequalityofreferralsismuch
higher thanother channels andalso reducesemployee turnover (Shuit, 2006;Mondyand
Mondy,2013.
The empirical evidence showsus that the quality of employee-referred applicants is high.
Manyfirmsactivelyprioritizereferredapplicantsbecauseoftheapparentfactthatreferred
employees tend to have a better cultural and technical fit to the profile required by the
company.However, referralsarenot thewaymost jobpositionsare filled.Forcompanies
withastrongeremployerbrand,advertisementsdrawalargenumbersofapplications,and
for companies with a need for very specific technical expertise – which applies to the
majorityoftheinterviewedfirms-headhuntingplaysanimportantrole.
Insummary,themodelconformstotheoryandtheempiricalevidencewithregardstothe
needofatailoredrecruitmentstrategyaswellasthequalityofreferrals.
5.2.4BuildEmployerBrand
Concerning the employer brand, the model bases itself on a mix of theory and best
practices, but is more inspired by the empirical evidence. Of particular significance are
companies such as Kambi that have shown the importance of advertising for employer
branding.
Theemployerbrandisparticularlyimportantsinceitinfluencesallrecruitmentchannels.Ifa
brand is lesswell known, itwill beharder for a recruitment agency tomatchprospective
candidates with the firm since candidates typically want to work with a brand that they
know.Morework on the employer brand has to be donewithin B2B firms or firms that
operate in less-known markets, such as the casino industry, while on the other hand,
38
companies working in B2C markets, like Spotify, do not need to sell themselves to
candidatesasmuch.
On this point, the model goes beyond theory which recommends advertising mainly for
recruitment,andinsteadinspiresitselffromthebestpracticesoftheempiricalevidenceto
useadvertisingtodeveloptheEmployerBrand.
5.2.5InternalRecruitmentandSourcing
ThereisatrendintheempiricalevidencewherebySwedishtechcompaniesmakelessuseof
externalrecruitersandinsteaddevelopin-housesearchteams.
Theoryexplainsthatthequalityofagenciescanvaryandthatitisvitaltofindanagencythat
fitsthecompany’sneedsthebest.Butthesituationisactuallyworsethanthataccordingto
theempiricalevidence.
All of the interviewed companies that use external recruitment agencies explain that the
quality isusuallysubpar.Applicationsareonlyuseful insomerarecaseswherecompanies
haveworkedcloselywitharecruitmentagencyforalongerperiodoftimeandestablished
goodcommunicationandrelationshipswiththeagency.Externalagencieshaveahardtime
finding the right fit for the company, and in particular in recruiting tech people. In an
industrywhere the technical competencyof a candidateplays suchamajor role, it is not
surprising that external recruiters have such a difficulty understanding exactly what their
clientsneed.Themodelrecommendsusingexternalrecruitmentagenciesasacomplement
forlargercompaniesbutnotforsmallercompanieswhichshouldusebetterchannels.
Externalagenciescanbeputincontrastwithin-housesearchandrecruitmentteamswhich
naturally get to know the company and the teams really well and whose only task is to
recruit in the tech sector. Klarna isoneof the companies thathasbuilt a strong in-house
teamstohandlerecruiting-theteamevenincludesarelocationexpert.Themodelstrongly
recommends the approach of building an internal recruitment early on in a company’s
development.Themodeldoesnotdisregardtheoryandactuallymakesaconcessionthatin
39
somecases(larger,moreestablishedcompanieswithalongrelationwithexternalagencies)
externalrecruitmentcanbeverybeneficial.
5.2.6Internationalrecruitment
Oneofthemodel’skeypartsisinternationalrecruiting.Thereisagreatvalueinlookingfor
talentinternationallyforSwedishcompanies.Thisbeliefisbasedontheempiricalevidence
that Sweden has a limited supply of talent and firmsmust adapt to their situation.With
international recruitment there is the added bonus of diversity which is also something
pursuedbyalltheinterviewedcompanies.
Theempiricaldataidentifiesanotherpointthatisnotincludedinthetheoreticalframework.
The interviewed companies all said that they want people who are a good cultural and
personality fit to the company, but a recurring theme is that they want to find the best
peopleandtalent.Kambiforexampletalksaboutrecruiting“worldclass”people.Thereisa
significant demand for these technically talented people and they are in a relatively low
supply.RecruitinginternationallyisseenasamustforlargerSwedishtechcompanies.
Onthispoint, themodelgoesbeyondtheoryand inspires itself fromthebestpracticesof
theempiricalevidence.
5.2.7Morestructureandrules
Withregardstoformalityandstructurethemodelarguesthatcompaniesneedtoestablish
structure and rules as they grow. This is particularly important for high-growth firms. The
importanceofstructureishighlightedbyboththetheoryandtheempiricalevidenceandso
thisfactorinthemodelisduetoamixofboth.
Thetheoryconcludesthatmoreformalizationisneededforsustainablegrowth(Barrettand
Mayson, 2006; Galbraith, 1985; Greiner, 1972). Rutherford, Buller, and McMullen (2003)
explain that formalization and the development of systems provide a platform in which
sustainablegrowthcanoccur.
40
Theempiricalevidenceconfirmsthatthereisamovetowardsbothformalityandstructure
as smaller start-upsgrow larger.As thenumberofemployeesgrows, the structurewitha
bare minimum of rules, regulations and processes becomes more detailed and defined.
iZettle,Klarna,andevensmallercompanieslikeTictail,pointoutthattheyhavetoworkwith
morestructuredprocessesinordertobeabletogrowinacontrolledandsustainableway.
Tictail talked of pausing their recruitment in order to give them time to establish more
structure, and re-starting recruitments thereafter. Spotify becamemorebureaucratic as it
grewandespeciallyafteritsexternalrecruitmentofmiddlemanagementwhichledtosome
staffleavingcompanieslikeSpotifyorKlarnatoworkforsmallerfirmssuchasiZettle,who
thereby profit from their relative lack of processes and structure. Some of the larger
companiesaddress this challengeof sizeand impersonalityby creating smaller teamsand
spreadingthemselvesovertheadditionalsites.
Themodel is aligned to both theory and the empirical evidencewith regards to both the
importance of structure and formality as a vital part of a company’s growth and of
maintaining an informal culture in the company to attract more talent. The key here is
managingtobalancetheinformal,start-upculture,withsomeformalityandstructure.
5.2.8Start-upculture
Themodel suggests thathigh-growth firms should strive to keepa start-up culturewithin
the company because it is a greatway, togetherwith a strong andwell-known employer
brand,toattractmorepeople.
Theorydoesnotpaymuchattentiontotheimportanceofmaintainingastart-upculture.
The best practices of someof the interviewed companies show that trying to sustain the
start-up culture is an integral part of the companies’ strategies. The interviewed tech
companiesallexpressadesireforasocial,openworkingenvironment.Tictail,CompanyX,
andCryexaregoodexamplesofcompanieswithaninformalorganizationwhereemployees
workcloselytogetherinlooseandinformalnetworks.Somecompanies,suchasKing,work
41
hardtokeepaculturewithmore likenesstoastart-upthantoa largepubliccompany. In
KingHRactivelyworkstoensurethatthe“start-up”feelingremains,i.e.thefeelingofhaving
aninformalorganizationandonlyworkinginasmallteam.
Thispartofthemodelisthusbasedonbestpracticesofthefirms.
5.2.9Broadworkdescriptions
Althoughworkdescriptionsbecomemorespecificasacompanygrowsaccordingtomostof
theempiricalevidence,firmsshouldstrivetokeepworkdescriptionsasbroadandflexibleas
possible.Thetheoretical frameworkexplainsthat jobdescriptionsare lessdefined inhigh-
growthcompanies.
Henemanetal(2008)explainthatjobdescriptionsarelessdefinedinvisionaryhighgrowth
companies. The empirical evidence shows that in some larger companies, such as Spotify
andNetEnt, jobdescriptionswhichoncewerebroadlydefinedarenow significantlymore
well-definedandspecific.Inthesmallercompaniesjobdescriptionsaremostlyveryflexible,
motivatedbytheirincreasedabilitytoattractawiderpooloftalent.Thesepotentialtalents
mightbeputoffbytoospecifictasksandrequirements.
Thusthemodelclaimsthatcompaniesshouldtrytohavebroaderworkdescriptionsinorder
toattractmorepotentialcandidates.
42
6.Discussion
InthissectionIdiscusstheresultsandtheir implications.Theyareputintocontextandare
criticallydiscussedinordertodeterminetheirreliability.
6.1ResultofthestudyandpracticalconsequencesforCompanyandHRManagers
Theoutcomeofthisthesisisamodelthatdescribesninebestpracticesforrecruitmentfor
high-growth tech firms. This model has been created by enhancing the theoretical
frameworkon recruitment inhigh-growth firms.Thepracticalapplicabilityof themodel is
themainbenefit,contrastingtoamoredescriptivepurposeofotherstudies.
Listedbelowarethekeytakeawaysfromtheproposedmodel.Akeytakeawayforcompany
managers andHRmanagers in tech start-ups is the importanceof assigning somebody to
recruitment early in a company’s development. As soon as a start-up company starts to
growrecruitingisthemostimportantHRtasktofocusonandinvestresourcesin.Managers
should not shy away from establishing some structure and processes in a start-up even
thoughtheyconsiderthatthisgoesagainsttheircorevalues.Thisstudyshowsthatworking
ad hoc will not suffice in order to achieve sustainable growth. With companies evolving
rapidlyanotherkeyfactorforsuccessistheimportanceofalwaysbeingreadytoupdatethe
recruiting strategy. There is no right or wrong with regards to using certain channels.
Referrals can be recommended for companies with a smaller budget, but a mix of the
differentrecruitingchannelsisnecessarytoreachouttothemosttalent.
6.2Evaluationoftheresultsvis-à-visthemethod
Theresultsofthestudymustbeevaluatedinrelationtothechosenmethodaswellastoits
actualexecution.
The choice of using an explorative method and performing qualitative, semi-structured
interviews givesmore objectivity and reliability to the interviewees’ responses. However,
interviewswithmorepersonsineachcompanywouldhaveallowedmetobetterjudgethe
43
objectivity of the provided answers. Given its reliability the choice of working with an
abductivemethodwas the best fit for this sort of study. But secondary datawhich could
havebeengatheredthroughasurvey,wouldneverthelesshaveprovidedmorereliabilityto
thethesis.Someofthedatacollectedthroughtheinterviewsisincompleteinthesensethat
severalrespondentswereunabletoprovideadetaileddescriptionoftheevolutionoftheir
company’srecruitmentstrategybecausetheyhadonlyworkedforthecompanyforashort
time.
Another criticism of this study is the relatively small sample size of companies. The
companiesthatagreedtobeinterviewedabouttheirrecruitmentstrategiesweretheones
witharecruitmentstrategy.Someofthecompaniesthatwerereachedouttodeclineddue
to their lack of a recruitment strategy. This is not amajor problem in itself, because the
objective of the thesis is to understand best practices and not to describe the state of
recruitmentinSwedishhighgrowthtechcompanies.
6.3Suggestionsforfurtherresearch
ThemodelthatwascreatedisbasedonarelativelysmallsamplesizedstudyofSwedishtech
companiesinStockholm(andMalmöforAnima).Inordertobetterjudgethevalidityofthe
study itwouldbethereforebenecessary toperformfurtherstudiesonotherhighgrowth
firmsinothercountries,especiallyincountrieswithatrackrecordofhigh-growthtechstart-
ups.
An additional take-away from the interviews is the use ofmetrics in the tech companies.
Mostemployeesattheinterviewedcompanieshaveatechnicalbackgroundandappreciate
thatrecruitingdepartmentsinthestart-upscommunicatewiththemthroughstatisticsand
othermetrics.Thefindingsarethatallinterviewedcompaniesbelieveintheuseofmetrics
tobeabletoimproverecruitmentstrategiesandprocesses.Thisisactuallycontrarytosome
otherstudies(e.g.CIPDRecruitment,RetentionandTurnoverSurvey2009).
44
7.Conclusion
7.1AnswertotheResearchQuestion
Inthethesis,bestpracticesforrecruitmentinhighgrowthfirmshavetriedtobeidentified
withafocusonthefollowingresearchquestion:
Howdohigh-growthSwedish techcompaniesmanage to recruit theamountofemployees
thattheyneed?
The question has been answered through a review of applicable theory and an empirical
study of eleven high-growth tech companies in Sweden and has led to the creation of a
model(see5.1)includingninerecruitmentbestpractices.
Whathasmadethisthesisparticularlyinterestingisthattheinterviewedcompaniesdonot
addressrecruitmentinthesameway.Insomeareastherearehighlysimilarviewsandways
onrecruitment,butinseveralothersthecompanieshaveverycontrastingopinions.
Several factors impact a tech start-up’s recruitment. One of the most, if not the most,
important factors to being able to successfully recruit the number of employees that a
companyneedsisthroughtheearlyestablishmentofaHRandrecruitmentstrategy.Andthe
bestwaytodothisistohirearecruitmentspecialistwithexperiencefromotherstart-ups.
Asthestart-upcompaniesgrow,sevenadditionalbestpracticesaretouseamixofreferrals,
headhuntingandads,touseadstoreinforcetheemployerbranding,toestablishaninternal
search team, to recruit internationally, toestablishmorestructureandprocesses, tokeep
work descriptions broad instead of too specific and detailed and to actively work on
maintainingthecompany’sstart-upculture.
By following these best practices tech start-ups have a much better chance to achieve
sustainablegrowth.
45
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8.Appendix
8.1RespondentGuide
Company Title InterviewMethod Date
CompanyX Recruiter Face-to-face 12/04/2016
Cryex CEO Face-to-face 18/04/2016
DICE HRManager Face-to-face 04/04/2016
iZettle TechRecruiter Face-to-face 18/03/2016
Kambi TechRecruiter Face-to-face 25/04/2016
King.com CEO TelephoneInterview 06/04/2016
King.com HeadofRecruiting TelephoneInterview 20/04/2016
Klarna DeliveryLead Face-to-face 14/03/2016
NetEnt Recruiter Face-to-face 09/03/2016
Spotify HRBusinessPartner Face-to-face 03/03/2016
Tictail Recruiter Face-to-face 16/03/2016
Anima COO TelephoneInterview 02/05/2016
Twopilot interviewswithspecialistswereconductedpriortothegatheringofdataforthe
thesisinordertovalidatewhichquestionscouldbeasked.Thetwointervieweeswereanex-
CEOofaSwedishtechunicornandafoundingpartnerofaSwedishInvestmentfirmfocused
exclusivelyonNordictechcompanies.Theseinterviewshelpedrefinetheresearchquestion
andimprovetheinterviewguide.
Outof the12 interviewees,10weremen.The intervieweeswere in theirearly thirties for
the most part, and relatively new to their positions/roles in the company as mentioned
earlier. The fact that the intervieweeswere new to the company could havemade them
more inclined to have slightly different views on recruitment strategy compared to the
company’spreviouspolicies.ThemajorityoftherespondentsinHRorRecruitmentroleshad
a university education in human relations or in social studies. Many of them also had
previouslyworkedatrecruitmentagencies.Additionally,mostoftherecruiterswerefocused
onlyonrecruitingfortechnicalpositionsatthecompany.
50
Theinterviewsconductedfortheempiricalevidencewereofapproximately60minuteseach
andwereforthemostpartconductedinpersonatthecompanies’respectiveoffices,with
theexceptionof King.comwhere the two interviewswere carriedoutbyphone. The two
interviewswithKing.comwereinEnglishwithallotherinterviewsinSwedish.
8.2CompanyGuide
DatagatheredfromCompanyannualreportsaswellasfromRetriever.
Spotify
Spotify is a Swedish private company that offers a music streaming service. Spotify was
foundedinApril2006byDanielEkandMartinLorentzon.
2014 2013 2012 2011 2010
Revenue 9393845 5193330 2995697 1108431 172296EBIT -730418 -939947 -522846 -292613 49488NetIncome -818628 -902379 -444822 -300438 45468TotalAssets 8073753 2482276 2420618 1846265 548510NetMargin(%) -9,6 -17,38 -16,01 -27,2 30LiquidityRatio(%) 113,43 181,84 149,72 76,63 1894,45EquityRatio(%) 20,59 52,22 46,89 46,99 94,74Employees 627 469 317 177 96
Klarna
KlarnaisaSwedishcompanyfoundedin2005bySebastianSiemiatkowski,NiklasAdalberth,
andVictorJacobsson.Klarnasimplifiesonlinepayments.Klarna’smainbusinessistoassume
stores’claimsandhandlecustomerpayments,thusfacilitatingtheprocessforbothbuyers
andsellers.
2014 2013 2012 2011 2010
Revenue 2192703 1573993 1177964 751177 356009EBIT 101441 66808 31639 68433 35101NetIncome 75424 54126 23973 50945 25660TotalAssets 7195222 4624230 3626653 2912202 1585342NetMargin(%) 4,64 4,25 2,7 9,14 9,87
51
LiquidityRatio(%) 112,87 117,6 123,66 122,54 136,44EquityRatio(%) 27,75 18 21,47 18,8 13,1Employees 1017 778 672 429 246
iZettle
iZettleisacompanybasedinSwedenthathasdevelopedanappandcardreadersformobile
payments.iZettlewasfoundedbyJacobdeGeerandMagnusNilssonin2010.
2014 2013 2012 2011 2010
Revenue 190435 51505 11150 628 0EBIT -228093 -157642 -108130 -26545 -1882NetIncome -197632 -156367 -109275 -26014 -1882TotalAssets 378210 190673 228437 71661 18889NetMargin(%) -103,91 -303,32 -948,99 -4137,58 0LiquidityRatio(%) 330,89 150,87 604,49 1117,97 1236,87EquityRatio(%) 77,63 45,74 84,97 92,18 93,17Employees 167 115 65 13 2
Kambi
KambiisasportsbettingcompanythatwasapartofUnibetGroup.In2014theKambishare
startedtradingontheNASDAQOMXStockholmFirstNorth.
2014 2013 2012 2011 2010
Revenue 127375 117982 107333 87481 0EBIT 7634 6910 6417 7966 -531NetIncome 6793 7346 3020 5927 -533TotalAssets 44953 36826 34030 23073 1349NetMargin(%) 6,91 6,59 5,99 9,09 0LiquidityRatio(%) 179,67 148,79 127,04 104,41 11740EquityRatio(%) 52,04 44,41 30,59 25,95 4,52Employees 93 81 66 54 0
52
NetEnt
NetEnt is a supplier of digitally distributed gaming systems to online casino operators.
NetEntwasfoundedin1996.
2014 2013 2012 2011 2010
Revenue 1132425 851663 630746 526671 427618EBIT 401611 261665 179748 153057 129713NetIncome 373992 243242 167139 133255 115614TotalAssets 964742 804009 532885 551821 442418NetMargin(%) 35,71 31,28 29,05 28,78 30,22LiquidityRatio(%) 284,12 212,55 190,34 132,01 126,62EquityRatio(%) 74,03 67,93 71,43 52,29 53,79Employees 409 401 328 257 220
DICE
DICEisaSwedishvideogamedeveloper.EADigitalIllusionsCEAB,orDICE,wasfoundedin
1992,andwasboughtbyElectronicArts,Inc.in2006.
2015 2014 2013 2012 2011 2010
Revenue 917338 798936 642451 535338 379112 359377EBIT 67591 58468 46721 39147 27488 26279NetIncome 50583 36164 -34598 24711 25990 19185TotalAssets 380672 368302 295933 261996 244930 212944NetMargin(%) 7,23 7,4 1,12 7,62 7,48 7,41LiquidityRatio(%) 100,64 128,12 108,97 154,18 189,11 200,64EquityRatio(%) 16,13 30,09 25,23 41,71 50,85 54,44Employees 560 560 518 323 237 250
Tictail
Tictailisaplatformwhereindependentbrandscancreatetheirownonlineshop.Tictailwas
foundedin2012byKajDrobin,SiavashGhorbani,BirkNilsson,andCarlWaldekranz.
2014 2013 2012
Revenue 9021 2749 1398EBIT -6426 -4383 -1771
53
NetIncome -6432 -4273 -1729TotalAssets 16349 10895 9757NetMargin(%) -811,1 -205,83 -171,19LiquidityRatio(%) 164,05 917,14 1567,27EquityRatio(%) 86,89 45,27 94,34Employees 25 9 5
CompanyX
CompanyX is a Swedish technology company thathasdevelopeda very successful client.
Foundedpriorto2010andhasmorethan60peopleinthecompany.
Companyinformationandnumbershavebeenomittedforanonymityreasons.
King.com
King develops games, including Candy Crush Saga. King was founded in 2003, and was
acquiredbyActivisionBlizzardinFebruary2016.
Cryex
Cryex is a startup working with the development of a FX market place connected to a
licensedclearorganization,CCP.Cryexwasfoundedin2014.
Anima
Animawas founded in 2015 and develops smart and connectedwearables such as smart
watches.
54
8.3InterviewGuide
Introduction
Askifitisalrighttorecordtheinterview
Explainthepurposeofthethesisanditscontext
Explainwhatcompanieshavebeenandwillbeinterviewed
ExplainwhyIhavechosentotalktotheinterviewee
Intervieweequestions
Askthepersonwhatroletheyhaveinthecompany
Askthemtotellmealittlebitaboutthemselvesandtheirpositioninthecompany
Askthemtotellmewhotheirbossis/whotheyreportto
Askthemhowlongtheyhavebeenatthecompany
Recruitmentandrecruitcharacteristicsquestions:
1. Howmanypersonshasthecompanyrecruitedin:
a. 2013
b. 2014
c. 2015
2. Doesthecompanymeetitsrecruitmentobjectivesintermsofqualityandqualityof
newstaff?Why/whynot?
3. Wouldthecompanygrowevenfasterifthecompanywasabletorecruitevenmore
employees?Why/whynot?
4. Doyouseerecruitmentasasignificantinhibitortocompanygrowthtodayorinthe
past?
5. Whicharethetop3countrieswherethecompanyhasrecruitednewemployees?
a. Whythese3countries?
6. How does a successful recruitment / talent acquisition process look like for the
companyintermsof:
55
a. Time
b. Effort,e.g.numberofinterviews
c. Successratio
7. Canyoupleasedescribethecompany’sstrategyforrecruitment/talentacquisition?
a. Does the companymake significant useof employeenetworks/referrals for
recruitment/talentacquisition?Pleaseexplainwhy
b. Doesthecompanymakeuseofrecruitmentagencies?Pleaseexplainwhy
8. Hasthecompany’srecruitment/talentacquisitionprocesschangedoverthepast5
years?
a. Wouldyousaythattherehavebeendifferent“stages”duringthisperiod?
b. Have these changes in the process been formally decided, or “just
happened”?
c. Havetherebeendifferentpeopleinchargeofrecruitmentduringthisperiod?
d. Hasthecompany’srecruitmentprocessbecomelongerorshorterduringthis
period,orisitunchanged?
9. Iftherecruitment/talentacquisitionprocesshaschanged,canyoupleasedescribe
whyithaschanged?
a. Newpersonsincharge?
b. Thepreviousrecruitmentstrategywasnot“good”enoughintermsofquality
orquantityofrecruitedstaff?
10. Did/doesthecompany:
a. HaveaHRdepartmentorspecialist?
b. Performananalysisofrecruitmentmethodsatleastannually?
c. Havearecruitmentplanfornextyear?
d. Traininganddevelopmentplanfornextyear?
11. Doesthecompanyapplythesamerecruitment/talentacquisitionstrategyacrossall
ofthecompany’sgeographiclocations?Why/whynot?
12. Doyoufeelthatthecompanycopiestherecruitmentpracticesoflargefirms?Please
explainwhy/whynot?
13. Do you think that the company defines recruitment effectiveness differently than
otherfirms?Pleaseexplainwhy/whynot?
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14. Withthebenefitofhindsight,doyouthinkthatthecompanyshouldhaveadopteda
differentrecruitmentstrategyintheearlierphasesofthecompany?
15. Doyoufeelthatthecompanyhasmorewell-definedjobdescriptionscomparedto3-
5yearsago?Pleaseexplain
16. Whichpersonalqualitiesdoesthecompanyconsidermoreimportantinpersonsthat
youdecide to recruit?E.g. arepersonalqualities suchas integrityandattention to
detail more important than commercial / technical ability, work experience and
credentials?
a. Hasthischangedoverthepast3-5years
17. Doesthecompany’srelativelysmallsize(comparedtoverylargetechcompanieslike
Ericsson,Accenture,…)positivelyornegativelyaffectthecompany’sabilitytoattract
andretainemployees?
Onboardingquestions:
18. Pleasedescribethecompany’sHRstrategyforonboarding?
a. Does the companydoanything special tonew recruits?Donewly recruited
employeesgothroughatrainingbootcamporsomethingsimilar?
b. Doyouhaveasystematicprocess toterminateemployeeswithinthe first3
monthsiftheonboardingisnotsuccessful?
19. Howwelldefinedwere/areyourworkduties?
20. Isthereamentorprogramfornewemployees?
a. Ifnot,why?
Companyculture
21. Canyoupleasedescribethecompany’sculture?(reformulate,badquestion)
22. How does the company define its own culture? That is if The company gives an
officialstatementinthisregard.
23. Hasthecompanyculturechangedoverthepast3years?
a. Ifyes,why?
b. Ifno,why?
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8.4ExtraGraphsKambi
Correlationfactor:0,989
Graph4:KambiRevenueandEmployees(2010-2014)
NetEnt
Correlationfactor:0,927
Graph5:NetEntertainmentRevenueandEmployees(2010-2014)
DICE
Correlationfactor:0,945
Graph6:DICERevenueandEmployees(2010-2015)
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