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Hiring incredible talent, notably engineers, has become a crushingly hard challenge for most startup founders. While hiring seems like a good problem (you’re growing), try searching for a new Ruby engineer for six months, while your traffic takes off, feedback emails flood in, and product development grinds to a halt.
The main issue? Engineers are starting their own companies, getting boatloads of money offered to them by Google, Facebook and other tech juggernauts, or simply haven’t heard of or don’t care about your startup.
Solving this challenge was the reason behind the recent War For Talent conference, which brought Silicon Valley elite together, ranging from Ron Conway to Dave McClure, to discuss creative hiring solutions for scrappy entrepreneurs and growing tech companies. One of the most talked about strategies was how converting interns into full-time employees can be a scalable competitive advantage in the talent wars.
At InternMatch we have found that more and more startups have started hiring interns (in fact in a recent survey including YC and 500 Startups companies, over 93% of early stage startups said they are planning to hire interns in the next three months), but we have found that few startups have mastered the critical conversion step that creates a real win.
Here are three keys to converting interns and saving your company from the hiring chokehold (if you’re interested in how to hire rock star interns, check out our post from last year).
The economics of conversions
The first step to being able to convert interns is convincing yourself and your team that it matters. While interns are a powerful, untapped market to draw from, hiring the best students still takes time, money, and considerable internal focus. One good way of thinking about this is on a monetary basis:
The average tech recruiter will take anywhere from 20% to 35% of a new hire’s starting salary. Low-balling an engineering salary at 100K annually, this is anywhere from $20,000 – $35,000. The cost of paying an average tech intern salary for 10 weeks is $8,000!
This means you can hire four talented summer interns for the cost of a recruiter fee. If you convert just one of those interns, you come out on top, because your interns have been cranking on code all summer, and you’ve had ample time to test your new hire for fit with your team and culture. If you hire two, three or all four of your interns (as many companies do), then it is an even bigger win.
A 10-week reverse interview
The second trick to converting interns is realizing that this is a 10-week long reverse interview. While students are looking to impress you and gain their first professional experience, they should constantly be exposed to why your team, company, and vision are fantastic.
This does not mean taking interns to baseball games or on rafting trips, although that’s not a bad thing – it does mean exposing them to real projects, dedicating consistent time to teaching them new skills, and taking them to meetings with advisors, business partners, and more. Nest, for example, partners every intern with a mentor and has them create a final project that is incorporated into their product.
Making an offer
The biggest mistake most startups make is not knowing what to do at the end of an internship. If a student is heading back to school for nine months and your company will change rapidly in that time period, can you make them a full-time offer?
The answer is yes. The biggest companies have mastered the trick of taking on interns, showing them an incredible summer, and then getting them committed to joining full-time before they explore other options. Ernst & Young converts over 90% of its intern class this way. Google makes offers to students and then allows them to take two years off to pursue activities like Teach For America.
The point is that your company might change dramatically over the course of a year, but you will always need top talent. You shouldn’t hesitate to make an offer to someone who is a good fit and ready to join your team. An offer letter and 10% signing bonus is a great way to lock a student in.
Ultimately, winning at hiring is about developing a process. Few opportunities exist like the constantly refreshing pool of new talent that stems from universities. Pursuing college talent with intensity and focus will bring you stronger talent at a lower cost.
Nathan Parcells is co-founder of InternMatch.com, a leading website to help students find amazing internships and help companies find amazing interns. Nathan has spoken at universities across the country on intern hiring issues.
[Top image credit: Goodluz/Shutterstock]