Remote Hiring Bias – 5 Reasons To Recruit Local Employees

A version of this article previously appeared on Inc.

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Mankind has long recognized the power of scarcity- we want more of what we are denied or find difficult to obtain. Societies have come up with homilies that highlight the power of this remote bias, such as, “The grass is always greener on the other side of the hill” and “A bird in the hand is worth two in the bush.” Yet, despite the widespread acceptance of this psychological tendency, a number of Rincon’s startups still assign a premium to remote resources, usually with respect to hiring senior startup executives. 

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Drawing Flies Ain’t Easy In Your Home Town

Familiarity may not inspire contempt, but it certainly promotes complacency. Rock and roll pioneer Chuck Berry once said, “I couldn’t draw flies” in his hometown of St. Louis. He had to travel to nearby Chicago to be appreciated.

In a similar fashion, Jimi Hendrix was an anonymous guitarist for a number of soul groups in the early 1960’s. His career was going nowhere until he traveled to England and gained a following in London clubs. Instead of a washed-up session musician, Londoners perceived Jimi as an ultra-hip San Francisco hippie (despite the fact that he was from Seattle).  

The Tearaways, a band I managed many moons ago, are no exception to remote bias. When they play in Santa Barbara, they draw a respectable crowd of a couple hundred people. However, when they perform in Liverpool, they draw as many as 30,0000 (as shown in the above photo). 

Advantages Of Local Talent

Santa Barbara is a highly talented but small entrepreneurial community. As such, startups often must fill one or more of their senior positions from outside our local market. After observing this process for a couple of decades, I have noticed a consistent pattern; the closer to Santa Barbara the person resides, the more his or her talents are discounted.

Although it is often appropriate to fill open positions with remote individuals, it is prudent to offset the remote bias phenomenon by considering the following advantages to hiring local talent.

Back Trail– Easy to reference. There is a higher probability you will have a pre-existing relationship with one or more people who can provide an honest reference on a local candidate. Additionally, you are more likely to receive an honest assessment of the applicant’s abilities because fellow community members are inclined to share thoughtful input, rather than the generic, sanitized response you might get from an anonymous stranger.

Local Network – Startups recruit heavily from their employees’ networks, especially in their early stages. This capability is reduced when hiring out-of-market employees due to the inherent difficulties of leveraging a geographically distant network.

Good Chemistry–There is a higher likelihood someone at your current venture has previously worked with local recruits, further ensuring a cultural fit.

No Relo Risk – Startups are stressful enough without adding the tension associated with uprooting a family. Locals can focus their energy on their work obligations, without the added distractions associated with relocating.

Termination Pain – Although the impact of termination should not be an overriding concern when hiring someone, the reality is that a local person will have a much softer landing if things do not work out at your venture. This will minimize the disruption, should the person not work out.

When assessing local and remote resources, keep in mind that the grass often looks greener because you can’t see it clearly. Thus, be intellectually honest when assessing employee talent, especially those folks who live in your backyard. 

Follow my startup-oriented Twitter feed here: @johngreathouse. I won’t tweet a photo of a killer burrito I am about to devour – just startup stuff. 

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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