Hiring is tough these days – salaries are rising, candidate shortage is becoming more prominent on a global scale as the US based employers are shifting their view to hiring across Europe to Australia on a remote basis.
The battle for talent had already started in 2021, so here are the 5 core ways to help you stay competitive and attract the right people to your team.
Be aware of the competition.
As of today 30,665 startups in the past year raised VC funding (by the stats of Crunchbase alone). As the abundance of capital is growing, so is the related number of startups who are scaling and therefore hiring for their teams. The situation for European startups is arguably tougher as the limited talent pool is getting approached by the US based startups, offering higher compensation ranges (not to mention FAANG offers). For startups that wish to attract the best and brightest, we suggest reviewing the offering adequately, not based on what you offered 2 years ago, but what the market situation is looking like right now as we are in the candidate driven market.
Thanks to a Think& Grow report analysing over 32,000 data points and comparing those to the US and the UK companies we see that 49% of roles have ESOP allocations, non executive roles have an average of $17k in value and “Chief” and “Head of” roles have 2-3x their salary in equity. Although this may not line up with the equity value of Seed and Series A companies, the importance of the equity as a valuable component is clear. From the candidate side, equity is an expected part of the comp package for senior IC and upward roles. It could also help attract and retain more dynamically moving junior talent in some teams. Equity does not affect the base salary expectations as much as you think – whereas an expected and an important part of the package, do not rely on the equity component to “compensate” in full for a salary cut.
One way to stand out is to offer clarity on the available base + equity packages so each individual can pick and choose what works best for them. Make sure the legal, tax and dilution implications are understood.
Source: Think&Grow report
Further, 52% of companies offer parental leave and 44% offer wellbeing programs to help attract and retain the best global talent.
“Most of the companies out there that want to compete, are offering base equity, and bonus, that’s kind of the standard that you’re looking for across all levels”– Zak Islam, CTO at Linktree
Get extra excellent in Candidate Experience (CX)
As the first real introduction to your team and the way you function as a venture, the whole process of attracting the candidates cannot be neglected. Preparation is necessary nowadays for a perfect pitch, on the spot alignment of a person’s interests and goals with what the opportunity offers, and (rather essentially) a follow up with a deep dive into the team and the opportunity itself to enable the person to understand in-depth the challenges of the role. And I do not mean sending a generic JD here 🤓 – follow the new ways of communicating your story and mission to the talent both visually and verbally, matching their aspirations to what the role offers. A great match is a win-win match.
Over the past year I’ve been collecting the data from my interviews, addressing the question of most valued factors that instil confidence and trust in the company.
The top 3 are:
- Speed of feedback and transparency of the interview process (steps, what to expect, who will be holding an interview)
- Clarity of the mission of the role and what the person is expected to accomplish
- Visibility into the company plans/ product roadmap and priorities (for all roles)
If you don’t know what you are looking for, you won’t find it
One hardly will position oneself well if the profile of the role is not 100% sharply defined in the minds of each and every person making the hiring decision, the discrepancies will be clear. By not spreading your attention around and focusing it on the exact target profile you wish to bring in enables you to listen and hear the exact concerns your potential new hires have and thus allows you to address those with due attention and detail. Not defining the role down to the T is the issue N. 1 for all teams subject to making any hires and is applicable to all the roles from junior to C suite. Follow the flow of defining the target, refining the target, and interviewing the precious few who will bring tremendous value to your venture.
When not defining the role, the team is risking having unrealistic expectations from the profile, picking and debating the relevance of experiences from the background of the individual, potentially never coming to a conclusion of a good fit. I trust the leadership time can be spent much more productively with a 2 hour investment of defining the realistic profile rather than wasting more time on needless interviews and debates, and hurting your employer brand in the process.
Also, this holds vice versa, from the candidate’s side – not knowing what type of challenge and environment you are ready for is the most prominent issue resulting in the misfit and loss of time on both sides.
Build your brand from day 0
If you thought there were more important things to focus on in your company than your brand’s reputation, you may need to re-think that. Research by Link Humans showed that 84% of employees said they would leave their current job if they were offered the chance to work for a company with a better brand reputation. Poor reputation also costs the company at least 10% more per each hire. Watching over your social media, Glassdoor reviews is a good start, yet do not forget about the component that is built continuously when reaching out to candidates, through the interviews, and while working with you – this is especially relevant in niche talent pools.
Recognise the true cost of the mishire
Founders are often under pressure to grow and get the right people onboard fast. Whereas focus on speed is a good parameter for growth, we cannot neglect the quality of our hiring decisions in that time. Arguably, the earlier we are in the VC funding cycle the more critical our decisions are (something we noticed early on in NOMU VC), and, therefore, the more is the need to ensure the match between the challenge the role offers and the capabilities and past experience of the individual we are striving to bring in. Match incorrectly, and your whole organization can crumble from that setback.
HBR previously quoted the cost of the mis-hire to be 5-15x the annual salary, which could yield $1-3mil, taking into account the $200k base. Let us analyze and estimate the direct observable cost of the mishire and the unobservable cost, which is the largest component of this estimate.
The exact math of calculating the direct and indirect cost of a mishire is on our YouTube.