Hyper Growth Expectations vs. Elusive Unicorns
With expectations for hockey stick hyper growth and terms like 10x return and 30% IRR being bandied about, StartUps are in a whole different ball game when it comes to finding the right talent quickly.
This is particularly the case for hard-to-fill positions like executives, key sales and engineering roles, and requisitions for unique candidates with special skills in new areas of cutting edge technologies. 63% of recruiters say Talent Shortage is their biggest problem (MRI Network). Their concerns?
- Candidates don’t respond to calls and emails – 42%
- Difficulty finding passive talent – 34%
- Too many unqualified junk resumes from job boards – 23%
And then once you’ve settled on a candidate they may not necessarily close. The average conversion rate from interview to offer is around 19.78% by some estimates, translating to 5 interviews per offer (Jobvite).
While running your core team to capacity may in time get you to a prototype or proof of concept that passes muster, once you do get your funding finding the right talent may be a necessary evil to get to that next level.
It’s competitive. Everyone’s looking for Unicorns. Skill and fit can be even more critical for StartUps. While putting together the right team can rocket you to success, since StartUp teams are compact by nature with each member having visible impact, a wrong hire could put noticeable drag on your output. The average cost for each bad hire can equal 30% of that individual’s annual earnings (U.S. Dept. of Labor). And opportunity may pass you by when your hires take too long as you blow past investor milestones. If you’re finding the same old corporate recruitment practices just don’t work, here are a few tips that may help.
3 StartUp Tips for Hard-To-Find Talent
TIP 1: STARTUP ENTHUSIASTS –
Startup enthusiasts, founders, entrepreneurs are a niche onto themselves. Although some do make the transition from comfy positions at large corporations, there are others actively seeking startup life – including the crazy hours, disruptive aspirations, break-neck deadlines and all.
Of course start with your own rolodex and those of your investors and associates, but also dig into contacts of so-called “serial entrepreneurs” with proven track records, even startup teams that have worked together successfully in the past.
TIP 2: BUILD YOUR BRAND –
Though before running off to the job boards or even your own network, take a step back to build your brand. Capture that thing in your pitch deck that grabbed your investors’ attention, the reason why you and your partners went ALL-IN with your own time and your own money, why you can’t move fast enough, why your StartUp will change the world.
Brian Tracy called sales a “Transfer of Enthusiasm.” That’s also what you want to do to ignite passion in potential candidates. Bring them aboard your shared vision. Communicate your brand in talent communities and social media, especially those within startup or entrepreneurial groups, and those in the niche technology areas with skill sets you seek.
TIP 3: EXPAND YOUR SEARCH –
Sometimes when you want the very best talent in a new emerging field, you may find that they reside in a different city, state or even another country. Despite a push from Marissa Mayer and others, work-from-home policies are alive and well. 43% of employed Americans said they spent at least some time working remotely, 57% for Computer / Information systems / Mathematical industries (NY Times, 2017). Considering a remote candidate can be a bridge to break-out capability. Though recruiters need to take care in assessing remote working skills such as communication.
Also consider great candidates that may be trainable, especially in a new area of technology, e.g., a leap from predictive analytics or Big Data to AI. They can get up to speed in the time it may take to find candidates already in a particular niche. Someone with a related skill set can also be trainable. For instance it may take someone skilled in C++ or Java only 3-4 weeks to learn C#, or maybe a couple months for a good Front-End Developer to get AngularJS.
Regardless of your situation, finding the right talent is doable. Vision leads opportunity. Building a startup is like catching a bull by it’s horns. You feel a passion that moves worlds. Believe and hang on for dear life.
when third party recruiters are essential?
Getting a third party involved in the hiring process offers benefits for StartUps who want to fill positions with quality talent as quickly as possible. Third party recruiters have the in-depth market knowledge they use to help companies make wiser hiring decisions. Due to their many years of experience in the industry, they have an idea of what salary structure, career expectations, and work environment talent requires. It can be hard for tech companies to fill specific niche jobs due to the shortfall in talent. Third party recruiters already have a packed pipeline of quality candidates in particular niche areas.
In today’s market the standard rate external recruiters charge per hire is 20 to 30 percent of base salary. For strategic or specialized positions it can 40 percent or more. Why? Hiring in Silicon Valley or San Francisco Bay Area may average $7000 cost per hire (CPH) by some measures (Glassdoor), and average $4,129 CPH generally (SHRM). This is because external candidates have an advantage when it comes to finding and closing on highly skilled qualified candidates for a particular niche. Specifically, external recruiters are best used for those positions you find hard-to-fill, including executive roles.
ROI vs. CHP –
When considering strategic impact of a role, “business impacts that the new hire produces may be many many times higher (at Apple for example, they exceed $2.2 million per year for each hire),” advises HR thought-leader Dr. John Sullivan. He further suggests that Return on Investment (ROI) is the metric that should be used, rather than CPH alone. And that makes sense when you think of the value your new team member will deliver.
STARTUP NICHE–
Third party recruiters have spent time, maybe years developing relationships in specific niche areas – specializing in specific roles, technologies, locations, etc. Some like Best Tech Recruiters have built a dedicated practice in specific StartUp communities, including the Bay Area and Tel Aviv. Great third party recruiters grow and maintain their pipelines of excellent candidates to have them at the ready when you need them.
WORKFORCE FLEXIBILITY –
Some smaller companies new to recruiting may benefit from outsourcing their recruiting operations to focus on their core competency. An external recruiter experienced in coming up with the right package based on your funding stage can help you make smart offers that motivate and make sense for you and your investors. You may not necessarily be ready yet to deal with payroll, background checks, onboarding, benefits and insurance. And a contract option allows for short-term or temp hires and an expandable contractible workforce.
NO COMMITMENTS –
Some companies worry that signing with a third party recruiter may limit their choices. Not true. Unless you sign an exclusivity agreement you have no commitments. Recruiters confirm a current dated “Right to Represent” (R2R) agreement for each candidate they send your way, confirming that candidate’s current interest in your specific position at your StartUp and verifying that they have never self-submitted or authorized any other agency to represent them for that position before this. Some say within the last 6-12 months, we say ever. In the case you are already familiar with a candidate, Best Tech Recruiters will honor that.
So it does not matter if you have multiple third party recruiters working on the same position, you close the position, or your own internal recruiters fill the position on their own. You can also always pass on any candidates submitted by a third party recruiter without question. The only cost is the negotiated rate when you hire the submitted candidate. Within the first ninety days from the date of hire if there’s a problem, for just about any reason recruiters will generally replace that candidate upon request. So, there’s no harm in signing a third party recruiter agreement one way or the other.
Best Tech Recruiters Can Help Startups Get The Right Talent
Startups and founders need to have the best talents at their disposal, to be able to achieve their goals. Most times, they are competing with large companies, and their entire survival may depend on getting the right people to fill positions.
- Our recruiters have experience in sourcing for the right candidate for your position
- We understand that startups need to fill positions quickly
- We deliver the right candidates that build value, help founders save money, attract investors, and remain focused
The IT world is getting more technical and complex, and new technology challenges are leading to the creation of new jobs that will help tackle and solve those problems. Companies now need to fill niche-specific positions with limited talent, like Blockchain expert, cybersecurity expert and AI expert.
There are star candidates who are specifically interested in investing their talent in startups, and the best way to get them is through third-party recruiters who already have a relationship with them. Recruitment agencies can also find creative ways to help companies fill positions to attract investors.
STARTUPS ROLES
- Visionary / Architect
- Software Architect
- UI/UX Designer
- Java Developer
- Lead Developer
- Specialized Software Developer
- Application Software Developer
- Mobile Developer / Engineer (iOS and Android)
- Principal Engineer
- Software Engineer
- CyberSecurity Expert
- Information Security Analyst
- Security Professional
- Full Stack Developer
- Front-End Developer
- DevOps Engineer
- .Net Experience
- Maintenance/Legacy Programmer
- Database Engineer
- Director of IT
- Sales Account Manager
- Pre-Sales Engineer
- Chief Operating Officer (COO)
- Chief Technology Officer (CTO)
- Chief Executive Officer (CEO)
