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Entrepreneurs have always coveted talented people to execute their vision, and there have never been enough to go around. But with global labor markets upended by Covid-19, demographics and the increasingly specialized skills many tech jobs now require, the struggle to hire the best and the brightest has become even more difficult. Talent is now firmly a seller’s market, and it’s particularly challenging for early-stage companies, which often aren’t capitalized to compete on pay or benefits.
However, that doesn’t mean startups can’t win the war for talent. In fact, some of the trends I’m seeing in the job market line up firmly in their favor. It’s not always about pay, ping-pong tables or over-the-top perks. It’s about offering culture, flexibility and value propositions that put people’s actual needs first. Can employees connect to the purpose and vision of what you are trying to achieve? If so, it will be biggest indicator of their engagement.
The future of work hit employers sooner than expected last year; companies were forced to react in the midst of a pandemic, and many still haven’t flipped back to strategic thinking about talent. That will change, but for now, startups have an advantage: They’re nimble. If they can pivot on product, they can pivot on people. Here are some ways how.
Sell the startup story
Google, Facebook, Apple … the elephants of tech pay well and hire prolifically, but they’ve gotten big and bureaucratic, miles from their plucky roots. Startups are where you go to innovate. They’re where you go for an MBA in entrepreneurship. And they’re where you go for early-stage equity that could someday be worth millions in an IPO — “giraffe money,” as some call it. Whatever your product, that’s a story worth telling.
Of course, many people who work at startups aren’t going to make giraffe money, so they have to compete on purpose. I used to work at a company that was swimming with money but short on other reasons to be there, and I saw a lot of unhappy people pretending to fit in. By contrast, some of the startups we work with use their purpose as a selling point. These values can be displayed prominently on website home pages or even within job postings themselves.
Treat HR seriously
The legal, financial, cultural and social implications of managing people have become extraordinarily complicated in recent years. And the more valuable talent becomes, the more critical it becomes to manage it well. Early-stage companies have a tendency to treat professional human resources as optional, which can be a fatal error. Think of HR as recruiting only and staff it with an administrative operating model, not a strategic one.
Employers have long been used to setting the terms of employment and forcing potential employees to conform. But if talent is a seller’s market, startups need to listen to what their people want — and adjust. Dial back the mandatory meetings. Be willing to train younger candidates with potential. Give new employees a menu of compensation options instead of a standard package. Allow parents to work four-day weeks or reduced hours. Focus on outcomes, not timesheets. Another company we work with has shortened work hours and actively encouraged its employees to extend time at a vacation destination by working remotely for a week — their guiding principle is “as flexible as possible,” so long as requirements are met. That’s a great example of meeting your employees where they are and where they’d like to be.
This is second nature to most startups, and it’s a key advantage they have over the lumbering legacy companies. Teleconferencing tools and collaboration platforms aren’t just about small efficiency gains — they’ve changed the talent game by allowing us to hire across town or across the border. They’re also revealing of company culture. While some companies use remote work as an excuse to treat remote workers differently, others are making more of an effort; for example, if remote teammates are outnumbered by those in the office, everyone can log in to Zoom so nobody feels excluded. Talent-starved startups shouldn’t just be using tech, but maximizing it to hire and retain talent.
Pick a lane
When you’re small, you’ll never be everything to everyone. But in the talent game, you can compete by offering something of high value to certain people. Maybe you can’t compete on pay, but you have killer health benefits, a generous parental-leave policy or a proven commitment to diversity. The smaller the startup, the narrower the demographic it can target in order to meet its talent needs.