How Startups Can Win the War For Technology Talent

Building a great startup requires an amazing engineering team, and this is increasingly challenging and expensive for U.S. and Western Europe startups, where the competition for highly-skilled technical talent is fierce and growing. To scale up, startups must get in the ring with Big Tech firms, but how can they compete against companies with deeper pockets and big brand names?

We’re living through the greatest age of software development talent shortage. The lack of high-caliber employees has doubled in the past decade, while the demand for innovative IT solutions continues to grow. Nearly every startup is either deeply technical or a tech-enabled business, and an extremely tight recruiting market combined with high salaries for leading engineers makes it difficult for upstart businesses to build a great team in the US or Western Europe.

What’s Happening On the Front Line Of the Talent War?

The competition for a skilled workforce is no new thing. In 1997, the term “war for talent” was coined by Steven Hankin of McKinsey & Company to refer to “an increasingly competitive landscape for recruiting and retaining talented employees”, and this challenge has grown exponentially since then. Recruiting a great team is difficult, retaining the team is expensive and software developments are highly mobile and more confident about switching jobs than ever before.

According to DCI’s 2019 report, 40% of the surveyed participants admitted checking new career opportunities weekly or even daily. The attitude towards job-hopping has changed — great engineers have many job options, and they won’t stick around just for a competitive salary — they want technical challenges, mentorship, career opportunities and the chance to make an impact in the world.

According to LinkedIn’s study on job switchers, more than 54% of technology specialists leave their companies because of the lack of career development. Other top reasons for quitting include poor management, wrong cultural fit, the absence of challenging work, dissatisfaction with benefits and a lack of recognition and rewards.

Does it mean that startups aren’t able to stand their ground in the war for talent? Not at all! Big Tech companies (Facebook, Amazon, Google, etc.) certainly have a head start because they can offer very high salaries, excellent training and luxurious perks, but startups can successfully work with the world’s top developers if you play your cards right. Here is how you can do it.

How to Get an Edge In the Talent War?

Whether you’re going through explosive growth or just starting out, these strategies will help you take the lead in the hunt for talent.

1. Nimble and Innovative Hiring

Startups score an advantage through speed and innovation — and this starts with the recruiting process.

  • Speed: Being nimble can get you ahead of competitors whose interview rounds usually take weeks to be complete despite it being relatively easy to identify top performers when you find them. We suggest using your small size to your advantage and moving quickly when you find great candidates — in some cases making offers on the same day as fit and technical interviews if they go well.
  1. Using data and evidence instead of opinions
  • Perks: Innovation can also be integrated into your perks system, especially at an early stage. As Paul Graham famously wrote, “Do things that don’t scale”, and that applies to recruiting and perks as well — the biggest advantage startup founders have is their time! We suggest meeting candidates in person and learning about their interests, families and hobbies. You can then cater your perks around what people actually care about on a one-off basis, especially when building an initial team (e.g. a pet day at work, free-lunch Friday, etc.).

Read the full article about other solutions to the ongoing war for tech talent in our blog.

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