5 Top Hiring Challenges for Tech Startups
Your tech startup is finally large enough to start hiring employees. Hiring challenges are huge. While growing and expanding your company is exciting, the process can be daunting as you not only want to hire tech people, you want to hire TOP talent. You also want to be careful with how you hire in the beginning so you don’t suffer from bad decisions later on.
We have listed five hiring challenges that tech startups can experience. The recruiting pains are definitely there, but thankfully there are also solutions or strategies that can help.
Hiring too fast
Startup growth is desired, but growing too fast can quickly deplete resources and ultimately cause failure if your company does not have a strong infrastructure and can’t sustain growth. Another problem with hiring too quickly is taking in the wrong people and not investing the time to sift through more qualified or passionate employees. Not knowing how many people to hire, the right time to hire, and which team should be helping with the process are other problems.
According to the 2011 Startup Genome Report, always hire slow and fire fast. The HuffPost suggests to only hire who you need, carefully going over the job description and deciding if the position is actually necessary. They also suggest not to let your current staff get overwhelmed with workload, but commit to training new employees to get them adjusted – in other words, don’t rush the hiring process.
Not being able to attract top talent
If you are a relatively unknown company, it can be difficult to attract seasoned tech talent. One solution for this is having an excellent company culture. As said before, hiring challenges are huge. Culture begins the moment you put together a team so be sure that you have a company culture that is positive and open and also one that current employees will share on platforms such as Glassdoor.
When a startup closes its doors, company culture is normally directly linked to its failure. The purpose of the company along with values should be strategic as well as communicated and “lived” throughout the levels of the company. A study by Deloitte found that “73 percent of employees who say they work at a “purpose-driven” company are engaged, compared to just 23 percent of those who don’t.”
You should also make your company discoverable, not necessarily on a job site but through utilizing platforms such as Instagram and LinkedIn and promoting engagement with potential employees.
Employees being unsatisfied with the long hours associated with startups
If you are hiring talent from more traditional companies, they might not be familiar with the structure and hectic work day of a startup, as well as intensive hours. This is the traditional way startups succeed – everyone pitching in long days, nights, and sometimes weekends for the first several years – and new hires should have an entrepreneurial mindset. When hiring, you should specify this to avoid employee frustration later on and also regularly communicate company progress.
Some tech startups are taking a different approach, however, to a better work/life balance. They are offering more intensive, but more productive four day work weeks. Fridays are for leisure and personal time. This approach is proving to be effective – employers find that their employees are more dedicated at work because they are able to pursue other interests on their down time.
Difficulty finding passionate workers
According to Jonathan Tarud, Founder and CEO of Koombea, “When hiring someone in the technology field, it’s important to look for passion above anything else. It sounds cliche, but let me explain why. People who are passionate can be trained in everything even if they don’t have the “experience.” They are the most driven worker that you can have in the workplace. He or she can accomplish everything they are told to do and will go beyond the typical job requirements.”
How do you find passionate employees? For starters, according to suggestions by Business News Daily, ask certain questions in the interview. What are his/her hobbies and interests? What are his/her professional growth goals? Does he or she desire a balanced work life schedule? Is your business something that excites this person? See if their answers align with your culture and definitely gauge enthusiasm as passionate people get excited about things that make them happy.
Also, once these people are hired, be sure to keep investing in them (again, promote a positive company culture and reward strong job performance) so that they stay passionate and satisfied within the company.
Not having a competitive compensation position
It’s true, startups normally cannot offer as competitive salaries as more established companies. Although sometimes a startup will pay a higher salary for a new hire in order not to lose them to another company, this practice is not advised as it can lead to unrealistic expectations for the new hire, as well as discontent among other employees and hurt company financials.
Never underestimate the value of non-cash compensation – for example, equity isn’t an alternative to cash, but it is an important component of a well-rounded compensation strategy. Flexible schedules, paid time off, reward programs, etc. can also be strong incentives. Also, allowing employees creative liberty with projects can help with employee satisfaction and retention.
Founder and CEO of RocketSpace (a technology based accelerator), Duncan Logan, puts it like this, “Often start-ups complain that they cannot afford tech talent or compete with Salesforce, Google or Apple on price. But in every large company there are people desperate to get out and join an exciting start up, it just takes effort to find them.”
For more information on the issue of hires for tech startups contact us at Cytex Ventures.