How Founders Can Stay Competitive in a Hot Hiring Market
A confirmation email has been sent to your email.
Hiring top-notch talent and retaining the employees who keep your startup up and running isn’t for the faint of heart.
There’s always another employer who’s willing to counter your offer to a candidate or offer attractive perks that may tip the scales in their favor. It’s a reality that, in more recent years, has been exacerbated by the sudden influx of people who are abruptly quitting or changing jobs during the COVID-19 pandemic—a trend that industry experts and researchers are calling the Great Resignation.
The job market is hot and the competition for talented candidates is fierce, bolstering your startup’s reputation, so effectively communicating the benefits that you offer, monitoring the success of your hiring efforts, and developing a robust recruiting and hiring process can really go a long way.
If you’re trying to map out a strategy that will give your startup an edge over the competition, Brex Tech Recruiting Head Sophia Han, Carta Total Rewards VP David Thompson, and Pilot Co-Founder and COO Jeff Arnold have a few tips that can help you develop best practices for closing candidates. For even more insights on diversity within the hiring process, structuring sell calls to candidates, and more, check out Pilot’s webinar on how to hire for your startup.
Don’t only focus on salaries in a hot hiring market
You may need to put your money where your mouth is when it comes to attracting highly qualified and skilled candidates, but that alone won’t necessarily convince them to accept your offers.
Even if your company is willing to offer cash compensation that would place you in the top 5 percent of your market, really great candidates are going to find another company that can up the ante. Gone are the days when you may have been their only job opportunity or at least the one that was surely willing to pay them the most.
Along with sharing the types of benefits that your startup offers, you should also be ready to explain how they stand out and whether there’s some built-in flexibility that addresses where candidates are in their overall career journey.
As an employer, you should think about how your company keeps employees engaged and supports them so they can maintain a healthy work-life balance. Although these particular considerations aren’t directly related to a candidate’s take-home pay, the COVID-19 pandemic has undoubtedly caused people to re-evaluate what work-life balance can or should look like. Being forthcoming about company initiatives and flexible benefits or perks can actually help you win over candidates who are searching for a better work-life balance in a new role. If your startup has teams in different parts of the country or world, it may be helpful to explain how that works and what you’re doing to support them.
Keep tabs on key recruiting and hiring metrics to gauge success
At a fundamental level, recruiting and hiring is a systemic process. Whether you're filling your roles or not is ultimately a numbers problem, so it’s important to keep track of certain metrics that will determine whether there are any kinks in your recruiting and hiring processes.
A lot of attention is paid to conversion rates, or the percentage of candidates who were successfully hired compared to the number of vacancies during a certain period of time, since you can see how many candidates are moving through your pipeline.
However, it can take time for conversion rates to ramp up, especially if you need to work with hiring managers to find the best fit for a position, determine what the market for candidates looks like, and conduct research. Once roles have been fully fleshed out and you’ve made a few hires, your conversion rates should improve.
Monitoring your offer acceptance rates allows you to keep a pulse on the market and trends. This metric also enables you to determine whether benefits or compensation adjustments are warranted.
On a more granular level, keeping tabs on where hires found an open role in your company can help you see which channels, such as online job-posting sites and paid ads, are most effective and whether you’re getting a return on your investment.
Checking how long it takes for candidates to get hired and go through the various stages of your recruitment and hiring process can help you predict when a job opening may be filled once a search starts.
You can also focus on specific hiring and recruiting metrics that are based on what your company wants to achieve. Brex, for instance, analyzes location-specific metrics since it is a remote-first company that has dedicated a lot of time and effort into expanding within the U.S. and in other countries.
Explain your company’s equity value in a way that’s easy to understand
Not everyone may understand the pitch behind your business, but there’s a decent chance that you might get a candidate’s attention by offering equity value when you’re an early- or growth-stage company.
In truth, many candidates understand how valuable startup equity can be, especially if your company is doing well and an IPO may be in the future.
To that end, explicitly explaining the trajectory of your business to candidates can help them understand how valuable their startup equity could become over time.
If it comes down to it, overstating the value of your shares can be problematic, so work with your legal team to craft equity value materials that can be shared with candidates. For example, it may be possible to create realistic hypothetical scenarios that spell out what shares may be worth over time when specific exit valuations and potential dilution are taken into account. Equity value materials like these can help candidates from a variety of backgrounds understand what their options or restricted stock units are.
Although an equity stake in your company can certainly be an attractive proposition for some candidates, there are going to be a fair number of people who may not know much about this type of compensation or how it works. Along with providing materials that explain a candidate’s equity value and what it could look like over time, it may be helpful to offer educational resources that clearly outline the difference between vesting schedules, or options and restricted stock units, so candidates can make informed decisions on any offers they receive from you.
Invest in your brand and look out for it
As an employer, you want employees who are curious and industrious, so it’s expected that most candidates will do all sorts of research on your company. Whether they’re doing an online search, reading about you in the media, or reaching out to their professional networks, candidates are probably going to know a lot about you and your company before their first interview.
The reputation of your company and you as a founder is paramount, so constantly monitor reviews, encourage current employees to write them, and update information on popular professional networking sites, such as LinkedIn, Glassdoor, Comparably, and Blind. More specifically, keeping tabs on the candidate reviews on Glassdoor can help your company maintain a good hiring experience.
Clearly communicate your mission and what the work culture is like
There’s a good chance that your company’s focus is different than any other one out there and that’s likely because your mission, team, and culture is equally unique.
Companies often zero in on similar goals, such as a robust customer-focused experience, for their mission or culture, so illustrating it through real stories that may not happen elsewhere can really set you apart from other employers.
You can also reinforce your mission and values, as well as tie them into team accomplishments and goals, by talking about it frequently during team syncs, all-hands meetings, retreats, and other employee gatherings. Explaining how your company recruits candidates and onboards new employees can also foster engagement within your mission and company culture as a whole.
Turn to Pilot for startup hiring advice
As a startup founder, recruiting, hiring, and retaining the best people for your company is arguably one of your most important tasks.
Without high-quality people to carry out ambitious goals and keep things running like clockwork, it will be even more difficult for you to ensure there’s enough in the bank, establish your company’s overarching vision and strategy, and other important responsibilities.
By monitoring key hiring metrics, promoting relevant company benefits, making it easy to understand equity value, paying attention to your company brand, and communicating your mission and work culture, you can attract high-quality candidates and hire the right people in a fierce labor market.
Want to learn more about how to build a recruiting team, compete with larger tech companies on talent, and address diversity concerns? Check out Pilot’s on-demand webinar on startup hiring with Carta and Brex.