Recent research by KPMG revealed there is now more money on the table than ever before for startup founders, with Australian businesses raising $167 million in the first quarter of 2018 alone. And while it may be one of the most positive periods ever for sourcing VC funding, young businesses should be wary of prioritising capital raising above all else.
Finding transformational talent
When a startup is in its early stages of operation, the best founders will understand that their first few hires have the ability to make or break their business. An employee with the right skills and perspective can skyrocket growth, whereas a toxic employee can cause long-term organisational damage.
Steve Jobs once pointed to the transformative impact of top talent, estimating that superb programmers out-performed average ones, 25:1.
Companies should never underestimate the power of a knowledgeable employee who takes initiative when it comes to driving the company forward. This is why onboarding an exciting new member of staff should be celebrated just as much as closing a funding round or signing on a big-name investor.
Good talent is a rare find
Recruiting and human resources aren’t seen to be as exciting as raising capital, but the reality is they are just as critical for budding young companies.
Startup founders will often focus all their energy into gathering seed funding and when they finally do, they then find themselves desperately hunting for talent to rapidly expand their team. However, along with all the other pressures of scaling a business, founders will often realise it is too late by then.
Recruitment can no longer be treated as an afterthought. This is especially true for startups today who are facing a unique challenge that reflects the times; the talent pool has far more options than ever before.
During the dotcom boom, people with technical talent could really only look to work at startups or early-stage internet companies.
However, with the rise of ecommerce and fast-evolving tech innovations, today’s professional environment paints a very different picture. Now talent is highly sought after across a wide variety of industries, locations, and company sizes.
Take agile software skills for instance. We found that agile software development is the most in demand tech talent in Australia, with employer demand outstripping talent supply by over 8 times. However, when you look at the industries that employ the most people with agile skills, it is completely varied, spanning a wide variety of companies and a range of job titles.
Startups would be wise to acknowledge early on that there is a very real challenge in finding talent for tech jobs in an environment where most companies are now very tech focused.
This shift in focus was recently articulated by SafetyCulture CEO, Luke Anear, who has completed capital raises as large as $60 million in the Australian company’s young life.
“Culture is now the number one priority for me, where it used to be product. Back in the garage, all it used to be about was product and customers, but now it’s about maintaining the right culture in the business,” Anear said in an interview.
SafetyCulture says it now puts significantly more effort into its hiring process, with as many as eight job interviews being undertaken on a daily basis in its Sydney office.
Exercise in storytelling
As with seeking investment, recruiting for a startup comes with a lot of challenges – there is often not much budget for the hiring process or for high salaries.
However, the silver lining is that founders can draw on the clear parallels between pitching the business to venture capitalists and attracting a potential hire to the team.
Startups have to “lure” candidates and capture their interest through compelling storytelling – as is the case when pitching investors.
Founders need to be able to powerfully tell a story to not only raise money, but to also recruit the talent that will drive their business forward.
Being able to articulate why their mission and business model is the right one is essential to convincing a candidate to invest themselves and their lives in the growth of a young company.
Jay Munro, Indeed Employer Insights Strategist, Australia & New Zealand.
Photo by Annie Spratt on Unsplash