Welcome to the arms race of recruiting talent. Developers and product managers are in demand. Content creators, marketers and data analysts can pick and choose opportunities. Salaries are soaring. To say the least, the competition for companies to snatch up talent is fierce.
For candidates, the financial rewards are considerable. Engineer salaries easily surpass the $100,000 mark, for instance, according to Startup Compass. Larger companies like Google and Facebook can afford to pay employees even more, so they have an inherent advantage over early-stage companies. With both startups and established companies throwing more money at talent every year, the arms race escalates.
So how can early-stage startups compete for exceptional talent? Here are four thoughts:
1. It’s not all about the money.
The good news is that salary alone doesn’t work when recruiting talent. A bigger paycheck is not the only form of financial reward. A Harvard Business school report found that money doesn’t necessarily correlate with job satisfaction. In fact, more money can actually work against a company to diminish employee motivation and engagement.
For early-stage founders, it’s welcome news that money isn’t the sole motivator of accepting a new job. But it doesn’t resolve the underlying issue that larger tech companies are almost always going to be able to offer higher salaries.
How do companies attract and retain the best staff? In my experience, a company’s culture plays a crucial role.
2. Culture is the foundation of every organization.
Company culture is a frequent topic, yet it’s difficult to define. It’s that ethereal substance upon which everything else rests. Culture is how your organization does what it does, and cultures are as varied as the companies to which they belong. They are seeded by the personality and values of the early team, and shaped by important formative experiences of the company. A quality company culture is also one of the hardest workplace qualities to obtain -- 64 percent of employees do not feel they have a strong work culture.
In the early days of my company, Justworks, we often went out of the office together for lunch. We talked about things like childhood and family conflict. Two years later, the team is as empathic and vulnerable as any I’ve ever seen. We still love to get together outside of the office. Prospective candidates sense this and are further drawn into the company (or repelled, if it’s truly not their thing). In either case, the culture reinforces and perpetuates itself.
If you’re the founder of a young company, you’re already establishing the culture with everything you do or fail to do. A Gallup survey found that your team will use your behavior as a barometer. Employees supervised by highly engaged managers are 59 percent more likely to be engaged at work. Do you hold people accountable? Are you fair or capricious? Do you lose your temper or keep your cool? In the end, little things make a big difference.
3. Transparency shows you trust candidates and new hires.
Transparency is a key aspect of culture, particularly for newer employees who demand to understand the “why” behind the “what.” Some companies, like Buffer, espouse radical transparency and share information like individual compensation data. Many governments have published similar data for decades, so maybe it’s not so radical after all. Other organizations are more secretive, keeping employees in the dark about things like strategy, objectives, board discussions and financing.
Each company must figure out what level of disclosure works for them. During the recruiting process, I often detail the kind of information that we share internally, like board decks, operating plans, company objectives and financing information. The candidate’s eyes usually light up, intrigued by a company that would trust them with this information. Doing this isn’t just good for the candidate. It’s great for the company, which is staffed with a team that understands operating context and can make informed decisions quickly.
4. Your employees won’t work at your company forever.
An opportunity where employees can develop their skills is more valuable than an opportunity where they can’t. Half of millennials (prime startup-age employees) think they will start their own business in the next year. Being able to understand how your company runs is invaluable to this group.
Beyond earning insight into a company’s operating information, employees need to feel like they’re given ample opportunity for personal development and that the company is invested in making that development happen. Sixty-one percent of highly talented managers work to leverage and develop employee strengths and attributes, according to Gallup. I’ve prioritized investments into a leadership development program that teaches basic management skills to current and future managers. Better leaders help motivate and inspire employees. In turn, those new leaders will live up to a company’s values and reinforce its culture.
People often ask if I’m worried that the employees we’re investing so much in will just turn over more quickly. Empirically, I’ve seen that our team is incredibly loyal.It’s more like a family, in many ways, than an enterprise. But people will leave, and that’s okay. Many of our most respected institutions create leaders as a core product -- consulting firms, the military and established companies like General Electric, for example. If we can grow people that go on to lead elsewhere, with our values, then we have succeeded in a truly enduring way.
Investing in a quality company culture gives early-stage startups the ability to compete for outstanding talent. Your best employees will understand they might have to take a pay cut to work with you. What will attract them is a company dedicated to their right to transparency and ample opportunity for personal development.
The right candidates will look beyond just the salary and consider the whole package. A new hire who believes in your mission -- and knows you believe in them -- is the only kind you want working for you.