Why the next 6–12 months will be the best time in a decade for startups to hire
Our YOLO Economy New York Times’ Kevin Roose labeled the new attitude sweeping workers in certain privileged parts of the economy.
But for many of those who can afford it, adventure is in the air.
One executive at a major tech company, who spoke on the condition of anonymity because she was not authorized to talk to the media, said she and her husband had both been discussing quitting their jobs in recent weeks. The pandemic, she said, had taught them that they’d been playing it too safe with their life choices, and missing out on valuable family time.
I’ve seen this in my own circles as well. Whether it’s moving to a new geography for a fresh start (for some, maybe just an Adventure Year) or leaving a safe but stagnant career, the “I’m starting a new company/open to a new gig” inbounds are up since Jan 1.
But it’s not just a new appreciation for the preciousness of one’s time and focus after a year of social distancing. We’re also seeing people vote with their feet towards companies which share their values and away from companies that, in their mind, violated a social contract. The company’s business matters too — the agriculture, health care, financial empowerment startups in Homebrew’s portfolio are all telling me about an increase in candidates who mention the mission as a reason they’re attracted.
And oh my goodness, we’re going to see a lot of transitions as companies head back from health-required distancing and settle into a longterm decision about work. Back in the office, hyrbid, fully remote. There’s surely going to be 5%?, 10%?, 20%? of teams for which a CEO’s decision won’t match with what they want from a job.
Receptionists, for example, need to be in the office five days a week, Burke said. But she envisions most other jobs being “flex jobs” where employees can choose to work remotely at least 50% of the time. There will then be jobs that can continue to be fully remote, but DocuSign will leave those decisions up to senior managers.
“The truth of the matter is, this is just a big experiment that we’re all in and none of us really have an answer,” Burke said. “We just have to stay open and fluid and listen to our employees.”
Employees are going to vote with their feet and I feel for People Ops teams who are going to be having a tremendous number of emotional conversations.
With understaffed HR teams increasingly working with algorithms instead of coworkers, it’s easy to forget that employees are people — people with families, hobbies, and rich inner lives that often go unnoticed and unacknowledged at work. Empathy is not a math problem. And even if most of us aren’t crying behind the webcam, it’s never been more important to know how employees are feeling.
Overall though it’s fantastic and will give high performing companies of all stages a chance to really bring talent together a way that before maintain a greater number of frictions. Here are some things I’m seeing the best startups do to prepare for the opportunity:
- Build a Stretch Headcount Budget -> Sometimes you gotta bust the headcount plan when there’s a chance to make key hires. It most commonly takes the form of a budgeted head that you want to add earlier than planned, or adding an incremental hire to an existing team (ie one more engineer than otherwise planned). I’ve seen many first time founders overthink (or overestimate) the financial impact. Hiring a ‘bird in hand’ just a quarter or two earlier is typically a rounding error when it comes to incremental salary for a high performing venture backed company. Especially versus the ‘cost’ of running a full search process later on and risk of schedule delays. Plus, given the current retention environment (what this entire post is about!) it’s worth adding someone great, especially if they’re a known quantity to you or a current team member. So I’d advise talking with your team leads and your investors now about willingness to go a bit ahead of FTE count this year and running the models to show implications. Typically it’ll pull in your “cash out” date by 15–30 days, which again, for a high growth early stage startup, is a bet you should often take.
- Double Down on Passive Candidate Outreach -> Flood the zone! Seriously, ping the folks who might have turned you down previously just because of timing. Have your team reach out to the best former colleague or friend in their network and make the pitch. Sort your through company social media followers and newsletter subscribers and reach out to anyone interesting. There’s never been a better time to try.
- Company Culture “Data Rooms” -> Collections of internal communications and documents which allow candidates to see if the walk matches the talk. Sometimes it’s company all hands videos or slightly sanitized Board decks. Private company podcasts are increasingly something shared with candidates and new hires, telling the story about the company and the people involved. Especially effective to help with questions around authenticity and solving for distance in a remote hire situation. Note, these are usually opened to senior candidates and/or shared at the point an offer is made.
- Don’t Forget the Partner/Spouse/Families -> I can’t believe I’m giving away all my hiring secrets here instead of holding them back for Homebrew founders! Ok, you get the 50,000 ft summary instead of specific tactics then (c’mon, venture is competitive, I gotta hold back a thing or two): Don’t forget the other influencer’s in a candidate’s life. Namely, their family/partner/spouse. Especially given the intensity of this past year, there are often dynamics that you might not have full visibility into. I’ve seen longshot hires successfully made because the spouse was actively and appropriately ‘sold’ by the startup. And ‘90%+ likelihood of closing” candidates lost because the founders didn’t have full visibility into the evolving personal situation and preferences at play.
Show me the first 20 hires of a startup and I can usually tell you whether they’ll succeed or not. Since we invest well before this milestone is reached (often it’s just the founders), helping the startup build their teams is one of the most important things we can do at Homebrew. It’s why we brought on a Head of Talent during our first years who works directly with founders on their hiring strategy, not just sourcing and process (although that too).
There’s never been more talent thinking about what they might do next. Go hire them!