Oiling Your Hiring Engine During a Market Shake-Out
5th May 2020
"Take a scythe to your costs, tarmac a runway extension and double down on work-from-home think pieces. We’ve got a business to save." - George Morriss, Director of Startups, Talentful.
The past month was all about companies playing defence; market-wide furloughs, chunky tech-sector layoffs and radical remote working innovations. A world of supremely challenging decisions and career-defining moments in the most fleeting of months, a jarring fork away from the growth curve the UK tech sector became so comfortable with. For many startups and scale-ups, April 2020 played witness to all the biggest decisions they’d ever made.
The ensuing adaptation of many company’s operating models to a ‘new normal’- if we’re even comfortable using that term- has played out quickly and through varying needs, to varying extents. Certainly, those quickest to acknowledge, defend and consequently adapt to the existential issues caused by COVID-19 have started to consider switching on a more offensive strategic path now the dust has settled. Pragmatic, and I hear you.
I recognize firms’ desire to leave the market shake-out firing. It’s the overriding message from Talentful’s client portfolio and within my own network. It’s palpable and resonates deeply. By definition of the mission we deliver towards every day, Talentful as a team see this desire in the businesses we partner and grow with.
So, what does it look like to be on the front foot in the talent space right now? How do you best prepare your talent function for what’s next? By no means is this an exhaustive list, but it will go some way to catalyzing a step-change in your hiring capability over the coming months:
1. (Re-)Invest in a clear, uniform talent vision.
There’s talk of venture-backed companies with cash reserves going on opportunistic hiring sprees while talent floods the market. Unless you’re a FAANG company or thereabouts, be cautious of this approach. A f**k-the-forecasts hiring spree is a natural competitive impulse, but typically a bad idea unless your company retains excellent discipline and strict selection principles.
Know what you want before you drag people’s careers and your cash into the fray. That’s still the case if you hold off hiring for now, and then dial it up 100 notches later in the year. Hire through target or OKR-necessity. Stay objective and hire true to who you need rather than who you see- if you don’t do this already, invest your time in building the capability now. My recommended framework to deliver this is Vinod Khosla’s gene pool engineering methodology. This is how I typically approach this challenge with early-stage clients. COVID-19 has changed the economy but it hasn’t changed how to hire well- don’t open the floodgates without a clear, uniform talent vision. You’ll break things, in a bad way.
2. Startups, re-evaluate how you pitch candidates. Bigco’s, leverage your stability.
COVID-19 is a risk recalibration flashpoint in Startupland. Many overvalued or already-struggling companies are very worried about their future or seeing that worry manifest itself in reality. There’s been a recent trend for fairly small companies to emulate the high-cash-burn perks, comp packages and workspaces of Enterprises. For many startups, that now seems short-sighted. Startups raised a tonne of cash to- yes, build product, buy time, acquire customers- but also level the compensation playing field and steal away ‘top talent’ from big tech in order to deliver those ends. They’ve sleepwalked into a market where they can now very plausibly fail and for many, it’s the first reminder that crashes happen and startups carry greater risk. This risk recalibration isn’t necessarily a bad thing for startups. Rather, it will spur a rebalancing of the risk-reward structures in company building.
In the short term, it’s certainly good for big tech and there will be a movement towards those companies who offer stability. Startup talent teams should look to Greylock’s guide on startup storytelling to hone their pitchcraft in a risk-averse market. It’s an invaluable tool in presenting to technical candidates who could go elsewhere for greater financial return and stability. Enterprise recruiters should be leveraging their stability across touch-points in the employee journey.
3. The talent brands that make it through this upheaval will be defined by the way they communicated.
Companies will lay people off and concurrently fundraise during this downturn. The former can actually ease the latter, which is uncomfortable for both departing and retained employees- but we’ll see it. How leaders communicate that- and the other difficult conversations that have become increasingly frequent- will have huge ramifications on their future hiring and talent brand. There is no point navigating the storm if you come out on the other side without any advocates. For a superb example of leadership and taking ownership during the upheaval, see this post by Carta’s CEO Henry Ward. Acknowledge the challenge, take accountability and own the solution.
4. Upgrade your recruiter’s data fluency.
Talent teams of all shapes and sizes are still hugely constrained by poor data skills. Unless you’re Amazon or Google and boast a world-class analytics function within People and Talent, chances are your recruiting team are to some extent accountable for their own data handling. Making deductions with statistically insignificant sample sizes is rife in recruitment. Changing multiple variables at once and deducing ‘effect’, even more so. These practices are too common. Data fluency is important because it’s about saving time in your searches, predictably succeeding and being able to consistently replicate hiring outcomes. Any startup or scale-up worrying about burn rate and runway- now, or later- needs those three things from their talent team. In a time of cost-cutting, more efficient hiring is mission-critical. Data fluency drives that efficiency and the ‘Data for Recruiters’ workshop we run at Talentful provides a comprehensive course in doing just that.
If that’s something you’re interested in, please reach out.