Last updated on November 28th, 2022
In 2019, the USA alone is expected to spend $1.46 trillion on technology. Software is becoming central to business operations and creating a digital business model. As the need for software products and solutions grows, so does the need for talented folks to design, develop, and test it.
In fact, it’s become so that only those companies with top tech talent will succeed. Access to technically-skilled resources is fast becoming a differentiator that sets successful companies apart. One pointer to the truth of that statement is a look at the recent acquisitions where the skill of the technology team in the acquired company has been cited as a key reason driving the deal.
But with the big brands being extremely focused on absorbing top tech talent – offering fancy work environments and far more lucrative salaries – startups have a tough time hiring the talent they need to grow and scale.
So, what’s the obstacle in the hiring strategy of these startups, and what can they do to access top tech talent?
Why startups have a tough time hiring tech talent?
No matter the industry, hiring is always a challenge. But for startups, it’s all the more challenging. How can a startup in the Silicon Valley hire top talent? As a young company, with little experience, no major clients, and limited cash flow, hiring is hard for various reasons. Picture this: with no history to showcase, no employees to talk to, and no projects to boast of, how do you convince tech talent about your capabilities? How do you get them to trust your competencies? How do you guarantee an enabling work environment, a helpful team, the required benefits, and a stable career?
I often meet startups looking to build world-beating products. What’s common to most (all?) of them is that their founders are overwhelmed by the pressure to deliver. It’s always all hand on deck, full steam ahead, and the founder’s nose to the wheel. This is mainly because of their inability to hire top talent and scale their teams. One might think that it’s because startups usually have a cash crunch, and do not have the capital required to hire people. But that’s not entirely true. In most of these cases, the startup has the intent to hire but is unable to hire the kind of or the number of people they need.
Of course, with competition getting so intense in the software industry, recruiting talent before your competitor is incredibly hard. Considering how the hiring market is set up, these startups are unable to compete for the quality resources they need. When prospective candidates have everyone from Google to Uber fighting to hire them what chance do they stand?
With 133 million new roles expected to emerge by 2022, it’s natural for these biggies to cast their net wide, and rake in the best talent – draining the market of top tech talent, leaving little for startups to choose from.
What does work in their favor?
I know of so many startups that have been founded by people who have been in the industry for long and know how things work. The burning desire to become a founder, and a great idea for a software company is enough to drive them to start one of their own. But how do they get started? How do they make their presence felt and hire their first few employees?
Of course, what often works for such software startups is the founder’s aura. Great technologists with a history of being good people (and bosses) often find that folks who have worked from them earlier gravitate back to them. So, if you’ve led teams in the past, if you’ve built a good rapport with tech resources, if you have tech friends in the industry – you are in a good position. The skeleton of the team takes shape based on personal references and network. These folks believe in the vision of the founder because they believe in the capabilities of the founder. But what next?
Clearly, you cannot always depend on your aura or your contacts. This is neither predictable nor scalable. The next set of tech resources will look for a lot more than just a good rapport. They will seek the potential for longevity, they’ll look for challenges, an environment where they can grow, and the likelihood of being able to make a difference through their work. They will want the things that organizations provide -a great work environment, reasonable salaries, and the opportunity to grow. The scrappy startup will find it hard to provide that.
And with many of the things that used to attract people earlier (read stock options) losing their sheen, hiring and retaining top talent is becoming increasingly difficult for these startups.
How an offshore partner can help you get ahead?
In such situations, what has worked, for at least some of the companies I spoke of earlier, was picking a committed offshore partner to work with.
Experienced offshore companies boast of some of the top minds in that space. They have the skills, the experience, and they know what it takes to drive successful projects. Their exposure if wide as well as deep and they would have usually “been there and done that” when it comes to developing products.
The key for startups working with mid-sized offshore companies is to build a relationship that is meaningful and mutually beneficial. In those circumstances, almost always, the most experienced and brightest minds in the offshore partner will get allocated to the effort. And that is a perfectly acceptable and scalable option to get access to top tech talent.
So, if you’re struggling to get top tech talent for your young organization, consider partnering with an offshore vendor to get access to the resources you need to survive, thrive, and succeed. It’s an extremely viable option.