How can start-up founders compete against tech giants in attracting talent?

15 Jan 2020

Images: © fizkes/

While hiring friends and acquaintances might seem like a no-brainer when you’re running a start-up, it can lead to a homogenous workplace culture.

This week, the Hays Tech Start-up 2019 Report highlighted some of the major obstacles that tech start-ups and scale-ups are having when it comes to attracting and retaining talent.

With tech giants such as Google, Facebook and Microsoft located in Dublin, it be hard for small companies to get the attention of not just engineers and developers, but also sales and marketing talent. It can also be difficult for these companies to compete with the salaries and benefits offered by some of the biggest names in tech.

Of the 114 founders surveyed by Hayes, 71pc said that they had difficulties when hiring or trying to hire staff over the last 12 months, with 14pc saying that these difficulties were ‘extreme’.

So, what do start-up founders need to do to attract and retain talent in 2020?

Start hiring people you don’t know

In the Hays survey, nearly half (48pc) of tech start-ups cited friends and former colleagues as a main source of employees and candidates. A similar number (46pc) said that specialist websites and job boards are the way forward for hiring, and one-third said that staff referrals are the best source.

Although personal and professional networks seem to be the most popular source for candidates, 65pc of respondents said that they prioritise having a diverse workforce and use inclusive candidate attraction and selection strategies.

Almost a fifth (19pc) said that they do not prioritise diversity and inclusion at all when attempting to attract and hire employees.

Hays noted the benefits of sourcing candidates through existing networks but also highlighted the potential pitfalls. “Using such a limited channel to procure candidates can lead to two problems: missing out on excellent talent outside your network that could make a tangible difference to your business, and, in seeking to create a seamless workplace culture, you could create an overly homogenous workforce,” the report said.

“Start-ups and scale-ups rightly pride themselves on being innovative and creative, with employees who are unafraid to think outside the box. Casting a wider net to find candidates and therefore building a workforce that better enables diversity of thought are therefore no-brainers.”

Culture isn’t just a buzzword

During its research, Hays found that 74pc of start-up and scale-up employers think that candidates choose their company over others because they strongly believe in the product or service that the company is aiming to deliver.

Of the founders and employees surveyed, 71pc also said that opportunities to be innovative and creative at work were a big pull factor and 66pc said that opportunities to grow skillsets are important.

Of all of the founders surveyed, only 17pc believe that their salaries and bonuses alone are enough to draw employees to the company, and only 9pc said that their benefits offering is the reason why people choose to work with them.

Almost a third (31pc) said that they do not offer any benefits to employees. Those that do offer benefits use strategies such as offering more than 28 days annual leave, training and professional certification support, or health insurance.

While benefits with a monetary value aren’t a priority to every company Hays surveyed, 89pc of the start-ups and scale-ups said that they offer flexible working options. When asked what they liked most about working in a start-up or scale-up, the respondents commonly used words like ‘freedom’, ‘opportunities’, ‘flexibility’, ‘culture’ and ‘creativity’.

Can culture matter more than salary?

When it comes to competing against more established organisations for talent, Hays said that culture is key.

“The freedom to make bold decisions, the excitement about offering disruptive new products and services, the opportunities to learn and progress one’s career at a rapid rate, the creativity to think differently and the flexibility to work in a way that yields the best results.

“These factors should all be stressed to candidates throughout your recruitment process, from job adverts through to interviews and onboarding. However, that is not to say that employers should not be aware of the market rate for different roles and, where possible, recognise that benchmarking their salary and benefit offerings will help attract employees.”

So, what does Hays recommend?

Following its research into the recruitment habits and expectations of start-up and scale-up employers, Hays emphasised that being forward looking and planning ahead is essential, and hiring quickly can be make or break.

The recruitment company said: “Outline your business challenges and priorities in order of urgency and establish what roles will help mitigate these the most.”

As noted above, employers should try to “fish from a bigger pool” by seeking candidates outside of their personal and professional networks. Hays said: “Diversify your talent attraction and hiring strategy, and work with experts who can help find candidates who may offer new and exciting skills and perspectives to your business during these vital early days.”

Hays added that you shouldn’t underestimate a good fit. Hiring someone who is a bad fit for the company can, at worst, be a recipe for lower morale and, at best, be a waste of time. “The repercussions of hiring someone who is a bad fit can be devastating for your start-up or scale-up, including the costs of hiring and onboarding them.”

The recruitment firm also said that start-ups and scale-ups can play to their strengths. While more established organisations can offer higher salaries, small tech companies should aim to benchmark their salaries and offer a good remuneration package.

“You can also work to mitigate the impact of this by establishing a clear employer brand which focuses upon the many benefits of working at a start-up or scale-up, such as greater freedom and autonomy, working on an exciting and disruptive product, and excellent opportunities for career progression,” Hays said.

Kelly Earley was a journalist with Silicon Republic