The business needs talent to grow, but good talent is expensive?
This is a Catch-22 situation that startups have to face on a daily basis, especially if they are self-funded or have limited funding. But startups, by design scrappy and persistent, find ways to work around this challenge.
The work-arounds usually are hiring interns or freshers, giving equity or springing for expensive talent from their own pockets. These are all options that could work under some circumstances, but have limitations.
Current work-arounds for getting high-quality talent inexpensively have their own limitations.
- Interns and freshers can be great for certain kinds of roles that don’t require a lot of expertise or where the business can afford to invest in their learning. Large organisations can, and in fact, benefit from training someone not just skill-wise, but also to root them in the company culture and ways of working early on. However, startups need talent that can be productive as of yesterday and a lack of the right skills for a growing business even for a few months has a far reaching adverse impact.
- ESOP options can work for the core talent, the next layerand the functional heads. But beyond that, a growing business also needs a pool of experts who can carry on daily operations without having to or wanting to be invested in the business at that level. Substituting remuneration for equity may not be a great idea for all of the various, diverse, talent needs startups have.
- Founders in many cases tend to pay out of their pocket to afford good talent; this can work to an extent but it does limit the ability to hire for all the skills that the business needs, and takes away cash resource from other areas that might need it, such as building tech, capex, working capital, marketing and the like.
- And finally, founders sometimes stretch their existing teams and themselves in the absence of talent or the right skills in the team, which has its limitations too. Beyond a point, both the stretch and the lack of expertise will start to catch-up and compound. People like to do things that they either are good at or that challenges them to move in a direction of their choice; having to do another’s work that fits neither of these two, consistently and without an end in sight, is not likely to be great for motivation or culture-building.
There are several other hiring challenges that startups face.
Hiring good talent in an affordable manner is of course one of the biggest, but there are other challenges.
1. Hiring specific skills
Connected to the problem of hiring in an affordable manner is hiring for the exact skills the business needs.
For example, a sales professional who has made his career selling financial products to HNIs, will not do a great job at selling SaaS to startups. Not at first anyway, and then with some training,he may be able to catch-on. Similarly, for Digital Marketing, a D2C experience looks very different from a B2B one.
Today, even content writing is specialised, a Parenting start-up might want somebody who can write in a warm manner on specific topics, as opposed to a B2B startup that would do well to hire a writer whose style of writing is more professional, who tends to do more research and can cover a wide range of topics.
With competition only getting more intense, having the right skills in the arsenal is a huge competitive advantage both in terms of speed and quality. Of course, these are more difficult to find, gauge and definitely tend to be more expensive.
2. Hiring on-demand
Startups are driven by innovation, which means they have to run MVPs, try new models, enter new geographies, launch new products and services, and be prepared to either scale them or pivot depending on the feedback. This means a high degree of agility and entrepreneurial thinking that needs to extend to talent hiring models as well.
Quick hiring, and quick scale down, both are essential features that drive an entrepreneurial ecosystem forward. The most prevalent model that of traditional and full-time hiring, is often not the answer.
So, what can a growing business do to overcome these challenges?
Hiring for the skills you need, affordably and quickly is the gist of the challenge here, and there are ways in which a business can get all of these and more, if they are willing to look beyond traditional hiring at the flexible talent economy.
The flexible talent ecosystem has grown by leaps and bounds in the last few years. With talent from across multiple functions and sectors choosing to work flexibly and with more and more digitisation and technologies that support flexible work, we have seen that today the gig economy has transitioned to the flexible economy.
There are multiple facets to the flexible talent economy.
Wide variety of skilled and expert talent
Today, one can find all kinds of skills in the flexible talent economy, be it for core functions such as Sales, Marketing, Investment banking, or for Content, Design, Tech, nothing is off-limits. The talent in question comprise largely experts with different motivations for working flexibly.
It could be that they cannot or do not want to work in the full-time workforce due to their life-stage and flexible working, i.e., part-time and/or remote working allows them to balance their professional and personal aspirations; or, it could be because they prefer variety and independence over job security and therefore choose to work across a wide variety of projects and industries to keep themselves at the cutting-edge.
There is also an emerging segment of those who seek balance out of choice, and want to use their off-hours pursuing hobbies and projects of passion.
This variety in talent and skills means that startups can hire for all sorts of roles from this highly expert pool, and get people who will be productive from the beginning without needing much training.
Choice in Engagements structures
There is a lot of flexibility and choice in structuring engagements in a manner that works for the business. Ranging from two-week projects to two-year long roles, anything is possible.
A common thread that runs through all engagements is the contractual nature of it, and the fact that most of them have some or the other form of flexibility such as part-time or remote-working baked into it.
Pay-per-time-needed Pricing models
Connected to the structuring of the engagements are the lean pricing models that allow a business to pay only for the time or output they need. A business could hire part-time talent to work for 75%, 50% or 25% of the traditional work day, paying also only for the time they are hiring for.
Similarly, a project can be paid for basis the number of hours consumed with an agreed per hour rate, as per milestones, or as per output.
result in efficient pricing models that help a growing business keep costs in check while still getting the required skills and expertise.
Quick hiring and short duration contracts
One of the most important aspects of the flexible talent economy is the agility in hiring it enables.
You can hire someone within one to two weeks or even lesser time depending on the role; you can scale-up as quickly in-line with seasonality, demand peaks, or external circumstances; and you can scale down your team in times when something unplanned happens, the biggest example of which is the current pandemic we are all living through.
Most hiring arrangements in the flexible talent economy have various aspects of agility built in, such as business-friendly notice periods, trial periods, short contract durations, and such.
These give wings to an entrepreneurial and experimental mindset at a startup, and help small businesses be agile and competitive while keeping costs low.
Other benefits of flexible hiring
Remote-working is an essential aspect of the flexible talent ecosystem and there are specific benefits of those for businesses. Now that almost the entire world has run an MVP in remote-work, every day we hear about businesses, large and small, choosing to integrate this way of working into their long-term plans.
1. Higher productivity
In big cities that usually are the startup hubs driving innovation, the time taken for commuting can comprise up to four hours of an employee’s day. By hiring talent to work remotely, employees and companies get to save on this time, which can then be used for other more productive work.
Additionally, while working from offices has its advantages, it can also be very distracting with constant coffee breaks, chats with co-workers, and frequent meetings that can disrupt productivity.
On the other hand, employees who work from home often tend to work that much harder to prove themselves, thus multiplying the benefits.
2. Lower costs to the company
Remote talent hiring results in fewer people in the offices, thus doing away with the need to have large office spaces. The cost of office material, furnishing and utilities also reduce – a godsend for startups which are looking to utilise their funds more efficiently.
3. Better rates of retention
By allowing their staff to work remotely/from home, a business enables them to incorporate other essential activities such as exercise, family time and time to follow hobbies/personal interests, into their work lives.
This in turn makes them happier, more satisfied, and more likely to stay on with their current jobs, leading to lower rates of attrition.
4. Access to new talent pools
By hiring remote talent, businesses unlock new talent pools that are outside the traditional workforce, such as qualified women looking for flexible opportunities, or those who freelance by choice.
Remote hiring also overrides geographical limitations thereby enabling a growing business to hire the best talent available, with no constraints on where the talent may be situated.
There are several case studies now that depict how startups and other businesses have used the flexible talent economy to meet their talent and growth objectives.
If you are a business with the ambition to grow quickly and affordably, you might be well served to consider these models and integrate them into your talent hiring strategy.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)