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For this edition of the Forgepoint Field Guide, we caught up with Karl Sharman, Talent Management Consultant here at Forgepoint. Karl has helped build and scale teams across multiple types of business including Fortune 500, Pre-IPO late-stage ventures, early-stage startups, security consultancies and MSSPs. Before that, he was Head of Recruitment for the Southampton Football (Soccer) Club. You can read more about Karl here.
Karl, thank you for joining us today for our Field Guide for founders building early stage startups.
As has been widely reported and felt across industries, within companies of all stages and sizes – there’s a serious demand for talent right now. How are startups failing and succeeding amidst this “Talent War”?
We’re truly in the midst of a talent war. What was polite competition before is now intense, with candidates enjoying tremendous leverage as companies spend vast sums on recruiters and round out their employment packages with incredibly generous benefits in the scramble to fill gaps. I am seeing startups fail because they are not hiring the right talent, retaining the right talent, and not gaining enough talent to succeed in line with their company building plans.
Startups are losing out due to a number of common factors. In addition to having a clear and consistent understanding of a company’s internal needs, it’s about speed of process and execution – the actual decision making – which is the winning formula. If things take too long, you’ll lose candidates. Some companies know exactly what they want and how to get there, with the proper recruiting and assessment approach, set up, and instrumentation, whereas others aren’t sure and have no process or timeline, making the experience challenging for candidates who are in high demand and considering multiple opportunities.
Employer branding is also more important than people think, especially when a startup is up against larger, better-resourced companies that visibly invest in their image, corporate messaging, and the culture of the organization. Of Forgepoint’s portfolio, Noname is exceptional at this – they are very clear on what they do, their momentum and growth, that they’re a unicorn, and why they would be a great fit. They also publicly welcome new talent on social media, celebrate hires, and ride the LinkedIn algorithm for more exposure to relevant candidates.
I also see companies underinvesting in the candidate experience – making it an afterthought, when it should be a priority. Or they are so narrowly focused on closing a specific role that they can’t think further afield. Startups should
always be hiring – not just when you have an open role, but what a company needs in the next 3-6 months, 6-12 months, up to 12-18 months. Beyond that, markets and company growth are too transitional.
So what are the keys to success as startups build and scale their teams?
I break this down into four areas:
Talent attraction and the candidate marketing approach. In order to be the standout choice for candidates, companies need a cohesive and compelling strategy that includes
- Impactful employer branding and messaging: The story must resonate with prospective candidates, emphasizing the culture and values of the company.
- Efficient job descriptions: Ideally one-page job descriptions that clearly and succinctly provide the scope and expectations of the role and desired qualifications, with unbiased language.
- Multiple avenues for promotions: In addition to common channels include LinkedIn, Job sites, employee networks, and recruiting events, partnerships with recruiting firms, universities, and non-profit organizations can be helpful. Your investors might also have a job board like Forgepoint’s which we are launching this week.
- Well-resourced referral program: The cost of a hire is getting up to $20-25K per role depending on seniority. Offering a fraction of that to referring employees is obviously more cost-effective while providing access to their colleagues from previous companies who have high potential for relevant qualifications and cultural fit.
- Modern marketing tools: In addition to LinkedIn ads, use marketing and social media tools to generate content to drive inbound candidates.
Talent experience and moving at the right speed to execute. Build a process for candidates that limits pain, reduces risk, and generates success. This includes:
- First point of contact: That first impression is crucial for setting the tone for the experience.
- Managing expectations: Be honest & clear about the timing and the role.
- Candidate-first processes: The candidate is no different to a consumer. How do they prefer to be communicated with – via text, email, calls? In person when possible, or just virtual?
- Repeatable processes: Repeatability not only improves the experience for the candidates but also makes the process easier for interviewers while ensuring fairness.
- Candidate scoring: Having an agreed upon rubric or score chart encourages managers to evaluate carefully and consistently.
- Digital record of feedback: Keeping feedback records enables better hiring in the future as candidates come around again and to inform the process for other roles. Digital interview scoring systems or solutions like ‘Metaview’ can be especially helpful.
- Constant communication with candidates: Keep up the dialog! On average cyber and technology candidates are getting pinged by 3-4 recruiters per day.
- Back-channel in addition to references when you can: Back channeling allows a company to gain deeper insight and better manage risk.
Talent acquisition and hiring the best available talent in the quickest time. Found your ideal new team member? To succeed at closing, consider
- Who is the best person to make the offer? Who needs to be involved to close – company executives, or even investors?
- How should the offer be made? Based on your candidates preferences, would this be more effective by video or face to face?
- Make the right offer: Factoring in the candidate’s needs, the company’s needs, and the overall position for the next 18 months. Compensation is just the start: candidates are looking at the overall package which includes culture, leadership, and other factors.
- Others are looking for education and growth which is why many companies are now including education grants and tuition reimbursement.
- Ensure paperwork is ready to go after the offer is delivered verbally. Some fall through because of the delay. People are very visual in tech/cyber and GTM roles, and want to evaluate the opportunity immediately.
- Set deadlines on offers: candidates like to weigh multiple offers and lever against the market.
- Enable technology to automate: use modern ATS/HR systems. We’ve just stood up Thrive here at Forgepoint to help us help our companies.
I cannot emphasize enough how vital it is to be the choice for talent: this is a deeply personal, multifaceted decision. In addition to company leadership and momentum, candidates want to understand the objectives and responsibilities of the roles they’re considering, and be set up for success – they want to believe this is the best next career move for them, that growth and promotions will be possible. Candidates also want to understand the company culture they’ll be joining, which startups can share directly and reinforce through social media, marketing campaigns, and employee advocacy. They often relate to a company’s mission – I’ve seen this help sway talent towards a startup over a more immediately lucrative opportunity from a larger company or competitor. We actually have extremely talented folks with established careers joining our incubating startups because of Forgepoint’s mission to protect the digital future.
Thank you for this excellent and very practical guidance. So what’s crucial to retaining top talent? How do you identify at-risk employees?
Retention is naturally critical to how a startup scales. Some job functions naturally have high turnover (e.g. Sales), whereas others may bring heavy demand (e.g. Engineering) that lead to employee departures but in general, key success factors for this fourth area include
- Balancing structure and flexibility: ensuring enough structure and direction for employees with built in flexibility as the organization scales.
- Enabling strong leadership and growth: removing barriers to productivity including less capable managers and inefficient processes.
- Competitive compensation: staying on top (and ahead of) the market as necessary, with regular and spot bonuses rewarding performance.
- Committing to employee engagement and feedback: in addition to regular reviews, 360 reviews, and setting clear, mutually-agreed upon targets with meaningful incentives, finding ways to ensure employees understand their role in achieving business objectives and delivering on the mission of the company.
- Enabling employee development, and leadership participation: on top of how roles are scoped and evolve over time, are there opportunities for personal growth and channels to propose ideas.
- Looking out for at-risk employees: there are a number of red flags here. Do you and your managers have the right strategy and procedures in place to monitor key indicators of flight risk and prevent churn?
Ultimately, I’d argue the candidate experience should carry forth in the way organizations operate as employers: once the hire is made, delivering on the expectations shared in the recruiting process, cultivating transparent and empathetic ongoing communications, and continually reaching mutually gratifying goals are crucial. For a successful, long-term marriage with your very best talent, the courtship should never end!
This article is part of the Forgepoint Field Guide, an interview series focused on early-stage company building.
Questions or comments? Drop me a line at [email protected].
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