Let’s call out the elephant in the room. We may not officially be in a recession yet, but the market we’re operating in is incredibly different right now.
Over the past few months, we’ve seen hiring freezes and layoffs, as well as VC companies taking caution with where they put their cash and telling portfolio companies to find a “path to profitability”. Gone are the glory days of 2021 when valuations were sky-high, VC investment almost doubled and close to 600 new European unicorns were created (compared to just 167 in 2020).
But whilst some tech companies are making cutbacks, this won’t be the case for all.
A Lesson from History
History tells us that some of the most successful startups of the last decade were built during a recession – Air BnB, Whatsapp, Uber. Downturns are cyclical and as such, one of the most important things to remember is to keep things in perspective.
Whilst you can’t control the market, you can continue to scale – and even thrive – during the current climate. Here I share some thoughts on how.
Get Your House in Order
When things get tough, there’s no better time for reflection. Re-assess your goals with the market conditions in mind.
Are they realistic? Or do you need to re-evaluate? Do your headcount goals still make sense – for the rest of the year and into 2023 too? How is your financial stability? Could you strengthen your proposition? Gain efficiencies across functions?
Don’t be afraid to go back to the drawing board, do your due diligence and scrutinise your plans. Scaling isn’t just growth from a team size perspective. It can be operational too, so now is the time to “get your house in order” so you can move faster and emerge stronger in the long run.
Make Workforce Planning a Priority
Once you’ve validated that your headcount goals are accurate, you need a robust workforce plan in place. Shaping your team is like a puzzle, with each piece – or person – needing to be the right fit to make the greater picture work.
With this, ask yourself:
- What skills do you need to succeed?
- Do these exist within your business already? If not, what do you need to hire and by when?
- Where can you find this talent?
- How will you recruit them in the timeframe needed?
- Do you have the capacity and capability to do it yourself?
Being data-driven in workforce planning means you avoid “finger-in-the-air” guesswork. You reduce the risk of overhiring and can have confidence that the roles you’re recruiting for are 100% necessary.
Many startups fail due to not having the right team in place at the right time. Planning ahead and ensuring you have the expertise and resource in place to fulfil your recruitment needs is critical.
Once you’ve validated your workforce plan, ask yourself – is the demand manageable by your existing Talent Acquisition team? Or do you need specialist interim support – such as an embedded talent partner – to enable more reliable, quicker scaling?
Explore your options and don’t be afraid to lean on the experience of mentors, advisors, and potential partners who have been there and done it before.
Don’t Rest on Your Laurels
If your Linkedin newsfeed is anything like mine, it makes for some challenging reading. Recent large-scale layoffs give the impression there’s an influx of candidates on the market. Many assume it’s going to be easier to hire.
But they’re wrong.
In turbulent times, top candidates are often hesitant to jump ship – with the risk of moving perhaps outweighing the reward. Your employer brand and EVP (employer value proposition) need to be rock solid – authentic, transparent, and clear. It’s still a candidate-driven market, so be prepared to have the tables turned in interviews. Now more than ever that brilliant engineer you’re desperate to hire will likely probe your strategy, long-term vision, financial position and more.
Deeply consider whether what you offer is competitive for the type of talent you want to attract. With the rising cost of living and inflation, candidates will seek flexibility and security.
Have you benchmarked your salaries suitably for each role? What are you offering by seniority and location? What’s your stance on remote working? Could you explore additional benefits such as healthcare insurance or utility bill contributions?
And don’t lose sight of the human side of what you’re offering employees. A positive work environment, feedback-driven culture, freedom to innovate, and alignment with your purpose for example. Bring these aspects front and centre of your EVP and bake them into the candidate experience as well.
You Do You
It’s incredibly noisy out there right now, meaning it can be easy to get distracted, panic, or follow the crowd. But I’m a big believer in moving in the direction and pace that’s right for you. Only you know what this looks like for your company, which is why taking the time to reflect and “get your house in order” – should be the first step.
