Building a great startup requires an amazing engineering team, and this is increasingly challenging and expensive for U.S. and Western Europe startups, where the competition for highly-skilled technical talent is fierce and growing. To scale up, startups must get in the ring with Big Tech firms, but how can they compete against companies with deeper pockets and big brand names?
We’re living through the greatest age of software development talent shortage. The lack of high-caliber employees has doubled in the past decade, while the demand for innovative IT solutions continues to grow. Nearly every startup is either deeply technical or a tech-enabled business, and an extremely tight recruiting market combined with high salaries for leading engineers makes it difficult for upstart businesses to build a great team in the US or Western Europe.
The competition for a skilled workforce is no new thing. In 1997, the term “war for talent” was coined by Steven Hankin of McKinsey & Company to refer to “an increasingly competitive landscape for recruiting and retaining talented employees”, and this challenge has grown exponentially since then. Recruiting a great team is difficult, retaining the team is expensive and software developments are highly mobile and more confident about switching jobs than ever before.
According to DCI’s 2019 report, 40% of the surveyed participants admitted checking new career opportunities weekly or even daily. The attitude towards job-hopping has changed - great engineers have many job options, and they won’t stick around just for a competitive salary - they want technical challenges, mentorship, career opportunities and the chance to make an impact in the world.
According to LinkedIn’s study on job switchers, more than 54% of technology specialists leave their companies because of the lack of career development. Other top reasons for quitting include poor management, wrong cultural fit, the absence of challenging work, dissatisfaction with benefits and a lack of recognition and rewards.
Does it mean that startups aren’t able to stand their ground in the war for talent? Not at all! Big Tech companies (Facebook, Amazon, Google, etc.) certainly have a head start because they can offer very high salaries, excellent training and luxurious perks, but startups can successfully work with the world’s top developers if you play your cards right. Here is how you can do it.
Whether you’re going through an explosive growth or just starting out, these strategies will help you take the lead in the hunt for talent.
Startups score an advantage through speed and innovation - and this starts with the recruiting process.
In the pursuit of meaningful work, tech talents prefer companies whose mission they understand and that resonates with them. Mission-driven employees have a higher sense of purpose and commitment and are more likely to stay with their current company for a longer time. Challenges also play a huge role: as we’ve mentioned above, lack of challenging tasks is one of the most common reasons for tech talent to leave.
James C. Collins once said that “great vision without great people is irrelevant”. At the same time, you can’t engage passionate and interesting individuals if you have nothing to offer. This is especially true for startups whose strong points are vision and opportunity.
To win talents over, make sure to take these steps first:
Finding driven talent becomes easier if you show your own dedication to the cause.
Top developers know other top developers and your employees can be your best recruiting pipeline. One of the best things about happy and engaged employees is that they can help you build a talent pipeline by referring their friends and former colleagues. With that in mind, it’s crucial to design an employee referral program in your company to reward staff members for every successful hire.
In addition to referrals, engaged employees can have a positive impact on the overall image of your startup as well. With the overwhelming popularity of social media, people are eager to share their thoughts with the world online. About 50% of users post content related to their work. These are the people who are very likely to become your activists. As such, they are highly engaged and tend to promote your company in both social media and real life, especially if they enjoy working for you.
Employees humanize your company and make you stand out among other businesses. Letting them tell your story and how they contribute to it is a great way to make people feel connected to your company. Empower your employees to represent you and showcase their achievements, be it a blog article or podcast, and you’ll be on your way to establishing a sterling reputation as an employer.
As talent acquisition becomes more competitive, startups can turn the tide by reaching out to talent pools outside the United States which can be lower cost yet just as strong as U.S. and Western European software engineers.
Some enterprises resort to traditional outsourcing as a project-based model and delegate peripheral tasks to a third-party services provider. However, it’s a short-term solution that doesn’t work well for startups (you get the work done — but not the team behind it!). Further, you retain little to no control over the development process.
To scale up and retain tech talent, startups should integrate offshore software engineers into their long-term workflow. The simplest way to do it is to engage a talented offshore dedicated software development team. The “dedicated teams” model of offshoring is much more flexible and transparent than old-fashioned outsourcing as it allows you to extend your in-house team with international talents that are fully committed to your mission.
Below you’ll find a list of features that sets dedicated teams apart from outsourcing:
In a nutshell, dedicated teams can be a one-stop solution to the talent war. They work best for long-term projects (such as startups building large, complex platforms) — and give you a significant edge in the war for talent. To give one example, our partner DigiFi was able to scale up with Satellite’s dedicated team from Belarus, reduce per-person costs by over 70% and grow their team from 4 to 17 developers in just a few months.
Competing with Big Tech is hard and can be expensive, but any Goliath can be beaten. Leverage your strengths, such as mobility, growth opportunities and a powerful mission, and consider a dedicated offshore team that provides the benefits of leading talent, lower costs and increased speed. If you’re interested in learning more, please contact Satellite and we would be happy to speak!
Develop and scale your amazing software product with Satellite. We help you build a dedicated development team that works as a natural extension of your company.