How Startups Can Attract and Retain Top Talent

Introduction

The most significant contribution to a startup company’s burn rate (the rate at which they go through the money invested) is labor. This is specially true if you’re in any kind of R&D heavy industry, like technology. In order to grow at the rates many (if not most) sophisticated investors require, you must hire the best and the brightest. But how do you hire the cream-of-the-crop if you don’t have the finances to match the salaries or perks offered by larger, more established businesses?

In this article, we’re going to look at the best common strategies for attracting top talent to your startup. We’re then going to look at some novel and forward-thinking ways to help make skilled workers choose your organization over others. It will take so great incentives and rewards as well as a fair bit of creativity, but these ideas should help you draw in and retain the quality people you need to lead you to startup success.

Common strategies to attract top talent

It goes without saying there are a number of common, well-proven strategies companies use to attract and retain top talent.

Pay competitive salaries

If you have the funding and budget to offer salaries commensurate with the market, it’s a given you should. While salary is not the only factor in choosing a job, most people consider it before anything else. Do market research to see what other firms are paying for similar positions. Use salary calculators from sites like Glassdoor, Payscale, or Salary.com to see what’s competitive for your industry. If you can’t match your competitors, you’ll have to do the best you can while supplementing the salary with other incentives or pushing other attractive elements of the job.

What you have going for you is that many talented employees looking for careers at startups aren’t motivated by short-term gains from salary, and will therefore be more receptive to other forms of compensation and rewards.

Offer diverse compensation

You may find that many people are happy to take a smaller salary when they have the opportunity to receive a more diverse compensation package. This can include retirement savings plans, health and dental insurance, paid time off, and bonuses. Benefits packages can be customizable so that each employee can choose their ideal combination.

Naturally, for startups, options will undoubtedly be one of the primary incentives for attracting and retaining top talent. Options can be very attractive because once vested, if the company has a significant exit, or goes public, they can produce significant wealth opportunities.

Fast career growth

When you don’t have the budget for large salaries, and the value of options is still a ways off, there is one benefit you can offer seasoned professionals that could be just as compelling — a fast track to significant responsibilities, seniority, and the option to blaze a trail.

Someone who might be a senior director at a large global tech company might have the skillset and experience to be a C-level executive at a startup. This is a particularly attractive incentive for seasoned professionals who may already have had enough financial success where salary and options are less important than making a difference, or the opportunity to implement their vision in a way they may not have been able to in the larger organization.

Few people want to be stuck in dead-end jobs with no room for advancement. When candidates come looking, show them they’ll have room to grow in your company at a faster rate than a larger organization. It will be worth your time to actually plot out career road maps for each position you’re recruiting for. Though they may be theoretical and based on the assumption of startup success, these roadmaps can provide people with a clear picture of where their career could be in five to ten years. 

Create an invigorating company culture

Few highly skilled people will choose to work in a job that pays a great salary but offers unfavorable or uninspiring working conditions. So even if you can’t offer fully competitive salaries, perhaps you can provide a much better working environment. Focus on building and promoting a company culture that’s positive, inclusive, respectful, and flexible. 

A vibrant, inspiring, dynamic, and diverse company culture is a powerful magnet for attracting the best talent. As a startup, you’re in a position to create one from scratch. Take all your learnings from past jobs — what worked and what didn’t — and craft a dream environment. Naturally, include the basics that people expect in a startup environment: free lunch, plenty of snacks, and infinite amounts of coffee and tea. And it may seem cliché, but a foosball table or some other form of energy release is still valuable.

Photo by Mitchell Luo on Unsplash

But company culture is more than just the physical environment and free coffee.  Go the extra mile. Create a vision and mission for the kind of company and culture your startup represents. Companies like HubSpot have established a reputation for creating a culture code. Companies like Buffer have created a culture of transparency that’s matched by few others (they publish their employee’s salaries).

Creative and forward-thinking strategies

Most companies focus on the successful strategies we’ve just seen. To make your startup stand out from the crowd, here are other creative, forward-thinking strategies that can help you woo top talent.

Use diversity and inclusion to your advantage

Let candidates know that you value diversity and inclusion. Actively promote this in both your work environment and in your job ads. Go out and target specific groups who may otherwise be overlooked in the industry. Let them know you’re looking for a team that’s stronger because it’s diverse and more perspectives will lead to more robust success. 

Offer hybrid and remote arrangements

Since the Great Resignation of 2021 and the rise of working from home, more and more workers are looking for flexibility in their work location. If you can offer hybrid or fully remote positions, you’ll find far more candidates willing to accept a lower salary to get these benefits.

Focus on well-being

Burnout is real, and inflation affects more than just people’s wallets. Worker stress is a huge source of reduced productivity and job dissatisfaction, and that’s why more firms are focusing on well-being. Show potential recruits that you care with unlimited unpaid leave, wellness programs, mindfulness sessions, or even nap time. Subsidize online therapy platforms like BetterHelp or Talkspace. Have physical and mental wellbeing specialists come and provide education or discounted services.

Support career development and mentorship

Startup environments tend to attract entrepreneurially-minded talent. As such, there is a fair chance that people you hire now could have ambitions to pursue their own endeavors at some point in the future, especially if they’re exceptional at what they do. Instead of fearing it, lean into it. If you’re bold enough to embrace that reality, you can frame your job as a place for them to grow and learn before employees spread their wings. Mentorship programs are a great way to foster development and growth that will benefit both your startup and employees.

Alternatively, you could support an environment where that entrepreneurial drive is rewarded with leadership opportunities or more equity tied to their remaining with the company. At the end of the day, you want to create a place where employees feel they are always growing and developing.

How to find talent for your startup

Now that you have some insights into building an organization that can be attractive to the right personnel, let’s cover some effective strategies for finding them and getting them to apply.

Think like an inbound marketer

The best time to start “recruiting” for top talent is long before you post your first LinkedIn ad. Think like an inbound marketer and start building the brand of your company as a fantastic place to work. Lean into social media outlets like TikTok and Instagram to showcase your company culture (like the HubSpot Life IG account.) Populate the “About” or “Hiring” sections of your site with real photos of events, office space, portraits, etc. (Do not use stock photos.)

Vanayak Ramade of Instawork recommends thinking of the hiring process like a sales funnel, where recruiting = marketing, hiring = sales, and employee retention = customer satisfaction.

Be specific when recruiting on LinkedIn

When you do go to post that LinkedIn job description,  try using hyper-specific queries to find matches you might not be able to find elsewhere (e.g. awards won, industry papers written, combination of particular skills, etc.). 

Your network

Utilize your current network of VCs, investors, mentors, old colleagues, etc. Put the word out who you’re looking for, and don’t be afraid to ask for introductions to be made.

Hire skilled recruiters

Working with skilled third-party recruiting services can be a surefire way to find top talent quickly and efficiently. These companies have the resources, network, and experience necessary to find the most qualified and appropriate candidates. It may also be worth investing in a full-time experienced recruiter committed to helping you build your dream team. Such a recruiter or a dedicated “people executive” can also help you establish hiring and HR policies.

Develop creative referral programs

If you need great staff now, offer a bonus to any employee or recruiter who can get the right person into one of your positions. But even better than a lump of cash might be something more creative, like donating a lump sum to the charity of the referrer’s choice. This can scare off the money-hungry and focus on real, well-intentioned referrals.

~~~~

The three most valuable pieces of the puzzle when you’re creating a startup are MVP: money, vision, and people. So, while you may have a fantastic idea that will certainly be a hit and have even secured the funding to make it work, you still need incredible people to bring this idea to life. With a combination of tried and true strategies and some forward-thinking, creative ones, you’ll be able to draw in the top talent you need to thrive.