You’d think now would be the perfect time for a startup to thrive. As the economy begins to bounce back, a growing number of British workers are reporting they’re ready to leave the safety-net jobs that supported them through the recession – more than a quarter (26 per cent) of employees overall, according to one recent survey by CareerBuilder – and look for more eye-catching opportunities elsewhere.
However, a new report from the Startup Institute shows there’s a huge hurdle that many new businesses are struggling to jump over – the problem of getting the top talent on board.
Having a well-oiled workforce is fundamental to startup culture. A fledgling company might have an innovative product and a solid set of values, but it won’t be going anywhere without the right people at the right time. But according to the Startup Institute, nearly four-fifths (79 per cent) of firms’ founders struggle with staffing when they’re trying to get things off the ground.
Furthermore, around 40 per cent of respondents told the body this was a sink-or-swim issue – they’d have to cancel projects if they couldn’t find properly skilled personnel to pull off their ideas.
Surely, then, this looks like a job for the recruitment sector? If startups are struggling to find staff members, shouldn’t they be bringing in the professionals?
According to the survey, there’s only a small handful of new businesses currently tapping into the talent pipeline agencies can offer. An overwhelming 61 per cent of respondents said they brought in the majority of their new recruits through their professional network and referrals. This isn’t particularly surprising, as successful startups are often comprised of people who’ve already established their synergies. But what about the remaining 39 per cent?
According to the Startup Institute, nearly a quarter (24 per cent) of respondents said they hired candidates who had applied to them directly. A tiny six per cent sourced through recruitment businesses.
Clearly, then, there’s an untapped opportunity here. But before you approach a startup with the promise of perfect personnel – or indeed a candidate who might be willing to work there – there are a few things you need to be aware of.
Understand why people get involved in startups
Before you headhunt a potential candidate for a role with a startup, you should pay close attention to whether or not they’re really a good fit for the culture of that business. Though many Britons are reportedly looking to change jobs this year, some of them will be looking for higher salaries, fewer hours or changes in career – not necessarily the things your startup clients will be able to promise their personnel.
What makes a person a good match for a startup? According to Startup Nation co-founder Rich Sloan, writing for the Young Entrepreneur Council, there are three reasons: “One, they like creating, being part of something new. Two, they want to participate in the upside. Three, they want to live a meaningful life, and the closer you are to the success or failure of a business, the more meaning and purpose you feel.”
When you’re looking at potential prospects for a startup client, consider how well these characteristics apply. Are they fed up of the nine to five and ready for something more exciting?
Play up the perks of working for a forward-thinking company
Startups are typically unable to compete with bigger players when it comes to financial rewards. For this reason, when you’re trying to get a candidate interested in a position, focusing on the less obvious perks like flexibility and working culture.
A couple of years ago, a Cisco survey found two-fifths of recent university graduates said they’d accept a lower-paying job if it offered them the chance to work from a range of locations, letting them choose their own devices and access their social media pages. If a potential prospect tells you they’re more interested in lifestyle benefits than remuneration, they might be ideal for one of your startup clients.
Make sure you can finance your contractors and temps
The fact new businesses tend to struggle with cash flow isn’t just a problem for new hires – it’s also an issue if you’re supplying them with temporary talent. If a client turns out to be unable to pay a contractor’s fee on time, it could put your own business in a difficult position.
For this reason, you should signing up with a Sonovate for a flexible way to fund your contractors. Unlike invoice discounting or factoring, Sonovate’s solution has no hidden fees or heavy-handed contracts. We even handle back office functions like processing timesheets on your behalf.