As the current market dynamics experience instability, a new sense of caution is in the air. Naturally, this leads to a lot of questions on our minds.
After VCs have begun to warn startups about longer runways and preserving their cash, every founder’s first instinct is to start cutting costs. And that’s understandable. Some of the biggest tech companies like Meta, Cameo and Uber are already slowing down their hiring plans, while others are laying off employees. But would it make sense for you to do the same?
What if we told you that following the example of other companies is not the way to go? Let’s put it this way: with these tech giants downsizing their hiring plan, your chances of success to hire the best talent have just increased. Less competition equals new opportunities to attract and hire scarce talent.
That being said, with the fluctuating market it’s only natural to be more aware of where you invest your money. And the same should apply to your hiring plan. So, here’s how you can prioritize roles and make your hiring plan flexible.
Have a look at your business targets & needs to decide what roles to prioritize
When it comes to deciding whom to hire, it all boils down to your mid-term targets. Have a look at what the core needs are to make those targets happen.
Outlining these targets and needs should guide you towards the roles, competencies, skills, and seniority level your company should focus on when hiring.
Let’s take the following situation as an example: your company has a 12-month runway to Series A funding. For that, you need to grow your turnover by 50% and implement key improvements in your tech product. These conditions affect the composition of your team. Let’s assume there are no commercial positions covered and you’re not fully satisfied with your tech team. While initially you may have planned two new hires, your budget only allows for one more.
Now, you’ll find yourself in a tight spot: will you hire a growth marketer to grow the business commercially or a developer to solve the key features of your product?
The answer lies within your responses to the following questions:
❑ What are my mid-term targets? What core business needs will help me achieve these targets?
❑ What kind of competencies and skills does the company need to achieve these goals?
❑ If I hire this person, what’s the impact on my business in the short and long term? Will it help me achieve these goals (return on investment)?
Once you have your answer, take into consideration the seniority of the role by looking at the type of goals or projects you have. Usually, senior, specialist roles are aimed at complex, more strategic projects, while medior and junior roles with high potential are for urgent and operational projects with more space for trial and error.
Focus on the uniqueness of the skillset
If need be, you can add another layer of prioritization to your hiring plan by looking at the uniqueness of the needed skill set. In a slower economy, hard-to-find roles should become the main priority, as the talent market is more fluid, and there are more opportunities and less competition to hire scarce talent.
❑ From the skills and competencies mentioned above, which ones are hard to find?
❑ How new are these skills in the market?
❑How scarce is this position on the market? Can you find the right people to fill in the role?
For the latter, you might need to perform a talent mapping to get a clear answer. Talent mapping consists of identifying and profiling potential candidates and understanding the internal and external competitive landscape.
So, if the markets slow down, should you stop hiring?
Unless your solution doesn’t address a real market need anymore, there’s no reason to stop hiring completely. And if that’s the case; maybe think about what your purpose is as an organization. Talent eventually generates everything of value or adds to it: the product, the brand, servicing customers, traction, the culture, making sure lunch is served
When the market slows down, you might not have time as a startup to simply wait until the economy picks up.
Surely, you can extend the cash runway, but then you will be operating on borrowed time. In that sense, it’s better to focus on adjusting your goals to the new situation and then hire to grow.
Building your team, while lowering costs and achieving the targets for your next funding round is no easy task. However, we’re here to support you every step of the way, so feel free to reach out to us for any questions related to your hiring plan.