A startup cannot prosper without a highly motivated and competent team. This is common knowledge, however, attracting top talent to your early-stage startup is much easier said than done. The best talent in your industry knows how much they are worth.
A recent study showed that the top three reasons people are quitting their jobs are better pay, a more personally rewarding job, and burnout.
In order to succeed in the market for startup talent, founders must understand the advantages they have compared to established corporations.
This article provides practical advice on how to accomplish this goal by addressing the three top reasons quoted in the study – the three top motivating factors.
To attract top talent, it’s crucial to offer competitive compensation. While startups may not have the same resources as established corporations, there are two ways you can address this.
First, you can raise capital and offer a competitive salary. Early-stage startups can prioritize building a top-tier team, even if this would make them unprofitable. The potential for high returns, in the long run, can justify higher salaries.
Second, if raising capital is not feasible, offering equity in the project or employee stock options can be an attractive alternative. This approach is not as cash intensive while providing the potential for higher financial rewards if the startup succeeds. Although it involves diluting the founder’s share, it might be the only way you can attract top talent without having the money to offer them higher salaries.
Moreover, this approach aligns the incentives of the employees to the project much better than the competitive fixed pay, so it could result in attracting more motivated startup talent.
While attracting top talent is often about financial upside (immediate or potential), retaining startup talent is often about intrinsic motivating factors, such as purpose and a sense of belonging.
As a startup founder, you can offer such benefits much more genuinely compared to large corporations.
Most people desire meaningful work that has a positive impact. Startups can leverage their innovative projects to offer employees a chance to make a difference in the world. By tapping into this desire, startups can attract individuals who prioritize purposeful work and are highly motivated to have an impact rather than just getting paid.
Moreover, working in large corporations often makes employees feel like insignificant cogs in a machine. Startups, on the other hand, provide an environment where employees can have a tangible impact on the project.
Additionally, the small team size fosters personal relationships and a sense of belonging. During the hiring process, it’s beneficial to conduct interviews in the office and introduce top prospects to the team, showcasing the positive contrast to corporate culture.
Startups must prioritize preventing employee burnout, which is a common issue due to the sense of urgency and intense work environment. While productivity is crucial, long hours do not equate to higher-quality work. Finding the right approach depends on the specific circumstances of the startup, but constant crunch time is very dangerous in the long run.
Last but certainly not least, in order to attract top talent you need to be a top talent yourself. To attract and retain high-quality professionals, founders must demonstrate their expertise and professional attitude. While it’s not necessary to have more experience than the team, founders should showcase their competence and dedication to the project. Building trust in the founder’s leadership and vision is vital for potential employees to invest their time and effort.
This seems like non-advice, yet it’s very hard to keep high-quality professionals if you are not one yourself.
This doesn’t necessarily mean that you need to have more experience than your team. On the contrary – attracting people that complement your skillset and compensate for your shortcomings is a great idea.
However, you need to show your domain expertise and the professional attitude you have to the project. People wouldn’t be willing to invest their time and effort in a project if they don’t believe you have what it takes to pull it off.