The pandemic has transformed work in radical ways, bringing the future rapidly into the present. Remote work has proven viable in all kinds of traditional industries that previously resisted it–while in the office, open floor plans are vanishing due to Covid-19 safety precautions and their unpopularity with workers. Most importantly, talent shortages in the tech industry, particularly for engineers, have emboldened workers to set non-negotiable preferences during the recruiting process, meaning employers no longer hold the bargaining power.
“You’d be shocked how many messages, on average, my team sends out to engineers all day, every day. It’s aggressive,” said Kaleb Dumot, founder of Integrity Power Search and a speaker at a recent Battery “State of Talent” event for CEOs and heads of HR. For a senior-engineer position, “we have to reach out to three, four, sometimes 5,000 candidates to build a proper slate of people to interview for our customers.” Dumot’s recruiting firm aims to interview 40 – 60 candidates itself, so it can present the top four to six candidates to the client. Previously, Dumot said, he could build this short list with initial outreach to only 500 candidates.
That was just one startling example of the escalating war for technical talent shared at our virtual talent event, held earlier this month for our private-equity portfolio to drill down into the current state of the engineering labor market against the backdrop of Covid and work-from-home trends. In addition to Dumot, featured panelists included executives from Curve Dental*, Clubessential* and 1WorldSync*, all of whom shared tips and insights for how they’re retaining and hiring new talent.
The main takeaway: These days, employer leverage has waned, and sought-after engineers are holding more cards than ever. But there are tactics companies can employ to snare the best talent in this incredibly brisk market. Here are some of the key points from the discussion.
1. A flexible work arrangement is no longer just an option — it’s a must.
“Engineers, as a whole, are demanding remote flexibility,” said Dumot. A trend he noticed five years ago has accelerated with Covid: Many technical people “really despise working in an open environment, for the most part. There are too many distractions . . . They just can’t focus to build and write code and solve problems when they’re in the office.” Because of this leverage, they’re demanding the flexibility to work from home.
The implication is clear: Now that the pandemic has proven WFH as a viable option, it’s almost impossible for companies to accomplish recruiting goals if they don’t offer remote work or flex options.
2. Workplace culture still matters — regardless of where work takes place.
Workplaces no longer look the same, but the need for a company culture that prioritizes the health and well-being of employees has never been more important. Zoom fatigue and disconnectedness have plagued everyone. A strong work culture will ensure that people remain connected across the company — not just to their teams — by offering creative ways to engage employees beyond virtual meetings.
Companies also need to implement plans to control burnout. As the pandemic persisted this year, some companies observed there was too much productivity because workers were stuck at their laptops all day with no distractions. Work-life balance has gotten badly out of whack. Employees need help drawing clear boundaries to do their very best work.
3. Quality talent pipelines require investments in professional development — before and after candidates are hired.
Whether dealing with recent college graduates or more-veteran employees, companies need to focus on retaining top talent and taking concrete steps to avoid churn. A few specific considerations for developing talent include:
- Emphasizing the interesting problems companies’ engineers solve, as well as the opportunity to work on modern tech stacks.
- Laying out a clear roadmap for junior-level engineers so that they can envision their career progression. This includes expanding the pipeline to cultivate in-house talent. Eileen Timmins, VP of HR at 1WorldSync, firmly believes that career pathing works. An employee “can start out as a junior engineer, move to become a solutions architect, potentially. Or someone from customer success can become a solutions architect, where they’re learning the product really deeply, and then aligning to sales,” she said. “We’re starting to build that right now in the engineer team on bringing in more junior staff.” Timmins frames the trade-off this way: “The question is: do you invest now with time and training, or do you invest in compensation at a higher level to bring the right people in at the right time?”
- Pairing junior-level engineers with senior-level employees who are just as interested in coaching as they are in doing the work.
- Creating opportunities to collaborate on extracurricular projects or bring an idea to fruition — things that allow employees to innovate. For example Curve Dental’s “lab” program pairs junior and senior engineers to collaborate on an extracurricular project. “They’re able to create a prototype of what their idea is. It certainly has to be something that’s relevant to the business, that we could potentially use in our product,” said Suzanne Henderson, Curve’s CTO. “It excites some junior engineers to say: Hey, this is something cool and exciting that I can do with a more senior person that isn’t directly related to the team I’m on.”
- Creative sourcing tactics are key. Some panelists reported solid success recruiting junior engineers via bootcamps, though others had more mixed experiences. Reaching out to engineers who aren’t looking for work, or who live in non-tech-havens, can also be smart.
4. Compensate quality workers before it’s too late.
Quality candidates will receive counteroffers — and if they accept them and nothing changes at their old job, chances are they’ll be back on the job market in a few months. Companies must offer competitive market rates to attract and retain the best.
“You have retention issues all across your team, but your high-performing junior talent has more. You have to actively work to keep that team engaged, and a lot of that just starts with compensation,” said Jason House, CTO of Clubessential. “You’ve hired them right out of college at an entry-level wage for engineering, and you can’t just rely on that annual merit increase that they may be 9 months away from, or even 14 months away from depending on where they land in the cycle.”
House recommends moving junior-level engineers between teams to experience a wider variety of product spaces and discover new areas and interests. He summarized the winning formula as follows: “Give them lots of opportunities, lots of peer mentorship in different teams, and then just keeping the comp current as they move forward.”
It’s also critical that employers pay close attention to the work habits of top performers so that they can spot when workers seem to be losing interest. This will enable companies to provide compensation increases and other incentives before those workers give notice.
5. Refresh and refine recruiting processes.
All our panelists agreed that prolonging the interview and hiring process doesn’t make sense if their companies want to attract top candidates. One tip: Shorten the interview process to three days to create a much faster and appealing hiring cycle. It’s also helpful to move away from at-home programming tests and more to live whiteboarding during the interview. This enables employers to gain a better understanding of candidates’ problem-solving skills without asking candidates to do a lot of time-consuming homework for free.
Companies can also open the talent pool by removing the bachelor’s degree requirement, engaging H1B visa transfers, and being open to offshore talent now that remote work has made it easier for people to work from any place, in any time zone.
The war for talent has never been more fierce, but creativity and flexibility do work to accomplish your recruiting and talent goals. Battery’s Talent+ Recruiting team stands ready to help, whether you’re scaling up on your sales organization, enlisting a recruiter or making a C-level hire.
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*Denotes a Battery portfolio company. For a full list of all Battery investments, please click here.