How founders should hire tech talent in 2025 | TechCrunch Disrupt 2024

Introductions

• Heather DOA is a partner of people and talent at Signal Fire, an early-stage venture capital firm focused on Beacon AI, a data platform that tracks data points around people and companies to inform investment decisions and hiring. Her role involves helping companies build high-performance organizations. (26s)
• Lauren Lovi is the talent partner at Capital G, Alphabet's independent growth equity fund. She has experience in executive search and focuses on organizational design, C-level executive hiring, and building strong, resilient C-suites and boards for founders. (1m1s)
• Roger Lee is the co-founder and CEO of Comprehensive, a company that provides compensation management software to help companies make competitive, fair, and transparent pay decisions. He also created layoffs.fyi, a website that tracks layoffs in the tech sector. (1m26s)

Remote Work vs. Return to Office

• The panelists discussed the topic of remote work versus returning to the office. It was suggested that the decision should be based on the company's needs, workforce, and leadership preferences. Remote work, hybrid models, and in-office work all have their own value, and companies should be prepared to adapt to remote work when necessary. (2m11s)
• It was noted that being remote-ready is important, even for companies with an in-office culture, as it allows flexibility for employees who may need to work from home occasionally. This adaptability can be a differentiator in the job market, especially when hiring becomes more competitive. (3m6s)
• The pandemic has created a challenging environment for businesses, making it difficult for founders to manage remote work effectively without proper foundations. A comprehensive guide on remote work, covering compliance and collaboration across different countries, is available on a blog. (3m57s)

Benefits and Drawbacks of Remote Work

• Intentional design of remote work processes is crucial for success. A startup named Comprehensive operates remotely within the US, which simplifies time zone management and collaboration. (4m30s)
• Remote work offers advantages such as easier talent attraction and hiring, as it allows companies to recruit from a wider geographic area. Employees who prefer remote work may be more inclined to join companies offering such flexibility. (5m3s)
• There are downsides to remote work, such as reduced real-time collaboration and team bonding. To mitigate this, companies can organize in-person retreats every few months to foster brainstorming and collaboration. (5m35s)

Remote Hiring and Compensation

• Remote work enables companies to hire from diverse locations, which can help build a more inclusive workforce. Companies can use hybrid work models to diversify their talent pipelines. (6m23s)
• In hiring, companies can benefit from remote work by being location-agnostic, allowing them to target talent from various regions without being restricted to specific cities like San Francisco or New York. (6m42s)
• Companies are becoming more competitive in hiring tech talent by offering remote work options, allowing them to consider a wider variety of candidates from different locations. (7m9s)
• Offering tier one US salaries regardless of location helps companies remain competitive, as they can attract talent from cities like Austin, Denver, and Salt Lake City by paying Bay Area or New York-level salaries. (7m37s)
• Hiring a distributed team has become easier with the availability of services like remote.com, Deel, and Oyster, which help manage international hiring and compliance. (8m21s)
• A tiered compensation approach can provide cost savings and competitiveness by adjusting salaries based on local market rates while still being attractive compared to those rates. (8m50s)
• Companies need to be clear about their reasons for hiring remotely, whether for cost savings or accessing the best talent, and consider the benefits of international hiring, such as 24/7 customer support and reduced on-call duties for engineers. (9m21s)

Hiring Senior Executives

• Hiring for senior executive roles can be more challenging as there are fewer qualified candidates, and many have moved away from coastal areas in recent years. (10m1s)
• Executive compensation differences between locations like San Francisco and Des Moines have diminished, as top talent requires competitive salaries regardless of location. (10m18s)

Attracting Talent to Startups

• Small startups can attract talent from big companies by emphasizing unique aspects of the company and the founder, rather than competing on salary alone. Equity and the potential for meaningful work are significant draws for candidates. (11m15s)
• Candidates often compare offers from major companies, which may include substantial compensation packages. Startups should focus on understanding compensation benchmarks and using data tools to position themselves effectively. (11m53s)
• It is important for startups to focus on the opportunity and future potential of the company when hiring, rather than just the current value of equity. This approach can help attract candidates even if the financial offer is lower. (12m28s)
• During interviews, asking candidates why they are interested in the company, the job, and the timing can provide insights that help tailor the offer to their motivations, potentially leading them to choose a lower offer if the opportunity is compelling. (12m45s)
• It is important for founders to communicate the vision and mission of their company to potential hires, emphasizing the significant impact they can have as part of a small team compared to a larger organization. (13m38s)

The Changing Tech Hiring Landscape

• The tech hiring landscape has shifted, making it easier for small startups to hire employees due to changes in supply and demand dynamics. (14m10s)
• From 2020 to late 2022, there was an expansionary phase in tech hiring with rapid growth and rising salaries, but this shifted to a correction phase with layoffs and hiring freezes starting in late 2022. (14m33s)
• As of late 2024, the correction phase continues, with big tech companies and late-stage startups still experiencing layoffs or reduced hiring, shifting the balance of power towards employers. (15m10s)
• Employees at late-stage startups and public tech companies are realizing the instability in their current positions, making early-stage startups more attractive due to the potential for greater impact and growth opportunities. (15m48s)

Retention and Onboarding

• Retaining a workforce is crucial, and employers should focus on understanding the employee journey, similar to how they manage customer experiences, to ensure competitive salaries, benefits, and work-life balance. (16m25s)
• Companies should focus on designing a clear plan for the first 90 days for new employees, outlining specific projects and goals to ensure successful onboarding and integration. This approach helps in accurately defining job roles and enhances the ability to attract candidates by clearly communicating the work they will be doing. (17m17s)
• A common issue when hires do not work out is often due to incorrect job descriptions or inadequate onboarding processes, rather than the candidate being unsuitable. It is crucial to define the role and onboarding process clearly before posting the job. (17m29s)
• Emphasizing the tasks and projects a new hire will undertake, rather than just the skills required, can make the job more appealing and help in selling the opportunity to potential candidates. This approach aligns with an opportunity-based sales strategy. (17m55s)
• Establishing milestones at 30, 60, and 90 days can help in tracking progress and ensuring alignment with company goals. Additionally, companies should consider how they will reward and recognize employees, tying these practices back to the company culture. (18m23s)

Company Culture and Employee Management

• Understanding and defining the company culture is essential for creating a cohesive experience for employees, similar to how companies build experiences for their customers. This includes considering how onboarding, promotions, and performance evaluations align with cultural values. (18m32s)
• Communication is key in addressing any issues with job specifications or employee roles. Companies should engage with employees as individuals, recognizing their humanity and the changes they undergo over time. (19m0s)
• There are different approaches to managing a workforce, such as hiring and firing quickly or finding new roles for employees who are not a perfect fit. Companies need to decide on their team-building strategy, especially if they aim to retain employees long-term. (19m16s)
• Recognizing that employees will experience personal changes and life stages over time is important for retention. Companies should view employees as humans with evolving needs and circumstances. (19m35s)
• Employees have multiple roles and can evolve with the company, highlighting the importance of understanding their motivations and goals. Founders, often acting as managers in early-stage startups, should align what they offer with what employees care about, which can vary for each individual. (19m53s)
• The relationship between an employee and their manager is crucial, as it significantly impacts employee retention. It is often said that people leave managers, not companies. (20m12s)

Employee Engagement and Retention

• Conducting employee engagement surveys, even in small companies, is recommended. The Gallup 12 survey, which includes questions about personal care, friendships at work, and having necessary resources, can help predict employee retention. (20m58s)
• Having close friendships at work is a significant factor in employee satisfaction and retention. Companies should monitor key moments, such as when an employee's best friend or manager leaves, as these can influence an employee's decision to stay or leave. (21m27s)
• Advances in AI now allow companies to predict employee behavior and retention more accurately. Tools like Prido analyze company data, such as Slack and Zoom activity, to identify top performers who might be at risk of leaving. (22m17s)
• The future of AI and HR is expected to play a significant role in optimizing the retention of top performers, with evolving trends in real-time. (22m49s)

Generation Z in the Workforce

• There is an ongoing debate about whether younger workers, particularly Generation Z, have different expectations compared to previous generations. Companies are encouraged to understand and meet these new expectations. (23m1s)
• Each new generation, including Millennials and now Generation Z, brings unique perspectives and challenges to the workforce. Generation Z is noted for pushing boundaries and having a different worldview, having grown up with technology. (23m19s)
• Generation Z values passion and love for their work, which is seen as a positive trait. Their presence in the workforce is relatively new, with the oldest members having about five years of experience. (24m2s)
• Recent years have seen significant events like the pandemic and major layoffs, contributing to a lack of loyalty among Generation Z workers. They tend to stay in jobs for an average of 1.1 years, compared to much longer tenures for older generations. (24m20s)
• The transient nature of work for Generation Z challenges companies to improve retention strategies. They do not view career progression in the traditional corporate ladder sense, and their perspectives may evolve as the workforce changes. (24m50s)

Salary Transparency and Diversity

• Having a diverse workforce that includes Generation Z is important, especially if the customer base reflects this demographic. Transparency is more prevalent among Generation Z, with topics like layoffs and pay being openly discussed. (25m12s)
• There is a growing trend towards salary transparency, driven by social media and legal requirements in many states to post pay bands, which can be advantageous for companies in recruiting and retaining talent. (25m57s)
• Companies should balance the expectations of younger generations, like Gen Z, who push for transparency and accountability, with the need to retain experienced employees who may have different perspectives on the workforce. (26m34s)
• Establishing a clear company culture early on is crucial, including how conflict is managed and aligning with the values of the company to attract the right talent. (27m16s)
• The push for transparency and accountability is seen as beneficial, improving outcomes and ensuring fair compensation, but it also requires founders and employers to design their organizations to meet these new expectations. (27m33s)
• A diverse workforce, including both younger and older employees, is important for creating healthier outcomes, and companies should aim for a balanced approach rather than focusing solely on one age group. (28m45s)
• Hiring individuals over 30 is beneficial for three main reasons: they bring valuable experience and are less likely to make novice mistakes, they tend to be more engaged and committed to staying with a company longer, and it is illegal to discriminate based on age, which is a protected class factor. (29m13s)

Hiring vs. Outsourcing and Hiring Strategies

• When building a startup, the decision on how much to spend on hiring talent versus outsourcing depends on the company's goals, budget, and the roles that are critical to the business. (30m41s)
• Companies need to consider their strategy for hiring talent, which includes decisions on whether to hire full-time or fractional workers, and whether to hire domestically or internationally. (31m17s)
• Market data, such as that provided by comprehensive.io, can help companies set competitive pay rates by showing what similar companies are paying for similar roles in various locations. This ensures that companies can attract the talent they need and manage their budgets effectively. (31m46s)
• When starting a company, founders should consider the cost of hiring for different roles by evaluating market data and making trade-offs based on location and seniority to effectively allocate their budget. (32m17s)

The Ideal Hire and Company Alignment

• The ideal hire in 2025 is highly role-specific and depends on the company's needs, the defined role, and the team culture. There is no single set of personality traits that guarantees success, as diverse personalities have a place in the workforce. (33m0s)
• It is important to ensure alignment between the individual and the company, focusing on whether the candidate is excited about the company's mission and if their career goals align with what the company can offer. This alignment affects both the likelihood of the candidate accepting an offer and their long-term satisfaction and retention. (34m16s)
• Companies should understand what unique offerings they have that make them an attractive choice for candidates compared to other potential employers. This understanding helps in assessing whether a candidate will accept an offer and remain with the company. (34m57s)
• When hiring, focus on qualities like ambition and hunger rather than age, as hiring based on age can lead to a homogeneous culture that may not be inclusive for everyone. (35m58s)

Building a Balanced Team

• Constructing a team requires self-awareness of one's strengths and gaps, and hiring should aim to fill those gaps with experienced individuals in areas where the founder lacks confidence. (37m14s)
• Founders should leverage their network and venture capital partners to identify what excellence looks like in specific roles, which can guide them in hiring the right talent. (37m40s)
• Competency-based hiring involves identifying key competencies for each role and finding candidates who match those, regardless of demographic factors. (38m6s)
• A balanced team should include both experienced individuals and younger, energetic members to create a dynamic and effective team structure. (38m24s)

Referral Programs and External Hiring

• Referral programs are a common strategy for hiring, as they are often cost-effective and result in employees who perform well and stay longer. (38m50s)
• Referrals account for about a third of all hires at startups, with a higher percentage at the beginning stages when companies are smaller and more cautious about hiring. (39m10s)
• As companies grow, they benefit from hiring 66% of new employees from outside their referral network to avoid becoming too insular. (39m33s)
• Platforms like Liftoff facilitate external referrals by connecting companies with known connectors who can provide thoughtful candidate recommendations, sometimes offering bonuses similar to internal referral incentives. (39m41s)
• Employee referrals enhance the employer brand, as employees sharing positive experiences with their networks can attract more talent. (40m3s)