7 “Musts” If You’re Hiring Executives Right Now
In the past few years, the job market has shifted wildly, and trends continue to change at a fast clip. On the heels of the pandemic and what was deemed the “Great Resignation” , companies are still struggling to fill vacancies with top talent. These challenges start with entry-level employees, and range to include hiring executives. According to one survey of over 40,000 employers, global talent shortages are at a 16-year-high, with 3 out of 4 employers reporting it’s tough to find the talent they’re looking for.
Aside from the general staffing hurdles, hiring executives can be particularly challenging, especially for early-stage founders. There’s plenty of reasons why this is the case, from the talent shortage to challenges that are particular to early-stage startups. So, what exactly are the best practices if you’re hiring executives? We interviewed 50+ seed-stage founders to find out, and to hear what they’re looking for when hiring executives. Here are their “musts” for early-stage founders looking to make strategic hires right now.
Must #1: Be prepared to pay more!
With the rapidly changing business landscape comes some new trends and expectations. One of them is that executives expect to be paid fairly for their expertise, even if they’re working at an early-stage startup. While many executives might expect to make slightly less by taking a job at an early-stage startup (as opposed to a larger, more established company), they still expect to be compensated competitively.
While early-stage startups can also offer compensation in the form of non-cash rewards and recognition, this is no longer enough to compensate for a notable gap in expected wages. Equity, bonuses for meeting KPIs/OKRs, profit-sharing, retention bonuses, and matching retirement fund contributions is still appreciated (and even expected). But it’s not a replacement for an actual competitive salary.
… especially for sales talent.
In general, early-stage companies are expected to generate revenue much earlier (when compared to past years), which means they need experienced sales leaders in place sooner. According to our internal data, this level of demand has resulted in a 20% increase in sales leader compensation in recent years. Additionally, with the sustained rise of remote work comes an applicant pool which is geographically dispersed across the country (and even the world). This means that higher salaries aren’t just reserved for the East and West coasts anymore, and that applicants from everywhere are going to be expecting higher salaries.
Must #2: Let the people work remotely (or at least flexibly).
After the unexpected and abrupt shift to nearly-uniform WFH, the jury is out: most employees prefer working remotely at least some of the time, and maybe more importantly, really want the flexibility to be able to. A recent report by McKinsey found that 58% of Americans report being able to work remotely at least part of the time, and that most employees want a workplace where flexibility is an option. The study also showed that when given the chance to work flexibly, most people take it.
With all of that in mind, an early-stage startup that’s hiring executives almost definitely needs to offer some sort of work flexibility by giving people the chance to work remotely (at least some of the time).
Must #3: Forget stack ranking candidates.
Stack ranking candidates might have been a useful practice in the past, but today, it’s far too time consuming, and lacks any notable benefits. Historically, our executive search team submitted 5-7 candidates at a time, which allowed our clients to stack rank them, once they had all gone through the entire process. That style of recruiting doesn’t exist anymore.
Firstly, the pace of this old method of recruiting doesn’t match the pace of hiring executives today. There isn’t time to stack rank candidates (or run a 10-step interview process) because the best candidates are off the market within 10 days. If you like a candidate, you have to move them through the process quickly and make an offer fast...even if you’re not able to compare them to other candidates.
Additionally, judging prospects by comparing them to one another might not be the most accurate way to find your perfect executive hires. This process can involve subjective opinions, arbitrary metrics, and can decrease candidate morale, if they feel they’re being measured against everyone else in the room. Plus, some desirable traits might be hard to gauge in a 1-to-1 comparison, for example, innovation and creativity. Instead of stack ranking candidates, you can measure each candidate based on specific qualifications (for example, innovation or leadership skills).
Must #4: Outline compensation upfront.
The conversation around compensation was historically reserved for the end of the interview process. We don’t live in that market anymore. Now, before a candidate will even get on a networking call, they expect to know compensation details. Transparency is key when talking about compensation today.
It might feel risky to share your cards up front, but it keeps your pipeline honest and helps ensure a search doesn’t implode at the very end. (That situation is heartbreaking!)
Plus, compensation discussions can often work in an early-stage startup’s favor. It’s when you get to also highlight benefits and other perks that your company is offering. These “extras” (such as equity, shares, benefits, and stipends for home offices) can go a long way in providing value for your candidates.
Must #5: Know when you need to bring in an advisor.
Early-stage startups don’t need to hire alone. They can lean on the expertise of others to help during this critical process. For example, if you’re not deeply informed on the function you’re hiring for, it might be wise to bring a trusted advisor into the interview process from the beginning. Advisers can look like professional peers, or executive recruiters, who provide comprehensive hiring services (including advising you during the process).
Having a strong advisor on your side can provide you with manybenefits. Depending on who you choose, they might be able to offer you high-level vetting, or might guide you through the entire recruiting process (even ensuring your team has the infrastructure in place to conduct a comprehensive hiring process).
Having an advisor provides early-stage startups with one additional benefit: they can help fortify your company’s credibility through association. When your brand is new, it might be tough for it to stand on its own. Advisors can help early-stage startups overcome this hurdle.
Must #6: Really understand the role you’re hiring for.
It’s one thing to want to hire an executive or someone for a C-suite position. It’s another to actually deeply understand what that role means, and what you want them to do. What tasks and projects do you want this person to take ownership of? Who will be reporting to this person? What gaps are you looking for the person in this role to fill?Really understanding the role you’re hiring for will help you identify candidates who perfectly fit the bill, because you can ensure that they’re going to deliver exactly what you’re looking for. For example, when hiring a head of talent, you should outline why exactly you’re hiring for this role (you’re looking to aggressively hire), what business goals they will have (i.e. employee retention), and what their primary functions will be.
Must #7: Be clear about business objectives with the potential hire.
Instead of simply tying new hires to desirable traits (“strong leadership skills”), a more effective way of hiring executives is to outline clear business objectives you want this new hire to deliver on. Examples of business objectives can include reduced churn, better employee retention, improving brand identity, and increasing profits. By outlining clear business objectives, you give new hires a great picture of how they’re expected to contribute to your company, and if your goals and desires match their skills.
Want us to help with your next go-to-market search?
Hiring executives is no small undertaking, and it’s a crucial step for early-stage startups which are quickly growing. In the startup landscape today, funding rounds are happening more quickly (and with bigger checks), there’s a growing talent shortage, and it can be tough to lean on a new brand to bring in top talent.
That’s where we come into play. We’re Will Reed, and we’re the only go-to-market executive search firm built exclusively for early-stage founders. If that seems specific, it’s because it is. Early-stage founders don’t just hire executives – they create cultures. We tap into our deep networks and ecosystems to source the best candidates that fit your company’s culture, and work quickly to match the pace of the startup space today. Not only that, but before we start a search, we make sure you and your team have the proper infrastructure in place to run a best-in-class interview process at scale.
