Part Two of Two
22 Unique Approaches Startups Can Use to Attract and Retain Top Talent in 2022
In part one of this blog, we addressed the surprising hockey-stick-curve for software engineering salaries in North America in 2021. You can read the full blog here.
Every week, more data comes to light around how employers around the globe have made SUBSTANTIAL salary increases across the board from June to November of 2021 to retain top talent.
One of our clients recently approved a 13% across the board increase for engineers. Another network of ten startup CEO’s averaged 10% raises in the first half of 2021 AND another 5-8% for the second half of the year. That’s stunning.
Gergely Orosz, reports and corroborates this trend in the Pragmatic Engineer that some companies have made off-cycle adjustments in the 15-30% range to keep up with market trends and stave off engineer attrition.
This is critical data for CEO’s, CTO’s and hiring managers of all sorts to truly grasp what the future holds in building the country’s best engineering teams.
Looking to 2022, it’s important to continue to expect rapidly evolving market conditions and ongoing extraordinary competition for engineering talent through next year; don’t be complacent, and be ready to iterate a few times in the coming year.
You’re going to have to be creative to attract and retain talent next year. Below you will find twenty-two unique and important ways to create compelling company cultures and compelling offers- beyond the skyrocketing salaries.
Feel like you need to catch your breath for a minute? Take a few deep breaths and let’s dig in…
Focus Diligently on Mission, Core Values and Culture
It’s tough to navigate without your north star. Today, work culture is the most important factor in creating a high-functioning team that loves what they do. Employees expect you to express and live by your core values, and they’ll know quickly if you don’t. Here’s one of the best Engineering Team Core Values statements we had ever seen. The team at BiggerPockets demonstrates excellence; It’s clear they put a lot of thought into this.
Prioritize Culture Add – Not Culture Fit
Many companies simply add engineering staff because they have the technical acumen they seek and the person is someone they “want to grab a beer with”. This is short sighted in a variety of ways, but if you genuinely ask yourself as an organization if you want more of the same school of thought, or do you hope to grow as a company with different opinions and approaches around your virtual conference table? It’s a pretty clear answer but a fundamental shift in approach and messaging.
Geo-Neutral Salaries
Our friends at Iterable are leading an important movement to pay the same salary, regardless of employees’ location. They indeed understand that empowering engineers to earn what they are worth, regardless of location, is among the smartest moves you can make today.
Build Diverse, Remote Teams
The simple math teaches us to dramatically increase the size and diversity of the pool of candidates by recruiting nationally. When you include Canada or Latin America, the pool gets better and more diverse yet. More simple math: it’s a regrettable truth that if your team is required to be onsite in Colorado (or any location), the number of candidates who will consider that specific onsite location is far fewer than the number of candidates who might work from their choice of town, city, beach or mountain town. That pool is further reduced when a town as lovely as our community in Boulder has an African American population barely hovering at 1%. If you are sincere about building teams of A-players that are also diverse- remote teams are the future. The reality is that diverse teams attract more diverse candidates and there’s no shortage of data showing that diverse teams are more happy, more profitable, and more productive.
If You Do Build a Remote Workforce- Ensure That You Support Them Intentionally and Thoroughly
In order for you to have a high-functioning remote workforce, you need to ensure that your organization covers fees for true broadband access, a dedicated (new) computer that’s not shared with the family members, ergonomic chairs and desks, a new-ish smartphone (or simply the plan for one), and access to co-working if they wish to use it for a change of pace. If they need a new sofa or extra table in their dedicated office, this shouldn’t make you flinch. If you’re going to build a remote-first org, don’t cut corners.
Use Your Interviewing Process As a Competitive Advantage
The overall candidate experience in your interview process matters. Period. An efficient and meaningful interview process is a critical aspect of attracting and retaining talent. If your process takes four weeks to hire an individual contributor, an engineering manager or even a director, you will lose great candidates. Two weeks should be your target as a maximum length of a process. If you’re not capable of quick decisions on great candidates, don’t start the process or work quickly to refine it. As Conor Swanson from Code Talent correctly notes “Revisiting feedback loops and the speed at which folks receive updates, internally and externally, are significant competitive advantages”.
Further- whether or not you decide to hire someone, their perception of your organization after the interviews have concluded have long lasting implications. Ask yourself what they might tell their friends about the experience. Being too “busy” or overwhelmed to get back to candidates is not an excuse. Hire while ensuring a positive candidate experience.
One final important note on process and candidate experience- do not ghost candidates. If you’ve decided against them or you cannot make a timely decision, you need to share that information, not disappear. That’s a great way to damage your organization’s good name.
Treat the Interview As a Two-Way-Street
Yes, you can and should ask a lot of questions, but so should the candidate. This is indeed a two-way street when it comes to determining someone’s career move. Leave plenty of time for them to interview you! They should have a strong sense of the organization, the departments, the challenges and the team-members involved. Everyone should be going in eyes wide open.
Our good friend Mike Starkey Senior Technical Recruiter at Amazon summarizes current market conditions well; “We’ve not only lifted base salaries and sign-on packages; but we’ve simply changed the way we recruit. We’re now offering candidates the chance to select which team they’d prefer to work on PRIOR to sending an offer / assigning them to a team. Let the candidates have control – give them the options – let them interview your teams/managers to ensure fit on all sides. Anything you can do to foster deep and meaningful conversations, and increase candidate engagement ultimately results in a mutually beneficial agreement- and that’s a true win-win”.
Fair Chance Hiring
Far too many people are excluded from the job market due to past mistakes (and systemic bias). According to the Harvard Business Review “Fair Chance Hiring is based on the premise that everyone, regardless of background, has the right to be fairly assessed for a role they are qualified for”. Are you interested in speaking with qualified candidates or aren’t you? Fair Chance Hiring is a critical part of any team-building initiative in 2022. Organizations that are doing important work in this space include Honest Jobs and many others.
Offer Excellent Maternity AND Paternity Leave
Our clients support fathers as well as mothers – One in particular, Outside Interactive Media, offers 12 weeks of Paternity leave, regardless of tenure on the job. That’s unique and powerful.
Foster Psychological Safety and Belonging
In only one of many examples on this important topic, Kellogg’s in the UK has recently announced plans to offer paid time off for miscarriages, menopause and fertility treatments. Your Head of People should be deeply engaged with long-term psychological wellness, and doing more listening than talking. This is a strong article on fostering belonging on your team and in your recruiting process. Or friends at InterviewIA are doing great work in this space, working actively to reduce bias in the interview process, and help you build teams with a true sense of belonging.
Parity
This is a tough one, but it’s an important reality to face. Lets say your senior engineers were brought in at X salary level three years ago, but computer science grads with only a few years of experience are now able to command ¾ of what that salary was present day due to manic market conditions and incredible demand for their skills- how do you adjust? The short answer is if you don’t make considerable adjustments (refer to the aforementioned article on global pay increases in the past five months) you will absolutely lose engineers. Sure, pay is just one component of the spectrum on why someone works for you, but if you don’t address pay parity AND level up across your teams in a hyper competitive market- you’ll pay for it in other, more expensive ways.
Prioritize Your Employee’s Mental Health
It can be hard to know how to engage in employee mental wellness; there are a wide range of issues that affect work energy. Make it clear that you understand we may never be returning to “life as we know it” and that focusing on work (and GASP, your wellbeing) during a pandemic is no joke. Understand that your colleague may be having a hard time balancing the kiddos and being a single parent. Perhaps they aren’t getting away from the computer enough, or maybe they just lost a loved one. As a manager, as an employer, and as a kind human being, it’s time to actively provide resources for mental health.
Our friends at SonderMind in Denver are offering FULL mental health coverage for their team in addition to health care. Director of Talent, Josh Anderson says “We want the experience of working at SonderMind to accelerate people’s careers and enrich their lives. That would not be possible without a strong commitment to supporting employees’ mental and behavioral wellness – including 100% mental health coverage. Redesigning mental and behavioral health is not just something we’re doing in the industry – it’s a commitment we’re making to our employees”.
Encourage the use of PTO and the Power of Rest
Just because an organization has a generous time-off policy, it doesn’t mean it will be utilized. If team leadership doesn’t take time off and value rest and relaxation as a key part of the culture (and fostering long term productivity) your team is likely to burn out. Further, just because you as a leader don’t “need the rest right now” doesn’t mean your team doesn’t need to recharge or spend time with their families. Put policies into place that will ensure people can and do take time off. It will ALWAYS pay dividends.
Equal Pay for Equal Work
Being a vocal (and true) proponent of Equal Pay for Equal Work is smart, pure and simple, and doubly so if you genuinely want to build a diverse workforce. Start with listing your salaries based on the Equal Pay law that fosters transparency, but that isn’t enough in 2022. Share with your staff and your recruits why this is important to your organization and what you’re doing to go further than what the law requires.
Employer Sponsored Child Care, Elder Care and Pet Care
Yep- you read that right. The pandemic has certainly blurred the lines between work and home life- and it can be maddening to try and get anything done when you have a little one running around. – Our client UrbanSitter is leading the charge on this front. Our friends at Denver Unicorn Guild Education have onsite day-care at the office as well.
Pay for College Tuition and Ongoing Education
This “perk” has been around for awhile in various forms, but Guild Education, mentioned above, in Denver has revolutionized it as a retention mechanism. It’s no surprise that taking a genuine interest in your employee’s growth personally and professionally pays dividends. Investing in your team’s growth by paying for College, an MBA or even a cooking class has far reaching benefits.
Ski Passes and Fitness Perks
A “Powder Policy” of allowing team members to hit the slopes in Colorado (or Alaska) when there’s more than 8 inches of that sweet-sweet-pow is a solid one. Paying for them to get out on the hill is always appreciated. We’ve also seen monthly Peloton fees being covered, first time tennis lessons, and general “fitness stipends”. Healthy employees are happy employees.
Equity and Bonus Structures
Overall compensation is still the first thing candidates look at when considering a new role. Most of our clients are startups, and many, if not all, offer some sort of equity-based upside for the employees to benefit from a liquidity event (aka “the exit” that many dream of).
More and more clients are offering bonus structures (10-30% of annual salary) or profit sharing as well. If you’re new to the market as an organization, trying to convince a candidate about a yet to be paid-out bonus structure may be a difficult sell. When it comes to stock options, there is typically a one-year-cliff and four-year-vesting-period but not all options are alike.
Understand this for context: we had an incredibly generous offer declined by a candidate this year as the offer he did accept afforded him one million dollars worth of shares vested after the first year and two million more in the third year, plus base salary and a large bonus. That was one hell of an offer, but the point is- get creative and get clear with candidates what is a “yes” for them.
It doesn’t have to be a million dollars, many people WANT to say yes to you, but if you lowball- you can turn them off pretty quickly. Create buy-in on the future with your company, and make your best offer first. You may not have time in this market to make another.
Signing Bonuses and Stock Grants
We are as surprised as you about their resurgence, but it’s true – one of our clients paid a mid-level engineer (at 150k for 7 years experience) a 25k signing bonus, as well as fully paid benefits and strong equity. We’ve also recently heard of a six-figure signing bonus to a senior engineer.
For startups who aren’t flush with cash, spot bonuses of any sort, including stock grants or bumps in existing equity levels (with proof of current valuation, ideally) are absolutely to be considered as valuable tools.
It’s wild, but if you can pull a candidate in your direction in empowering them to pay off a car or those damned college loans in one big chunk- it could provide a solid bit of motivation.
Consider a clawback clause if something doesn’t work out in the short run on signing bonuses.
Genuine Community Engagement
As we’ve learned first-hand, building community with no expectation of anything in return (aka the Give First ethos), is a powerful way bring people together and an incredible approach to building brand recognition over time. If you reach out to your community with a transactional mindset, you’ll get exactly what you put into it– not much. If you offer your time, your knowledge and sometimes your resources – and act as a genuine partner – you’ll engender trust, respect and likely lots of interested candidates or clients who want to learn more about your business. This is the long play, but it’s the right play.
Employee Volunteerism and Employer Matched Donations
Many of our clients have quarterly volunteer days where employees can donate their time to the non-profits of their choice- sometimes these are coordinated events where folks work together after voting on one cause and sometimes they are done independently. Additionally, if you as an employer offer matching donations to causes that your employees care about – it shows you give a shit about what matters to them. That’s real leadership.
Curiosity, Kindness and Respect
It may seem to go without saying but in a “busy” world where we all are caught up in our own lives, showing a true interest in the wellbeing of folks who are interested in joining your organization beyond small talk, it means the world. Be fully present if you’re going to engage. As all of our parents told us- treating others the way you’d like to be treated absolutely applies to hiring.
Interviews and interactions with candidates are time limited, but your kindness, curiosity and respect should not be.
So, there you have it!
22 ways to differentiate in hiring and employee retention in 2022.
We are experiencing something incredibly unique in the labor market. In addition to all the unforeseen impacts of the coronavirus and the economic and government fiscal policy response, we have a massive generational shift in the workforce. All these forces have come together to fundamentally change the playing field.
Every organization will need to iterate and adapt by creating new compensation and benefits packages to attract and retain the best talent. The alternative is a company that becomes less competitive, less innovative and less profitable over time.
The choice is yours.
Dave Mayer
CEO and Founder
Technical Integrity
