Good hiring is always a tough task for any startup. And receding recession could mean even more challenge in the situation, when talent within starts looking at options outside. For greener pastures or simply for the sake of change. Operationally speaking, the cash pay-out of hiring goes way too higher than the recession days and it becomes increasingly challenging for business owners to buy dedication from their employees.
Another aspect of recovering economy is surge of multinationals (for example Zynga coming into India declaring hiring of about 100 odd gaming employees) into the local market and playing a spoil-sport. But that’s a bitter truth one has to live with, and honestly speaking its good to compete.
So how can startups retains talent or hire good guys who would dedicate oneself against the lure of money? 
Tough question that is but here are some ways which can help:
1. More often than not good developers work only for work satisfaction. Providing tasks which give thrill of execution will surely keep the steam going. (This works even without any extra money for that matter).
2. Do not generalize performance or qualification of individuals and cast them against reports or studies conducted by traditional media. For example: “…80% IITians leave IAS jobs when recession is gone – TOI”. Such reporting makes you lose the other 20% too.
3. Luring with equity might not help. This runs the risk of lowering the perceived value of your equity and will not give any clear objective to developers coming from this part of the world. Simply for the reason that business environment over here is not as matured as in the Valley.
4. Show your solidarity and positivity towards economic recovery. Ramp up your sales strategy coz only sales can fix (by and large) all other problems. Good hiring is only one of the problems, you’d agree.
What more can be adopted to keep the engine chugging. Any suggestions?
Good post Arvind. Hiring or retaining in a Startup whether in the recent times of recession or other wise, has always been a challenge. The initial dedicated and smart team the company hires, shapes up the future growth of the company, be it developers or marketing or sales. Having said that, my opinion is that apart from monetary gain it is utmost important for a startup to convey the future growth, expansion plans and where will be the hire seeing himself and the company in the next 3 years. That gives a sense of assurance to the hire, in the startup and the management team to a large extent.
I would add to the list above
1. Remain focus and sound focus – lots of startup loose focus and want to do everything under the Sun. Though it is imperative for startups to be agile towards opportunity, it is often confused with jumping from one priority to other. This deludes the employee and they tend to loose faith and start looking out.
2. Show them a good career path and provide an environment to achieve the same.
+100 Ashish, focus is important not only infront of VC’s but also the employees. Very straightforward.
Timely post!
From my experience ( few hired during recession quit recently )
1. A lot can be mitigated by offering a higher pay package than the market. This was easy last year, but it difficult now.
2. Even if you manage to offer a very competitive pay packet, employees nowadays have a different set of expectations. New hires tend to want a campus environment, free time to hang out with friends, cafeteria, etc etc.
3. Ultimately there is still an “on-site” component. One of my employees left to a multinational in Bangalore who held out a vague promise of on-site assignment sometime in the future. The pull of on-site is very real and unfortunately startups have little to offer in this area.
The key is to assess during the interview stage itself – what the primary motivation for a candidate is to join your company.