Having the best talent is the most important thing for a startup. A company without talent has little chance of raising financing because it will not convey to investors the feeling that it will achieve its growth expectations, according to Stéphan L. Maisons, chief strategy officer at Fellow Funders. “Without talent, neither Cabify nor Glovo would be where they are,” he says.
How to attract highly qualified personnel is one of the main challenges facing high-growth companies. Many of the best professionals work in multinationals, where they are guaranteed a good salary and job security. Getting them to put aside the security of a great company to embark on a new career adventure is a challenge for startups. However, they have several strategies to try to recruit the best professionals.
One of them is to offer shares in the company through ‘stock options‘. “We offer a‘ stock options ’plan to people who join the company with a certain level of‘ seniority ’”, says Vicente Pascual, co-founder of Cabify. The attraction is that if the company grows significantly, the price of the shares will multiply, so its owners will be able to sell their shares and obtain large returns. “We also offer extraordinary assignments of ‘stock options’ when employees reach important milestones,” says Pascual.
For Maisons, stock options are a good tool for hiring talented workers in certain key positions. At the salary level, startups cannot compete with large multinationals. However, with stock options, employees can earn more than their salary if rapid growth is achieved. Or if the startup becomes a ‘unicorn’, a term that encompasses firms that are not listed on the stock exchange and are valued at more than $ 1 billion.
“You shouldn’t try to work for a current unicorn, you should try to work for one of the next unicorns,” recommends IE University professor Joe Haslam. With the intention of making the ‘stock options’ system more attractive, the Government’s draft bill of starup, approved this week by the Council of Ministers, wants to raise the tax exemption as income from the work of the ‘stock options’ from 12,000 to 45,000 euros per year.
Strategies for recruiting talent vary from department to department. While stock options are often the exclusive option of the management team, members of other divisions such as IT development are often drawn in by the possibility of overcoming a technological challenge. “The motivations of developers are not financial, but challenging,” says Maisons of Fellow Funders, a collective investment platform that allows startups to get funding.
“To attract a technical candidate, the strategy is always to say come with us and you can work with the latest technology,” says Haslam, from IE University, who considers that currently it is much more interesting for computer scientists to work on decentralized finance projects or with the GPT-3 algorithm, a revolutionary artificial intelligence that can create texts that appear to have been written by humans. “If you have a tech startup, you have to constantly challenge the IT team to get them motivated,” says Maisons.
The way you attract professionals to your marketing or sales teams is also different. In this segment, workers are often more motivated to achieve goals related to company objectives. These include individual professional challenges such as closing a contract with a specific client, or deciding to join the startup because they want to overcome the challenge of positioning the brand as the leader in its sector.
A cross-cutting factor in attracting talent is the company’s wellness policies. Here different measures are included such as telework days, office quality, organizational culture or working only four days a week, for example. “We believe that work-life balance and flexibility are essential levers to promote well-being and retain talent,” says Pascual, from Cabify, a company that, among other initiatives, offers a paid free Friday every month.
Reassess needs
Attracting talent is a great challenge for startups at the beginning. But that challenge persists as the company grows and its needs change. “The initial selection of the team is very important, but when the team grows, it is necessary to evaluate whether the roles from the beginning are the right ones for the next one,” says Vicente Pascual, co-founder of Cabify. When the company expands its operations abroad, it is essential to hire the best local talent to join the company and bring different ideas.”We have discovered things in Peru that we have later taken to other countries”
