An insight into the hiring trends of start-ups and small businesses
Small businesses have very particular hiring patterns. And within individual categories, we observe often surprising consistency. At TalentPool we have a front row seat on how SMEs hire, who they are looking for and what gaps they need to fill. In this short piece, I share three of our most pertinent observations.
The first relates to the first external non-technical hire (i.e. excluding developers) made by startups. In sx out of ten cases, this person picks up a brief which relates to marketing, content production and social media. And in three out of ten cases, it's a sales role - so scarcely very different as far as business functions are concerned.
There is a clear logic driving this trend; founders are typically product focussed. That is to say, they identify a gap in the market and devise a product or service to plug it. Having built their solution however, they face an - often unanticipated - challenge; although the product solves the need, no one is buying it. Naturally, this is particularly the case with first-time entrepreneurs. Good businesses leaders understand that problems are best solved by people - and so the first hire is into a marketing or sales role, with a mandate to spread the word and, hopefully, drive early sales.
Small businesses also share characteristics precipitated by their structural vulnerability to fluctuations in demand - or their capacity to deliver at pace. This constitutes our second observation. Small changes in sales often make the difference between being under and over staffed. And indeed, one small improvement to internal processes might have a radical impact on capacity - and therefore hiring requirements. The result is that, above all, small businesses need flexibility outside of their core team. This partly explains the enthusiasm amongst startups for hiring interns. This has resulted in a huge, if often under-appreciated, opportunity for recent graduates interested in working in a fast-paced commercial environment. Another factor behind the popularity of offering internships is cost; and issues do arise with respect to the salaries (or not) offered to interns, something which is understandable but not acceptable - which is why we don't help companies fill unpaid roles through our platform. The need for flexibility also drives demand for outsourced services to cover off activities often undertaken internally. Small businesses have always outsourced their accounting and legal activities. More recently, tech development has crept into this space. But growing demand has fuelled supply and SMEs are now able to engage 3rd parties to look after everything from PPC marketing to administration and even operations.
This leads to our third and final key observation; SMEs bringing functions in-house after early growth. We've seen a number of hires through our platform of individuals taking on roles previously performed by a 3rd party. PPC marketing as well as operations are good examples of this. It's a very rational development for the company, seeking to firm up internal capabilities and therefore robustness (possibly with a view to capital raises or exit) but it's also a decision driven by financial considerations; at a certain scale, it just makes more sense.
Post Date: March 1st, 2016