Hiring IT-specialists For Tech Startups in a Financial Crisis

I often write about what is happening in the IT universe and share some useful tips in IT recruitment. Today I would like to focus on the point of how to optimize your recruiting processes due to the new market realities and efficiently find IT, employees, for your tech startup even during the various financial crisis. 

What's happening?

Recently, according to experts, the financial crisis has been taking place in the United States: large banks and financial analysts warn that a certain recession is inevitable. A similar situation has already been observed before — the American market was shaken in 2001, 2008, and 2020, and if the first two times were influenced by other factors, the latest one developed because of a pandemic that affected the entire global economy. 

Now the situation is even more complicated because, in addition to the post-crisis consequences, the economic sector is also affected by current world events, which ultimately negatively affect the development of businesses. It is especially difficult for startups because often such crises hit them harder than large companies. 

2 main problems for startups on the American market today

The first problem that has now become particularly relevant for startups is a massive reduction in investment. According to experts, in the first three months of 2022, the number of investors terminating cooperation with startups has sharply doubled compared to last year's data. This is a wake-up call because recently the tech market in the United States has been actively developing — a lot of breakthrough tech products have been launched, and teams have entered the market offering innovative and non-standard solutions to solve the problems of both B2B and B2C segments.

The second problem is partly related to the first: in order to optimize the budget in a crisis, many startups retire some of their staff or hold the processes of hiring new employees on pause. The issue of optimization for startups, in general, has always been one of the key ones, because the initial stage of business development requires a huge amount of resources. 

We have been working with startups for a long time, so we know their specifics from the point of view of recruiting. Therefore, we have made a small checklist for startups on how to rebuild their recruiting processes in a crisis in order to survive and continue to develop. 

Prioritize

Conduct an internal audit, and evaluate which positions are important for your company from the point of view of the functioning of all business processes first of all. For example, if you understand at this stage that you absolutely need a CTO to establish the effective work of IT departments, prioritize this position for hiring.

Do not forget about the market conditions for vacancies 

Despite the difficult situation in the US financial market, there are still certain boundaries within the framework of hiring — for example, it will not be possible to effectively fill job openings if the conditions offered by the company are below market average: the salary is too low, for example. 

In addition, think about what opportunities you currently have to ensure that your offer to candidates remains competitive. For example, if the positions open in your company do not involve working in an office, offer remote employment, which has long been one of the stable trends on the IT hiring market. Also, this way will allow you to expand the geography of your searches for candidates, and therefore increase the pool of candidates — recruiting processes will be faster. 

Speaking of recruiting processes, simplify the selection stages. Taking into account the current situation with startups in the United States and not entirely positive prospects for the near future, it is important to fill job openings quickly, because this affects the company's business processes. To do this, it is necessary to keep candidates' interest in the position and stay ahead of competitors (especially IT professions for which demand remains consistently high — for example, Java and Golang developers), so as not to lose a promising candidate. Optimize the selection stages, leave a minimum number of them — for example, a technical interview with a recruiter and an interview with a CTO.  

Also, give up the test assignment — despite the fact that now it is gradually returning to the IT market due to increased competition for vacancies with relocation, in the case of a startup, it is more likely to lose potential candidates. If the position involves testing the technical skills of a specialist, try to do this within the job interview — for example, by using a lifecoding. Thus, you will be able to evaluate the candidate's professional skills, and they will not have to spend their personal time outside of the interview to fulfill the test assignment.

Consider Junior Candidates 

Let's clarify this point a bit — everything is purely individual and fully depends on the circumstances, goals and key tasks of your particular business. If you have the resources to train a novice employee, then it makes sense to look towards junior candidates — yes, they will have less experience than senior and middle IT specialists, but their salary expectations are also less high, which will allow you to fill the job opening more effectively even taking into account financial difficulties of your company. 

Junior specialists appreciate the opportunity to start a career on an interesting breakthrough project and grow professionally, so even despite the lower salary level and the temporary absence of certain motivating factors (for example, options), they will still be focused on productive cooperation. 

In addition, more experienced candidates have traditionally been somewhat wary of cooperation with startups before, since they preferred stability, which startups cannot usually offer enough — in the current market conditions, it will become even harder to attract such an IT specialist.

It stands to reason, all these tips are not universal — it is important to understand the specifics of your company and the situation in which you are. Nevertheless, we hope that this information was useful and will help you to effectively build recruiting processes even in such a difficult time.