We are at an inflection point in blockchain and crypto.
In 2021 alone, blockchain companies have raised more venture capital and private equity than in the past decade (since Satoshi Nakamoto introduced bitcoin in 2009) - a landmark US$25B+.
Source: PitchBook, New York Times. Illustration from Forbes
Funding is at an all-time high, the number of blockchain and crypto companies is at an all-time high, and naturally, the demand for blockchain talent is at an all-time high too.
A quick search reveals 30,000+ talent in Asia with blockchain listed in their profile, compared to 600,000+ job postings including the keyword. That’s a whopping 20:1 ratio (in favor of blockchain talent)!
It is little wonder that in 2020, blockchain made its debut on the list of LinkedIn’s most in-demand skills and catapulted to top place. I doubt anyone would be surprised if blockchain (or related skills) topped the list in 2021, or tops the list again in 2022.
If you are looking to hire blockchain talent, it is worthwhile to adopt a thoughtful approach amidst the heat and hype of the market.
Centuries ago, before GPS and navigation systems were invented, seafarers traveling the South China Sea and the Indian Ocean would take advantage of seasonal monsoon winds to embark on long voyages. By sailing with the tide, they could reach their destination before running out of supplies.
Source: The News Minute
Hiring blockchain talent is no different - entrepreneurs need to know where the crypto winds are blowing. In a recent study by Electric Capital, blockchain developers have coalesced around the top ecosystems.
The Darwinian principle has prevailed, even as ecosystems outside the top 200 have declined in developer count. When picking an ecosystem to build the blockchain technology on, be discerning on talent availability.
Source: Electric Capital report
It is also important to be realistic - when defining candidate requirements, the number of years of experience may not be the best proxy, simply because blockchain is such a nascent and recent technology.
Analysis of Australian blockchain-related job ads between August 2017 and August 2018 revealed almost 1 out of 5 requiring 9+ years of experience - essentially asking candidates to have started working on blockchain since Bitcoin was founded and worth $0 (talk about 20/20 hindsight).
Top 3 hiring trends in blockchain talent by Michael Page - not enough talent, not enough money, so we have to think and do things differently.
Instead of defining requirements by years of experience (which is the lazy way) or even hard skills, companies should be on the hunt for softer qualities in candidates - those who are willing and able to pick up blockchain-related skills.
As described by Max Soyref, Director of Blockchain Services from KPMG,
“I am of the view that it’s better to hire a great engineer who is a fast learner over an average engineer who is well-versed in blockchain.”
The pace of change and the level of uncertainty in the current environment creates a level playing field for talent, where passion and ability to learn trumps the mastery of any single technology.
Any rigorous hiring process should assess a candidate’s soft skills - creativity, communication, and leadership are cited as the most critical factors to look out for among blockchain talent.
Given the highly competitive blockchain talent market, it is also important for entrepreneurs to be flexible in their human capital strategy. Several ways entrepreneurs can achieve that include:
Building a brand in the blockchain ecosystem - where the blockchain aficionados are, there you should be. By creating content, organizing events, playing connector and being active in blockchain ecosystems, companies can increase visibility and nurture a talent pipeline
Start an upskilling and training program - perhaps the right employee for the role already exists in your company but in a different role. Look internally for employees with the ability and interest to develop skills in blockchain, and you can nurture them (mentorship, courses, etc.)
Consider a remote, distributed workforce - expand the search beyond your target geographies and leverage remote/freelancing/distributed work platforms to access talent. Flexjobs reported in their most recent survey that top blockchain companies like Chainlink, Protocol Labs, Kraken are leading the way in hiring remote blockchain roles. After all, isn’t it logical to consider decentralization in a company that is working on decentralization?
“If you are a blockchain developer, you often can choose where to work, decide whether you are challenged, and try new things. You are in control of your own destiny. I think that’s the recipe for retention.” - Max Soyref, Director of Blockchain Services, KPMG.
Where might talent be in Asia? Singapore, Hong Kong, and Korea might be a start
Conversations around hiring invariably lead to compensation - when hiring for blockchain talent, there are 3 components:
Salary (base + performance-linked)
The salary of a blockchain developer varies significantly across geographies and skill levels. Given the nascency of the space, salary data is at best, directional.
Across the continents, it is unsurprising that the US has one of the most competitive salary components, but what is surprising in research from Chrono Tech and U Today reveals potentially higher salaries in Asia than Europe.
“In Europe, the need for blockchain is still not eminent in a lot of places. As a result, the blockchain developer salaries aren’t that high compared to Asia or U.S.A locations,” according to cryptocurrencyjobs.co.
Still, entrepreneurs should take these guides as directional references, not authoritative standards. Salary, alongside other compensation components, should be well-crafted and tailored according to a mix of market signals, candidate experience, skill level, and company needs.
Stock compensation presents itself as another strategy for entrepreneurs to stay competitive against more established companies. I have written a deep-dive on how to get started on stock compensation, and recently, Saison Capital and Svested launched an in-depth report on The State of ESOPs in Southeast Asia.
Finally, there are tokens - the most distinctive component of compensation unique to companies involved in blockchain and crypto. Tokens offer unparalleled potential (in risk and reward) to employees and can be particularly compelling for blockchain talent. Tokens can even be more liquid than stock compensation, assuming they are listed on exchange and restrictions have been lifted. Even Lionel Messi is getting paid in tokens by Paris Saint-Germain.'
Yet, entrepreneurs should also beware of the potential risks - “Despite the rush, some job offers may fall through if the prospective employee decides the leap to crypto isn’t worth it. Some compensation packages include a token component -- and deals may have to be renegotiated particularly if the token price plunges during the hiring process”, according to Neil Dundon, founder of recruitment agency Crypto Recruit.
Furthermore, if you are hiring blockchain talent in geographies such as the US, there are plenty of tax implications - after all, the taxman does not accept Bitcoin or Ethereum (not yet at least). Closer to home in Asia, complexities arise when there are different forms of taxes (e.g. capital gains tax vs. employment income tax) across different jurisdictions (e.g. a company incorporated in Singapore, with primary business activity in Indonesia, hiring a talent-based in Vietnam - a setup that is not uncommon). Navigating these complexities is necessary for entrepreneurs to design token compensation plans with mitigated risks and aligned incentives.
Hiring blockchain talent can seem daunting in the current heated market, but you can take active steps to stay competitive and find the right talent. In summary:
Be aware of the hurdles around.
Know the market and be realistic - don’t show your naivete by asking a blockchain developer to have more years of experience than the technology has been around for
Look beyond the hard skills - willingness and ability to pick up the skills matter more.
Be creative - build a brand in the blockchain space, train your current employees and consider remote hiring.
Plan your compensation wisely and know the risks - use a combination of salary, stock, and tokens that fits your purpose and stays compelling to prospective candidates.
Be aware of the potential hurdles in offering stock or token compensation, especially with constantly evolving legislation and tax guidelines in many emerging markets
If you’re building a web3 company and have hired blockchain talent, I am curious to find out - where does your talent come from (in geography and prior work experience), and how did you discover them (e.g. LinkedIn, referrals, recruiters, etc.)?
If you are keen to continue this conversation or have ideas/questions, hit me up at [email protected]
Disclaimer: I’m an emerging market VC at Saison Capital, but my opinions are my own.
#humancapital #hiring #recruiting #blockchain #crypto #startups #venturecapital
Previously published here.