Why you’re struggling to hire in 2021 & how you can improve (part 1)

Having recently seen both?The Guardian and?The Times talk about staff shortages and what to do about them, I wanted to detail my own 2021 experiences. They are lengthy, so I’ll break them into two parts. Part I below, part II here.?

The first three changes (outlined below) relate to your internal practices and how to set yourself up for success. Changes four and five (which you can read in part II) look at external changes you can make to broaden your talent pool.

The digital sector is currently one of the UK’s biggest anomalies.

While a number of industries are still crippled by Covid - with some of workforces remaining on furlough - the same cannot be said for the world of digital, and venture backed scale-ups, which is currently aggressively rebuilding.

￡8billion has been invested into London’s digital sector over the last 12 months, with 1000s of companies now looking to hire the best talent. All at the same time.

This happens after every downturn...

Marketing and sales departments are the first to be cut when things go bad. Then the first to be rehired.?

The current cycle is very similar to 2010 - not long after the worst of the credit crunch. After two abysmal years companies spent the following 12 to 18 months rebuilding. We’re starting to see the same thing today.

As an example, take the Digital Marketing Manager role (with a mid-career London?salary of ￡40-55k). There are over 2,000+ companies in London looking to hire this role right now, and the job spec and budgets are cookie-cutter replicas. Just swap the brand name and you’ll see the same salary offered and key skills required.?

Same for Software Sales Executive roles (with a mid-career London salary of ￡40-55k) where there are 3,000+ vacancies being advertised with the same spec, skills and salary.?

The problem?

This creates a huge bottleneck (as we’ve seen since the start of 2021).

The talent is still there but they have a huge choice of where they go to work. The best talent is acquired by those who have a streamlined hiring process, offer the best salary, or provide mission-driven work.

So how do you compete in this market? I believe there are five quick changes you can make.

The first three changes (outlined below) relate to your internal practices and how to set yourself up for success. Changes four and five (which you can read about it here) look at external changes you can make to broaden your talent pool.

OK, so this is hardly the most groundbreaking suggestion (and throwing money at the problem isn't always the answer), but in any supply/demand shortage the cost of what you need to buy goes up. And it’s long overdue.

London digital and scale-up salaries have stagnated, with no noticeable increase for a decade, while inflation costs have gone up by 2.1% in the past year alone. There is a huge mismatch.

I worked in Asia Pacific for 10 years and, after returning to London, was shocked at the salary difference between the regions. The UK is often referred to as a mid-cost wage centre by Chief People Officers in Asia or the US. It’s why American tech companies love London. They’re amazed to see how much value they get on a London salary compared to New York or San Francisco.

Of course I’m only speaking about the world Santa Monica Talent operates in - the digital, tech, and scale-up one - and I know salaries in other industries have gone up.

But have a think about what you were earning or paying staff 10 years ago.

How does that salary differ from the one you’d pay for that role today? Our experience at Santa Monica Talent suggests the difference will either be small or non-existent.

I’ve spoken to HR friends across the world - from California and New York, to Hong Kong and Sydney - and they’ve all seen the same thing in their territories: salaries have gone up over the last 10 years. The increases vary. Some are at 10% with others at 50%.?

We’ve also been told that salaries in the north of the UK have gone up so this salary stagnation seems to be a London thing.?

At some point there has to be a reconfiguration and, if you want to hire in 2021, then the point is coming when you need to review your salary structure as you’re probably underpaying.

On top of this, in the past year the big American tech firms in Kings Cross, Shoreditch, and W1 haven't been able to transfer US internationals to the UK to fill digital roles. Instead they’ve had to hire in the local market, snapping up more talent than ever.

This may continue into 2022 so you won’t just be competing with London scale-ups for the best talent. You will be going head on with Google, Facebook etc..

Are you paying what’s needed in today’s market? How did you reach that figure?

The best way to judge the current salary needed for what you want is to meet and interview candidates. You can then benchmark what is being paid right now in real time.?

Every founder in technology believes they’re working on the next big thing. It’s this confidence that helps their team do so much in such a short space of time. It’s what raises the money and gets the attention.?

However, it’s a view that can be dangerous when applied to the hiring process. I’ve heard founders say: “Why wouldn’t they want to join us? This is a rocketship and we’re giving them a lot of opportunities.”

Rather than looking at a set list of all the skills your business needs across a whole department, you need to focus on a priority skills list and core attributes. You can teach skills but you can’t teach mindset and attitude.?

Take the Marketing Manager role. If you look at the job specs for this role, most are asking for experience in email, brand, SEO, copywriting, PR, website management, data analytics, design, and coding. Such a person doesn’t exist. It's typically a whole marketing division that's being described in one role’s job spec.

There’s a similar issue with hiring sales people. Companies are trying to find someone with a ready-to-approach network, and experience in exactly the same sector/technology. My concern with this strategy is simple: what happens when they’ve completed that network after day three??

Widen your gaze. If you don’t you’ll miss some of the marketplace or hire the wrong person.

The best talent has the ability to pick and choose who to speak to right now.?

If a hiring process looks cumbersome or over engineered - because someone read a Silicon Valley blog post from a unicorn founder about the benefits of including a karaoke showdown in the ninth interview - a candidate simply won’t engage in it.

Make your hiring process as frictionless as possible to keep a candidate engaged for as long as possible.

If you're a company with less than 200 employees and on a fast growth trajectory your hiring process does not need to be over-engineered (leave that to bureaucratic corporates), especially if you’re a young and nimble company

Here are three things to consider:

• After an initial screening from HR/ Talent, your key stakeholder should do the next round. It doesn’t make sense for them to be at the end of the process as they need to excite the candidate early on. Don't ask the new hire’s peers to do the early screening; peer-to-peer interviews are awkward and riddled with potential issues.?
• Don’t ask for competency tests before you’ve met them. Candidates won’t do them. Why should they? Ask any Software Developer how many tests they do when they hit the job market. It turns into a full-time job just taking tests.
• Manage your expectations versus salary. You can’t create a whole team with one person so be realistic on your job spec. It should only focus on the five key attributes you’re looking for that can help the business move forward.?

Final thoughts (for part I)…

Are you paying what’s needed in today’s market? How did you reach that figure?

The best way to judge the current salary needed for what you want is to meet and interview candidates. You can then benchmark what is being paid right now in real time.?

Want to know what else you can do to improve your hiring? Read part II of this article here.?

Are you ready to rebuild and hire this year?

Get in touch with me today on Linkedin. We help start-ups scale up by building exceptional sales, marketing, product and leadership teams.