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Startups Want to Hire, But Worry They Won’t Find the Talent They Need

by
John Zappe
May 15, 2013, 1:37 am ET

cover-startup-outlook-reportMore tech startups than at any time in the last four years will be looking to hire this year, says Silicon Valley Bank, but they worry they won’t be able to find the talent they need.

Even as most leaders and founders of the firms surveyed by the bank for its annual Startup Outlook say conditions in the U.S. are better this year than last, the number of them who report hiring talent is their biggest challenge has grown. Nine out of 10 executives report finding and hiring the talent they need is their biggest challenge.

The annual survey says 87 percent of the tech startups reported plans to add staff this year. That’s up four points from last year, and 14 points from the first survey conducted in 2010. The strongest market for startup hiring, according to the report, is Texas. The Boston area and metro New York are third and fifth respectively.

Talent Challenge

Software and hardware startups report having the hardest time finding the tech talent they need. For healthcare sector firms, hiring is not quite as much of a challenge — 17 percent describe it as “extremely challenging” compared to the next lowest scoring industry, cleantech, where 23 percent described hiring that way. However, healthcare startups are also the least likely to be adding staff, at least compared to the sectors.

Silicon Valley Bank startup hiring challengePerhaps not too surprising, only the smallest of startups, those with fewer than 10 workers (which tend to be very early stage firms), say their biggest challenge, just ahead of finding talent, is the compensation it takes to land tech professionals. For every other size firm the biggest challenge is finding workers with the necessary skills.

Most in demand, especially among hardware startups, are the STEM skills; 82 percent of the executives said they are looking for those workers, and 40 percent reported no skills are more important. Only 17 percent said management, marketing, or other non-STEM skills are important to them.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. | Startups Want to Hire, But Worry They Won’t Find the Talent They Need | Get Hiring

    [...] Startups Want to Hire, But Worry They Won’t Find the Talent They Need [...]

  2. Howard Adamsky

    Most companies are right. They won’t.

  3. Stephanie McDonald

    Welcome to my business plan.

  4. Howard Adamsky

    Stephanie, contact me anytime if you want to toss around some ideas!

  5. Keith Halperin

    “Startups Want to Hire, But Worry They Won’t Find the Talent They Need”
    They can’t find the talent they WANT (attractive and outgoing under- 30 y.o.members of the Fabulous 5% willing to put in 80 hr weeks for average or below comp) but they can get the talent they need (everybody else). Furthermore , if there simply aren’t enough obtainable people who have there right skills for a company to success, isn’t that a fatal flaw in the business plan? As I’ve mentioned before, if you need only superstars (or too-rare skill-possessors) to succeed, then you’re on pretty shaky ground.

    Cheers,

    Keith

  6. Cara Thielvoldt

    This is a really interesting article, and addresses one of the problems we are trying to solve at MyEdu. We are trying to help connect employers with college students or recent grads that have the skills that they are targeting. We have some pretty great software that allows you to target students by skills, majors, classes, etc.

  7. Stephen Smith

    I think it hinges on what type of talent you need. Software engineering skills are ubiquitous nowadays, with the trades and construction staff being harder than ever to find.

    Keith Halperin may be right when he suggests that certain startups may be relying on exploitative methodology. I know several who would fit into that mould.

  8. Keith Halperin

    @ Stephen; Thank you, quite true.

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