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Why Hiring Executives is Challenging for Startups

June 29, 2023

Photo by Mario Gogh / Unsplash

Recruiting top-tier executive talent is a challenge, even in the best of circumstances. For startups, though, hiring the best talent comes with a unique set of obstacles.

Understanding the “why” behind the obstacles is the first step to overcoming them. Even though it can be difficult for startups to attract and retain top talent, it’s certainly possible—some executives even prefer working with startups.

So, why is it so hard to find stand-out talent?

Limited Resources:

Startups are often working with limited resources, such as a smaller budget or fewer team members than larger, more established companies. Top leaders may be attracted to larger organizations where they might receive higher salaries, access to more staff or funding, or more robust support for their teams. This disparity can make it difficult for startups to compete.

Unpredictable Environment:

It’s well known that startups can be unpredictable. Executives who are used to relatively stable work environments may be wary of the fast pace or frequent changes in priorities and goals that come with leading a startup. These factors can cause talent to hesitate to join a startup, fearing they won’t be able to adapt to the constantly changing landscape—or that they simply won’t enjoy it.

Intense Competition:

The startup market is highly competitive, with companies vying for a limited pool of executives. This can make it difficult for startups to stand out and attract the best executives, who likely have multiple offers to choose from.

Limited Track Record:

Startups, by definition, are new companies. Some executives may be hesitant to join a company without an established reputation or proven track record of success. As a result, startups may have a harder time attracting top executives who are looking to established companies for their next career move.

How can you overcome those challenges?

Focus on Opportunity:

While startups may be lacking some of the resources and benefits of established companies, they offer incredible opportunities. Working with a startup can be a great career builder for leaders! When you write your job description or talk to potential candidates, highlight the unique opportunities that come with working for your company.

When executives join a startup, they get to come in on the ground level and build something great. Startup executives roll up their sleeves and do the work. Figure out what’s exciting for your ideal candidates, whether it's innovating within your market, creating a new and exciting company culture, or working closely with a board. As a startup, you can offer more growth and agency than a larger company.

Offer Equity:

You may not have the resources to offer a large salary, but the compensation conversation doesn’t end there. Offering equity in the company is a great way to sweeten the deal for potential candidates.

Demonstrate Credibility:

Your startup may not have the established reputation of a larger company, but you may be able to demonstrate credibility through your team. Does that founder have previous success with a startup, or experience growing and leading another reputable organization? What about others on the leadership team or the board? If you can establish confidence and trust even without a long company history, it can go a long way in hiring your ideal talent.

Share Your Mission:

Share your excitement about your startup! Executives who are looking for a role with plenty of innovation opportunities, or who want to work for a mission-driven company, may be more likely to work with a startup. When you’re discussing an open role, go into detail about the impact that leader will have on the organization and its stakeholders.

It’s true, it can be uniquely challenging for startups to hire top executive talent. There’s a silver lining, though. Startups also have advantages that larger corporations do not. Be strategic and intentional in your approach to talent acquisition, and you’ll be much more likely to find talent that will transform your team and help your startup grow.