Finding and securing talent is supposedly one of the biggest challenges in the European tech industry, but there are several viewpoints around what exactly the problem is.
When the topic of conversation veers towards the supply of talent, it often focuses on the hiring crunch in Silicon Valley and a possible repeat in Europe, but is that the case?
The LIFE (Learning Incrementally from Failed Entrepreneurship) project, of which Tech.eu is a member, has put together a white paper that chronicles the challenges and failures that European startups face across various stages of their development. The report splits the lifespan of a startup into four different phases – Discovery, Validation, Efficiency, and Growth.
Startups that were interviewed for the report were asked to identify the kinds of problems they have experienced in each of these phases and how, or if, they solved them.
Building a team and hiring was cited by interviewees as a significant problem in each of the four phases.
During the ‘Discovery’ phase, team issues were given as the main problem, namely in getting the right technical founding team. In the ‘Validation’ and ‘Efficiency’ phases, team is no longer the number one problem but still a significant one. During those phases, startups are in the hiring process, building out their staff, and they may now encounter the supposed talent shortage problems so often cited. Finally at the Growth phase, many startups deemed team and hiring as a “substantial problem”, due to the need to scale and internationalise.
Problems with hiring can’t be viewed separately either. LIFE’s white paper goes into detail on money and access to funds. This is a major problem at both the ‘Discovery’ and ‘Validation’ phase, it said, where lack of funds will stymie talent acquisition. This continues to have knock-on effects; respondents said in the early phases that a lack of technical talent has ultimately influenced the development and direction of its product.
One of the startups quizzed for the study, Nonabox from Spain, recalled its challenges with finding talent to build and develop its website, switching between freelancers and an in-house team. The startup mentions not having a technical co-founder or advisor to guide it.
Across the board, however, none of the startups surveyed had any thorough or concrete solutions for the problems they faced. Rather, they could only offer loose advice based on their own experiences.
At the same time, there are opposing arguments to the notion that there are talent shortages across the continent in the same vein as the Valley.
Atomico Ventures, one of Europe’s top VC firms, stands firm in its belief that Europe’s talent supply problem doesn’t compare with Silicon Valley’s. According to a survey it published in November of last year, 57% of respondents (made up of CEOs, founders, and investors) said there is “good or very good availability” of talent in Europe.
Partner Dan Hynes argues that the number of programmers, developers, and engineers isn’t the challenge but rather the way companies engage with prospective talent and how they hire people. According to Hynes, there’s a hiring problem, not a supply problem.
HR managers and internal recruiters are left to wade through professionals by engaging with recruitment agencies or connecting with prospects on LinkedIn. This leaves little personalisation in the job hunt and finding the right fit for the startup’s culture and mission. It’s now recommended that a startup build a recruitment team in the early phases that’s prepared to train their interviewers and commit time to recruiting.
Finally, the LIFE report adds in its summation of the problems facing startups that founders should ideally have some experience in working in a startup rather than going straight into founding one of their own. A glimpse into how an effective hiring process works will help any founder when it comes to doing it themselves. Previous experience gives some vital know-how on the pitfalls facing companies that are looking for talent.
In the coming weeks, we are going to highlight more conclusions from the LIFE white paper, so stay tuned! Also, feel free to share your opinion or your own experiences in the comments below – we’d love to hear your thoughts or stories.
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