The tech market has changed. It is superfluous to say it at this point, but perhaps a more meaningful statement would be: the tech market has changed and the ramifications are still in the process of being understood. When it comes to talent, jobs, and hiring, Binc has experienced firsthand what this means for candidates and how they are responding to the new topography of the market. As a result, what candidates want has changed.
To an extent, what candidates want is always going to be somewhat consistent: compensation, growth opportunity, and some degree of stability. In the context of our current risk-aversion climate, understanding the nuances of what candidates want today is key for both recruiters and company leaders. Not knowing, or playing by the rules of an old game, will only make it harder to attract, hire, and retain the best candidates for any company.
We polled our recruiters at Binc about what candidates want, specifically asking why individuals either accepted or declined an offer in 2016. We saw patterns emerge, and wanted to share them to empower both recruiters and company leaders with knowledge that can benefit their talent strategies.
Why did candidates accept their offer?
“Salary.” This is not a earth-shattering revelation, but it is important to understand how candidates have started to view it differently in the last year. Base salary is arguably now outweighing equity for many candidates. Post mid-2000s bubble burst and as the tech market recovered, compensation packages typically had a balanced mix of both salary and equity. This strategy has carried into the present day for many companies. Companies that are winning over candidates now are weighing salary heavier than equity, and being pragmatic about how to best compensate their employees. Before bringing candidates to your client, it is critical to discuss the compensation structure and make sure it’s aligned with what candidates want today; in many cases this means more salary, less equity. This is not a hard and fast rule, and some candidates will definitely buck this trend, but if a company is trying to give more equity as a blanket strategy, they will likely miss out on valuable candidates.
“Growth opportunity.” Candidates want growth. This means growth opportunity for their own career, but also clear signs that the company itself is on a clear trajectory of growth. The company needs to have a clear value proposition today, and 1-3 year plan for its own growth. As a candidate moves through process, make sure you or the hiring panel is communicating this plan. See if you can uncover how the candidate hopes to grow as a contributor, and if there is a mentorship or even partnership opportunity for the team they are joining. This is especially helpful if you can include someone in an interview panel that has a “growth story” that can demonstrate to a candidate what growth at the company can look like.
“Influence, impact, and no walls to top management.” Very few people want to just be cogs in a machine. Valuable contributors want to know that they can influence a company, that their voice will have impact, and that they can have direct access to top levels of leadership. Sometimes a candidate, because of an aggressive interview process, will get zero signal about this aspect of a company, and therefore may influence them negatively when considering a job offer. Encourage them to tactfully ask their interviewers about what the company culture is like and how happy interviewers are in their role/team. This will usually reveal if and how a contributor will have influence or impact at a company.
“Love the product. Love the team. Love the role.” Candidates need to know what they are interviewing for; from the product itself, to the team they are joining, to what their role will look like on a day-to-day basis. Candidates that have this thread running through their interview process will be more likely to say ‘Yes’ to an offer. This is because what was once unfamiliar has become familiar and exciting through an optimal interview process. Be vocal with your hiring managers and interview panels, make sure the panel is getting the information they need from the candidate, but also alert them to leave time to speak about the team and role to help educate and excite the candidate.
“Stability.” Yes, the market has changed. Has it plateaued? Will it still dip? When will the uptick be? With these questions about the larger market unanswered, candidates want stability. They want to see a clear strategy, clear revenue, or clear exit strategy. If something is untested, or risky, or is just another player in a saturated market; why would they say yes? A company and hiring manager that demonstrates stability to candidates will make it much easier for the candidate to say yes once an offer is extended.
Why did candidates decline their offer?
“Risk aversion.” The top response from Binc recruiters was risk aversion. Candidates are less inclined to join smaller startups and smaller companies, especially as an arguably more stable Google, Facebook, or other “enterprise” size companies can offer more stability to candidates. The cowboy mentality to go roam the frontier and find something valuable is not as attractive an idea as it once was in tech, so risk aversion is prominent for candidates that decline offers.
“Unreasonable comp expectations.” Candidates may not know how much the industry has changed, and we see candidates asking for salaries that could easily be called “boom salaries” that match when the market was robust and healthy. That is not the case today. Belts are tightening. While companies should lead with strong salary, some candidates have unrealistic salary expectations that are hard to meet. Try to advise them about what others are making in that role, with comparable education, and with comparable experience. There are also great tools out in the market today to uncover this type of data, like Paysa. If a candidate is trying to go all Scrooge McDuck on you, have them check their worth with an objective tool like Paysa before they hardline their comp expectations.
“Lack of mentorship.” Many candidates, especially new graduates or those early in their career, are looking for some form of mentorship. Some companies do not have a mentorship culture or have the infrastructure for it, and are very often requiring fully baked contributors that can run at full speed on day one. This can be unattractive to younger or inexperienced candidates, and although they may impress a hiring panel, they may say no because they may not see a partner to help them grow.
“Weak base salary.” A weak base salary is another top reason candidates are declining offers. Again, every candidate is different, but the majority of candidates are preferring stronger base over equity due to the state of the market. Make sure you know both the company’s roof and the candidates roof, and see if there is any type of overlap. Uncovering this sooner rather than later will make it easier for a candidate to say yes.
“What we don’t know. ” What you don’t know will make you lose a candidate. While there are hundreds of details to cover when a recruiter partners with a candidate, there are hundreds of details that won’t be covered. And those details, usually about a candidate’s personal life and preferences, will be what contributes to a candidate declining an offer even when everything else lines up. While you can’t know everything, you can try to partner deeply with a candidate, and uncover more details about them, so you can better equipped to understand how and why they will say no.
What candidates want today has changed, and for many companies they have not adjusted course to reflect these multifaceted changes candidates now require. Make sure your own strategy and the strategies of the companies you serve are aligned correctly, so, the rest of 2016 can bring the right talent to top tech companies.