The Time to Hire is Now
The tech community is headed into uncertain times. Articles abound discuss the market shift in both entry and exit valuations. The core assumptions for startups are being challenged, or have fundamentally changed, and startups are moving away from a focus on pure growth to a focus in acknowledgement of burn rate, profitability, and self-sufficiency.
Candidates, too, feel the adjustment, as they take a closer look at the equity schedules and valuations in offer letters. Other candidates, having been burned with upside-down equity, are now beginning to ask for more cash, or making employment decisions based on factors outside of an equity growth/upside.
At Binc, we’re always watching how market events translate into hiring outcomes for our clients. Our data platform watches hundreds of indicators at individual candidate, project, and company aggregate levels, and harnesses this data in real-time to adjust our active business strategies.
We know the impact of making key hires and how the right hire can lead to increased profitability and exit valuations. More than 20% of our prior clients have had successful exits and not a single client is out of business.
Our experience tells us that despite market uncertainty, if you are looking to grow your company, the best time to do so is now.
Look at hire activity by month over recent years:
For each year, February through May is a key hiring window. This period simply outperforms the rest of the year. Though any market, including talent, is generally complex, we see this period of above average outcomes to be driven by both demand (companies looking to hire) and supply (candidates looking to make a move).
For the demand side, we see an increase in open head counts starting the year as managers are eager to fill positions quickly after end-of-year budgetary and holiday lulls. Indeed, going into 2016, we saw incredible interest in our services, again, contrary to market commentary and adjustments. Our experience has been that huge opportunities still exist for startups in key areas, and those opportunities continue to drive the need for hiring.
From the supply side, we see an initial surge of candidates. Of these candidates, we see no change in the caliber of candidates as measured by experience and educational indicators, suggesting it’s not just more candidates suddenly in play, but equally valuable candidates.
(Average active candidates, 2013-2015, Horizontal axis = Month, Vertical axis = Candidate Index)
The combined increases in supply and demand result in significantly higher conversion rates. Candidates during this period have nearly 20% higher conversions than what will be experienced on average over the remainder of the year.
Not only are candidates in this period more likely to convert, they are likely to convert more quickly. Candidates introduced in the months of February and March move through the recruiting funnel nearly 20% faster than the average for the rest of the year.
Data always tells a story, and the story here is clear; to take advantage of a surge of candidates, increasing conversions, and decreasing time in process, one thing is certain: the time to hire is now.