Startups are constantly competing with bigger, wealthier companies for talent. And they often win out, even though seed companies pay less on average than corporate development gigs.
Matt Mickiewicz runs developer recruitment site Hired. He says the advantage for startups is their speed. Hired’s in-house data scientist Elliot Kulakow analyzed nine months of data across 2,300 hiring processes and shared the data with us to show us how the speed factor works in tech recruitment.
Eighty-three percent of paper offers are accepted if they are made within 21 days of an introduction, the point at which a company and developer agree to start a formal interview process. After that the percentage drops to 63%. Speed is even more critical when it comes to hiring the most in-demand developers. Two-thirds of offers go to the top third of talent and developers who receive eight or more offers on Hired accept a job within 16 days while those who receive a single offer take over 23 days.
The fastest companies average four days between each interview step, the slowest 10 days. That means that the fastest quartile of companies complete a full four-step interview process before the slowest quartile have even gotten to the third step.
The more steps there are in your hiring process, the more likely it is that you will be too slow to hire top candidates. “You should be able to present a final paper offer within 5-10 days of first meeting someone,” says Mickiewicz. “Move the process as fast as the candidate allows versus as fast as is convenient for you. We have seen hundreds of cases where companies just forget to follow up with candidates or to reject a candidate. They’ll reschedule interviews three times because of other priorities.”
Seed stage companies can often make faster decisions than larger rivals, and this shows in the statistics, but the first quartile of series A and B+ companies and even major corporations are still faster to make an offer than most seed-funded startups. Series B+ companies hire more people–they are almost three times more likely to make a final offer than seed stage companies–so their hiring process tend to be much more organized than those of early-stage startups.
Later-stage companies also make better salary offers. Seed stage companies pay, on average, below market rates but the difference is most pronounced for senior developers. While a senior engineer can expect around $135,000 at a larger company, seed companies typically offer around $115,000.
Early-stage companies may also lose out by underestimating how much time they should spend on recruitment. “Twenty to twenty-five percent of your time should be spent interviewing,” says Mickiewicz. “It’s a really good metric as to whether you have a hiring culture. If you view hiring as a core competency you need to develop in the business, then you’ll do whatever it takes.”