The venture capital market is prone to fluctuations.
Uncover where startups are thriving and the issues they need to address going forward.
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Tech startups operate in a volatile market. While there’s always hope of breaking into the glory of an initial public offering (IPO) there is also plenty of competition in a dog-eat-dog market.
Software company Carta has spoken to 2,000 venture-backed companies in the US that represent 125,000 employees to identify the key trends in these companies.
It appears that although companies supported by venture capital are approaching hiring in new and inventive ways, recent months have also seen a rise in layoffs.
Hiring trends in startups
Remote hiring has risen sharply in 2022; in 2019 remote hires from different states were at 35% – so far in 2022 65% of employees have been hired remotely.
Not only are companies hiring remotely, but they are making the appropriate adjustments for the localities of candidates. Carta found that 84% of businesses take employee location into account when deciding on compensation packages.
UNLEASH previously caught up with the CEO and founder of Veremark, Daniel Callaghan, about why remote working has become the norm, he noted: “The COVID-19 crisis has sparked a rise in international recruitment, as remote working became the norm and as employers realized they could access a wider talent pool if they were willing to look overseas.”
He added: “Companies who have seen success with it during the pandemic and have managed to hire new employees securely will see no reason to re-impose limits in their search for talent.”
In terms of what these companies are looking for, there is a trend of searching for entry and senior candidates with less of a focus on mid-level positions. However, this statistic begins to change as companies begin to hit a $250 million valuation.
On average, all roles within the organizations analyzed saw more than 4.5% growth in salaries.
Although companies are making remote hires effectively, there are issues. Notably, the number of people being forced to leave these companies is increasing.
Terminations made up 29% of departures in May 2022, a great deal more than the 15% seen in 2021. There are many factors that can lead to these decisions, including the economy which has been shaky for startups of late.
However, ensuring that a hire is the right fit is essential as well. Businesses need to reflect on why hires have not been a success and look inward at whether their onboarding strategy is creating an engaged and productive member of the team.
By improving onboarding organizations can reduce unnecessary layoffs and continue to draw from the successes seen in remote hiring strategies.
