The ball is in your court, but do you know what to do with it?
Never before has it been so challenging for companies to recruit, engage and retain talent. Recruiting and HR professionals know it, CEOs know it, and you probably know it too.
But what does it actually mean for you, the talent, to live in a “talent-first” world?
Historically, companies had the upper hand in the hiring process. They created the jobs and paid the salaries, so it was taken for granted that they’d get to call the shots.
But over time, things have changed. As jobs become more specialized and technology becomes more sophisticated, the difference between high performing employees and everyone else becomes more and more meaningful, and in turn, more critical for companies’ success.
High performers don’t just get more of the same thing done in less time, they give companies a distinct, non-linear advantage — they are the innovation engine driving businesses forward.
One engineer might be ten times more valuable than the average; that’s the kind of value worth fighting for.
In the past decade or so, the demand for high performing talent in the tech industry has grown exponentially, while the talent pool has developed far more slowly. Just about any industry has the potential to be revolutionized by technology, and many companies have sprung up to do just that. To thrive, all these companies need technical talent, and there just aren’t enough high performers to go around.
We now have a shortage of software engineers and data scientists, and an even more severe deficit in sub-fields like AI/ML, NLP, blockchain, AR/VR, computer vision and so on.
Companies need to work harder than ever before to win over key hires, and many will make concessions they would never have dreamed of a decade ago.
I’m not just talking about recruiting top 1% unicorn talent; the competition to hire anyone in the top 25% is fierce.
We’re living in an entirely new paradigm in which employers will go to great lengths to court talent. This opens up a whole new world of opportunity for employees to take control of their careers.
Talent-First Job Searching
For top tech talent, the term “job search” is becoming a bit of a misnomer. It implies that candidates actually have to go out and actively search for a job.
Today it’s far more likely that employers will do the hunting.
The most recent Startup Hiring Trends report from Lightspeed found that among startups surveyed, less than 30% of employees actively applied for their jobs; the remaining 70% of hires came through company initiatives like sourcing (ie. cold outreach), employee referral programs, and leveraging outside recruiters (who in turn cold-outreach, as well as build and maintain relations with top candidates over time).
To give you an idea of what this costs for employers (or to look at it differently, the value of finding those employees), a typical recruiting fee for a technical hire in California today is 25% of the candidate’s first year’s annual salary. If you take an engineering salary of $180,000 (a typical “top quartile” engineering salary at a startup, that means companies end up paying $45,000 for each candidate that’s hired, or more!
A recruiter could make over half a million dollars by helping companies hire just one engineer per month... I personally know freelance recruiters who make about $2,000,000 per year.
In addition to the rising cost of the hiring process, companies have had to increase salaries in order to attract the best candidates. Payscale reports a 2.3% average annual increase in salaries for IT workers, totaling 18% salary growth since 2006. That increase is even steeper for software engineering roles.
So where does this leave you, the highly valuable employee in a talent-first world?
I don’t want to give you the impression that since employers are actively searching for you, finding the right job should be a totally passive process.
It’s now up to you to be strategic and really take advantage of this new paradigm to get the things that you personally want, need and deserve in your career.
How to Negotiate Gracefully from a Position of Power
The more value you have to offer an employer, the greater the rewards you may seek. Just keep in mind that hard skills aren’t the only thing companies are looking for.
How well you click with your team, support your manager’s goal and fit with the company culture counts too. Employers will try to suss these things out based on your behavior during the interview process, including your negotiations.
No matter how good your resume is, always be respectful and show your enthusiasm for the opportunity. Make the wrong impression and you could get weeded out, or you might actually still get hired and end up starting a new job with a ton of baggage.
With this is mind, consider the following three opportunities to negotiate from a position of power.
Compensation can come in many forms. Let’s get the basics out of the way first.
You should already know your market value before you walk into an interview, and you should have the confidence to make sure that you get what your worth. There are several benchmarking tools (payscale.com, glassdoor.com, etc.) out there that can help you figure out your salary range, depending on your role, experience level and location. Make sure you have a strong understanding of how equity, signing bonuses, performance bonuses and other financial benefits factor into your total compensation as well.
It’s okay to ask for the upper end of the scale, but avoid looking greedy or uninformed by asking for more than that. You could say something like, “a typical range for this position is $150K-$250K, with top quartile candidates earning $200K-$250K. If you see me as a top-quartile player, as I do, I’d expect a salary offer in that range.”
Many companies offer a lot of built in perks including various opportunities for work-life balance and flexibility, but if there is something that you want that’s not already offered, don’t be afraid to ask. Working one or more days a week from home, or occasionally working remotely for a few weeks here and there is becoming more and more acceptable. Paid childcare, extended maternity/paternity leave and other health and retirement benefits are also growing in popularity.
Whatever it is that matters than you, you’re in a position to ask for it. You may not always get everything you want, but if something is really important to you, you’ll likely be able to find a company that will meet your requirements. Companies can only ratchet up salaries so much, so flexibility becomes an alternative bargaining chip to attract top employees who appreciate it.
Two-Way Hiring Process
The balance of power has shifted in the hiring process, and the structure can too.
While it’s true that companies are willing to go to greater lengths than ever before to win over talent, cultural change tends to be gradual, and many of the structures of the employer-first world still exist.
That means you’ll have to communicate carefully to get what you want. I suggest you should ask for the opportunity to interview your employer, just as they get to interview you.
If you explain how it’s important for you to find the right fit, many employers will grant you the flexibility to interview your future team and your boss. Here’s a short list of things to assess during the process:
- Is your boss the kind of person you want to work for, learn from and grow with?
- Do you get along with your team, personally and professionally? Will they challenge you, teach you, and help you grow?
- Will the company culture allow you to thrive in your career and enjoy going to work each day?
- Will you be working on a tech stack that you enjoy or want to learn?
- Will you be able to learn new skills that will advance your career?
- How much freedom, ownership and responsibility will you have, and is there a path to gain more?
To take full advantage of being a job seeker in a talent-first world, it’s important to know what matters to you in your career, and learn how to communicate effectively in order to get it.
You know how they say ‘with great power comes great responsibility’? That absolutely applies here. It’s not up to anyone else to determine the trajectory of your career. That responsibility falls on you.