Bad hiring and recruitment can often make or break any online business within its first year – when it’s crucial to plant your flag first on new territory. For many online start-ups, the recruitment stage is where it all falls down. How does the war for talent affect startups, pre-IPO, Internet of Things Companies and Healthtech? How can your startup business stay one step ahead in the recruitment of the best talent?

For specialist startup recruitment agencies, small businesses = big business

According to research published in 2017 by the House of Commons, there were 5.7 million private sector businesses in the UK, of which 99% of those are small to medium sized enterprises (SMEs).

The service industries accounted for the majority of 74% of businesses in the private sector and a majority of 79% of all private sector UK employment. Further research published in 2017 by The Department for Business, Energy & Industrial Strategy also found that total number of employed people by SMEs was a sizeable 16.1 million, accounting for 60% of all private sector employment in the UK.

SMEs have a substantial influence on national employment and GDP with an annual turnover of £1.9 trillion in 2017, approximately 51% of all private sector turnover in the UK. The UK digital economy is playing a significant part in the growth of SMEs, generating £100 billion each year.

What’s the first big hiring talent for start-ups?

‘Hiring good people’ jumps out as a main concern. In a survey of 860 start-up founders, 74% of them listed this as their top issue – even above revenue growth. And that result seems to have been consistent in the previous surveys carried out – but in the same breath, around the same number of respondents admitted to spending less than 20% of their time on hiring. Does this sound like you?

Why is so little time spent on start up recruitment – something so important?

If the data is anything to go by, this apparent lack of commitment appears to correlate directly with the 16.8% of founders who believe that hiring the wrong people would be the sole reason their business was not successful in the future.

For comparison, more (21.8%) believed that lack of follow on capital would be the biggest reason for a failing business in future – followed by the 17.2% who believed the wrong product would be their downfall.

There’s a clear pattern emerging between the lack of commitment to hiring the right talent, and the negative impact it causes on business growth. The majority surveyed cited poorly timed hiring and firing as the biggest mistake they’ve made in growing their business. Fewer blamed ‘waiting too long to fire an employee’, and even ‘hiring too quickly’ before finding the right product-market fit.

It’s a good thing, then, that there are recruitment agencies who can lift the burden of recruiting from the SME owner’s shoulders. It’s clear from the data that there’s a clear need for an outside resource to step in with their expertise in sectors like pre-IPO recruitment, and edtech, healthtech, fintech and adtech recruitment.


Allow us a moment of trumpet-blowing: we’re experienced in assisting and supporting the many small enterprises struggling to make the right recruitment choices in the long-term. When it comes to scaling up recruitment, helping you find the right people is essential to your business growth. We’ve talked about the finer points of growth hacking before, but in this context, growth hacking is people.

What fundamental issues are SMEs facing?

The first definitely impacts startup recruitment: money. The first major problem affecting start-ups is lack of finance or investment. You may have found that you raised less money than you wanted during your finance year for business activities – indeed, 1 in every 4 small business owners find themselves pitching to more than 20 investors to raise capital. Nearly a third believe raising capital for the next financial year will be very challenging.

This tightens the HR budgets, which means lower salary offers for talented candidates – who then take more tempting offers from bigger companies with deeper pockets.

It seems, then, that a dotcom recruitment agency like us may need to take into account a cost-effective hiring strategy for SME clients.

Choose your investors wisely

A second major problem for many start-ups is the rising influences that investors can have on company decision making and business activities. You may find that, from the outset, choosing your investor will impact your choices further down the line. This may be harder to do when you’re shopping around for investors just so your business can survive. 

Why equality and diversity matters

It’s more than just a tickbox issue. A lack of equality and diversity, without any formal HR policy to iron out equal values, will also seriously impact your business.

Think of the potential impact on your internal company culture, and outsider perception of it (and therefore long-term hiring prospects. Talented female and BAME (black and minority ethnic) candidates are shut out of places they feel aren’t for them – women being a prime example. Are you hiring a broad enough range of candidates not just into your teams, but onto your board and into management? Are you cutting yourself off from talent and innovation because you’re not reaching out widely enough?

Women and BAME candidates are coming into the industry. They’re working on Internet of Things and blockchain technologies, and your recruitment strategy needs to find them where they are if they’re not coming to you.

Another major concern in start-ups across every industry – and possibly affecting recruitment –appears to be sexual harassment, most notably in the tech industry. Surveys like State of Start-ups have found that of the relatively few women polled, nearly half think that harassment is under-reported.

Agencies like us need to exercise a duty of care for candidates recruited into SMEs, particularly in the tech world, and help create a safe working environment for all: free from any cultural prejudice or harassment associated with gender, sexual orientation, religion or race.

How is hiring important for client/consumer acquisition in start-ups?

As a start-up owner, your primary concern is acquiring new customers or clients. To do this, you need the skills and expertise to generate new business and achieve that all-important revenue growth. You’d be surprised how many businesses fail at this hurdle; 2015 data from the House of Commons showed 414,000 business births, but 328,000 business deaths within that same year.

This means that you need people with the right skillsets in sales. Not far behind are skillsets in tech and product development.

Good sales leaders are hard to find, and so are engineering executives and product managers. Revenue growth is the newest yardstick for success, as this is now very much a first-to-market environment.

The challenge here is having the right skillsets. How can you predict what you need when the next big thing could possibly be the most overhyped in that moment? Will we be talking about virtual or augmented reality in five years’ time? Blockchain, anyone?

What we do know is that your business has to be adaptable, and flex to the latest platforms. We’ve seen that, in ecommerce at least, augmented reality and articifical intelligence is making big strides – would customers be without customer service chatbots and voice-controlled search tools?

Marketing also never goes out of fashion, either. How else to sell and explain the latest technologies to a market hungry for convenience, newness and innovation?

How we can support you in growing your startup

We understand the unique pressures of filling a skills shortage in the digital space, which is why 30% of our business is committed to helping start-ups grow.

We appreciate that whilst startups and pre-IPO companies are increasingly under pressure with funding and hiring the right people, we work with owners to team them up with talented candidates such as ‘growth hackers’ and analytical product managers, among other key hires, helping level up their businesses.

 We recognise that key specialist areas of expertise, including analytics, CRM, product management and marketing roles, are hotbeds of much-sought-after skills by start-up founders. And it’s important to make the right hire; according to HR Review, three quarters of businesses struggle to recruit the right digital skills, such as the data scientists and analysts who are crucial to the success of your digital strategy.

We are also very aware of new areas of recruitment as they come “online”. Recently we have seen the rise of blockchain and bitcoin recruitment, IOT jobs and marketplace recruitment.

Let us highlight some of the numbers, since we’re proud of them. As a specialist recruitment agency in product management, ecommerce and marketing geared towards online companies, in 2016 we facilitated placements for disruptive consumer services, and saw the number increase from 26% to 54% compared to previous years.

For ecommerce and digital marketing roles, we secured 26% of successful hires for candidates in start-ups across the digital landscape. Approximately 92% of our roles secured for candidates were those with a strong academic background.

Are you looking for your next job in the dotcom world?

The majority of roles we’ve helped secure for candidates are between £40-£60k; about a third of roles we’ve secured salaries for sit between £60-£80k.

Closing the gender pay gap is important to us too, and it’s important that this happens at the top of the pay grades. Approximately 42% of roles we secured for female candidates were between £40k-£60k. About a third of female candidates are on £60k-£80k, and 15% are earning £80k-£100k.

For male candidates it’s a similar story; 37% of roles for men are at £40k-£60k; 30% are £60k-£80k, and 13% earn £80k-£100k.

With an eye on those £100k-plus positions, the share of men and women securing those roles sits at 5% each.

Your next steps to recruiting top talent

It’s clear that while there are still significant gaps across the board, as far as attitudes to recruitment, the available talent pool and closing the diversity and gender gaps, the data is encouraging.

The market is growing and shifting, and if you’re an SME owner then let us take on finding the right people to grow your business. If you’re a candidate, let us represent you. We see both sides of the industry coin and know how to navigate new challenges and old biases – we cut through the BS to find the right roles for you, your experience and your skills.

If you would like to talk to us about hiring for your start up, Pre-IPO, Blockchain, IOT, Healthtech, Proptech or Adtech company…

Contact Us Today on 01727 736 690

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