In a recent LinkedIn post published by Avi Golan, CEO of AnyVision, he called on tech CEO’s to #Stop_the_Madness in reference to the high salaries of employees in the industry and was even quoted saying that employees are willing to switch their workplaces if they’re incentivized with fancy perks, such as a PlayStation 5.
I can understand where Avi’s frustration stems from. These days, the challenge to recruit talented employees is unprecedented. Roundforest has recruited more than 20 employees within the past year alone and we’re striving to recruit at least 40 more in the coming months – and none of these efforts have been or will be easy.
There are many more open positions than there are suitable candidates, the result of a lot of money offered by investors and the public (through IPO’s) that flow to the industry and to startups that are obligated to demonstrate their growth and expansion in return. Managers need to invest a great deal of effort into finding the right candidates, and even then – the minute you find a worthwhile recruit, the clock starts ticking and you likely only have a few days before the candidate is hounded by other recruiters and presented with competitive job offers.
The challenge is not only with recruitment but also with retention. When you have brilliant employees, they can easily move on to work at any other leading company; It’s likely that we wouldn’t have recruited them in the first place if this was not the case. And if they happen to forget this for a moment, remember that companies today employ an army of headhunters whose job it is to contact potential candidates over and over again through LinkedIn. If these employees choose to stay – it’s never from lack of choice.
The current environment is very challenging for leaders. Employees are the core of high-tech companies and the single most valuable asset, so retention and recruitment are presumably the most critical responsibilities of leaders. If they don’t excel in recruitment and retention, it will be very difficult for them to succeed in their role and to build a successful and sustainable company. The current situation in the market puts a lot of pressure on them.
But what does it mean to excel in recruiting and retaining employees?
The real motivation of the vast majority of employees comes from things that have nothing to do with salary. Everyone wants to earn what is considered a fair wage in the market -- and among all the companies that offer them this, employees will likely choose the company to which they feel the biggest connection to the organization’s mission and team, as well as a job that offers the opportunities for potential growth and personal development.
How do you determine what a fair wage is in today’s market?
At Roundforest, we look at established salary benchmarks (in Zviran and other salary surveys) and simultaneously make an effort to get a sense of the current trends by regularly listening to what employees and candidates want. Most people are sensible and ask for what they truly believe they deserve – but now and again, there are exceptions (in both directions, above and below). We study a large enough sample and we always make sure to offer a fair and appropriate salary based on our acquired knowledge (even if it’s more than what the candidate asked for – this actually does happen occasionally!). We also increase employee salaries whenever it is deemed necessary.
My suggestion to leaders and companies is to verify that you are paying a wage that is considered fair in the market. If you’re still struggling to recruit or retain employees after that, you have a deeper problem. Think about what the reason behind this could be and make improvements accordingly. Hint: PlayStation 5 is not the cause or the solution (although I wouldn’t mind getting one myself...). Think about this: Are you building a product that has genuine value that employees can connect with and be proud of? Do you have a respectful and transparent work environment in which people feel secure and a sense of belonging? Are your employees being set up for success and given professional development opportunities? Do your employees understand the growth potential of the company and how they will be rewarded if and when the company is successful? If you answered ‘yes’ to these questions, then you will succeed in recruiting and retaining employees. These are the really challenging and important parts of a leader’s job. Salary is the easy part….
This is certainly a challenging time, and there is competition for candidates and talent. Ultimately, this is good for everyone: employees are better paid, companies have to raise the bar and improve their offers, and the state collects more tax. Challenge is a good thing; it motivates us all to do better. It drives us to build better companies for our employees, for our users, for the economy -- for everyone!