[00:00:00] Gareth: Should we do it, let's do it.
[00:00:01] Jake: All right. So let's just dive right in. Today I wanted to talk about the state of hiring. It feels like we've definitely. Gone through a bit of a change in terms of the market and mindset.
[00:00:13] Lots of, doom and gloom articles coming out from VCs. Which I think we can probably share a few as we speak through this. But figure to be a good to get your perspective knowing that. Our business is obviously in the trenches in terms of working with clients at early stage startups all the way through the enterprise level.
[00:00:27] So I think we got a good view, at least on your end, in terms of clients we're working with. And I guess I'm just curious to get your perspective on, The state of hiring as we see it. And then some additional, advice and thoughts for candidates and employers as well.
[00:00:40] Wanted to start really quick by sharing there's a recent crunch base report that was released about a week and a half ago as with this recording. Yeah. Basically list all the companies with layoffs started back in January of 22. I think there's about a total of 95 companies on that list, which is obviously still growing a few interesting stats that kind of popped out to me.
[00:00:56] 75% of those companies happened since may. [00:01:00] 75% of those layoffs that were recorded. Yeah. That they're reporting on. And I don't, I'm assuming this isn't on all inclusive list, but it probably gives you a good sampling at least. Those happened in the last two months. So obviously seeing that acceleration happen but also
[00:01:16] 80% of those are private companies and seem to be concentrated more on the late stage funding. And then you had of the companies that were not private. The recent IPOs were relatively recent in the last, I would say a year and a half or so. So of wanna just open up with that and get your reaction to, to that and the report.
[00:01:32] But also just like your reaction to the market right now.
[00:01:34] Gareth: Yeah, in a way it is very much just like a rewind to exactly two years ago when COVID first started emerging and it was obviously the mass panic then, but plenty companies still moving ahead and hiring at speed. But selectively hiring and that's what it feels like now.
[00:01:51] So there's still plenty of companies hiring. Largely for critical, like mission critical senior level hires positions they can't do without the companies that are [00:02:00] struggling are the ones that were struggling largely struggling anyway, like a couple of years ago. So the cans got kicked down the road and then obviously stimulus helped with a lot of those businesses.
[00:02:11] And I think the bloated overly funded. The businesses that have just grown not growth at all cost, but growth for growth's sake is probably what I would classify as so it's companies that have just not paused for thought at any point to focus on revenue, conversion, EBIT, conversion like having some like even just like a cultural tour of like sense checking.
[00:02:34] Their business, just like continued growth is like the rules of gravity. You have to apply at some point. So those are the business that, that obviously like the big public layoffs. And then unfortunately, like with COVID you then have a bit of a BWA effect, which we're definitely seeing where it's okay, to let lay people off.
[00:02:51] And it's blame me on Ukraine. Blame me on supply chain. Market stock market. Pull back, like the stock market was overly inflated [00:03:00] anyway. There's always going to be like the world's never in steady state. So there's then yeah, the first people will make the layoffs. Then you probably have the ones that are like, oh yeah, let's do it because there's mass layoffs.
[00:03:10] We can get away with doing it. Then I think you've got the ones that don't do it and they don't wanna PR it. So probably met her and those firms that they're, they will probably be doing it or have done it just slightly like more hush. So you there's that whole that's what was happening during COVID.
[00:03:28] So this is all happening again. But there's plenty of businesses going crazy hiring still. So they're just in, they are doing well, they have revenue, they have product market fit. They are not ablely funded. And they are making sensible hires. So yeah they're the ones that we wanna partner with and find and track down and work with and help.
[00:03:47] The state of hiring is that it's all over the place, like both ends of the spectrum. Um, and
[00:03:54] Jake: For candidates who may be, thinking about going into market or looking for something different. I'm sure there's probably a lot of hesitation [00:04:00] at this point. So I guess it kinda brings me to my next question too, or point from a candidate standpoint, what would you tell someone who's looking right now or thinking about looking who might be hesitant?
[00:04:09] What advice would you give to candidates? What's the takeaway for candidates in this market right
[00:04:12] Gareth: now? Yeah, I think just like anything just proceed with caution. Know what you want and understand like why you making the change.
[00:04:19] Is it makes sense? Not, is it, don't just do it for a bigger comp, like that's the, not the reason to do it. If you are obviously deeply unhappy, try and make changes, but if you've tried to do that, then yeah. Sometimes it's better to make a change. And then just do your due diligence like you would with anything.
[00:04:35] So I think it's weird that people make flippant career moves and job decisions anyway. And people do they just get this kind of short term adrenaline? Dopamine hit with a new title and a new offer, but they've never looked at the financials of the business or the revenue model or the cap table. When did the last funding hit?
[00:04:54] Like, how does that affect the cap table? What's the revenue, what's the EBIT, like people that don't ask those questions [00:05:00] often enough, which is bizarre. Cause if you buy a house or if you marry somebody, you probably take your time and Do your due diligence and feel confident about a big decision , but changing jobs is sometimes just done on a whim.
[00:05:11] And obviously like sometimes you just need to take a job, which is completely understandable and fair, but like being in position to not have to do that is something that everyone should probably strive to be in.
[00:05:19] Jake: I think we, we sent, we have a recent post about this, too, just in terms of some questions to ask and think about sounds.
[00:05:25] Giving more intentional with that. And in some of the questions, it might be getting a little too in the weeds. But I would imagine there are some candidates that maybe don't know where to go or how to get some of that information. Should I guess where should they be going to look for that?
[00:05:39] On the financials and stuff. Yeah. Yeah. Like like your, yeah. So due diligence and research you're talking
[00:05:44] Gareth: about, it's not easy, especially if it's like VC backed private company, but If they don't wanna share, if you ask and then they don't, they're not forthcoming, then it's probably not great.
[00:05:54] Cuz obviously you can go under NDA and you can ask all kinds of questions. And like I would advise people to [00:06:00] present that as an option the public companies, it straightforward, you can go in and look at their financial returns and there's a lot of companies out there with good revenue that are not profitable yet, even public ones so that you wanna know when that's likely to happen.
[00:06:12] And every business should know that if they're public company cuz their shareholders will be wanting to know, and then the private companies or the startups or the VC backed, you're more interested in like when the last funding hit and then what's the burn rate, like the root to profitability.
[00:06:27] And that. There's a lot, you can deduce just around conversations with like sales leaders, finance leaders founders and CEOs should obviously know that stuff.
[00:06:35] Jake: We talk a lot about this idea of a menu in terms of comp and you talked, touched a little bit on I guess base pay and thinking about just base alone, but what kind of opportunity does this provide to think about that your, total compensation with base equity stock options, you.
[00:06:50] Gareth: Yeah. So some people have been burnt by equity, so they dismiss it like fully going forward, which is not necessarily the way to look at it. But [00:07:00] and obviously for a lot of people especially in this environment where cost of living's gone nuts in the last year or progressively over the last one to two years, but definitely the last six, 12 months cash is king
[00:07:11] so we are seeing people. Downgrade stock and equity, but probably like the whole Warren buffet thing of be greedy when others are being fearful and fearful when others are being greedy, like probably applies now. But I think the blended balanced. Comp is best. So you've got your base that you can live well enough off. And then there's like some incentive to outperform. You don't just have a huge base. Cuz then if the company does tighten up, you potentially have a target on your back, which nobody wants.
[00:07:42] And then some longer term incentive plans around options or RSU. If you have all of it, then you have more chance of like things working. In different conditions, just like diversified bets essentially, but like betting on yourself. And the business you are working with. And then obviously there's all the other benefits and flexibility of where you work, how you [00:08:00] work and things like that to consider.
[00:08:01] But yeah, definitely being a shorter term kind of fear driven, focus on the cash, which I think's. Okay. But doesn't necessarily do you or the business good in the longer term? So yeah, just a very personal choice based on experience, based on.
[00:08:20] Cost of living based on lifestyle.
[00:08:22] Jake: So recapping on the, the candidate side proceeding with caution, more so than maybe in the past, given the market being more intentional with your due diligence and research and the process and the company. And then also just like making sure you fully understand the why behind a potential move, if that's what you're wanting to do.
[00:08:40] Gareth: And the notion of a safety net So cash is king so have cash. If you can make it your point, whether it's through like your earnings or through side gig to have probably like the worst thing you can do is go from frying pan to the fire, get laid off, join another company, [00:09:00] cuz you need a job.
[00:09:00] That's all maybe not in the best shape or that you just don't like, so it should like turning the negative into positive can be done if you have the time to do it. Three months, wouldn't probably not be enough. You're probably gonna have to take something six months is definitely long enough to like, conditions can change something.
[00:09:16] Makes it work, find something. Yeah. Yeah. Or you can even afford to then take a contract position for three, six months and just buy yourself some time whilst you find the thing. So yeah, I would say aside from the whole choosing the job and doing a due diligence, like in the very, the.
[00:09:31] Step prior to that should be like, can you set yourself a goal to have six months runway? That's tough. Especially if you've got some kids who eat a lot and Joe are going to college or whatever
[00:09:43] Jake: but good to think about, then you're not ever putting yourself in a potentially sticky situation.
[00:09:48] Gareth: And then just knowing that's, there would be really that you get laid off. You're like, cool. Okay. It doesn't really matter too much. Cause I. The ability, and that is very idealistic. I appreciate. And I definitely didn't have [00:10:00] that mindset when I was younger, but like having been through the last 15 years of the recession and then then seeing just general uncertainty being.
[00:10:11] Like volatility being everywhere. risk being everywhere and the world being so interconnected, I think like younger people, especially, but anyone who can, should be building that kind of six month runway for whatever happened yeah. Happening. And then yeah, what that means is yeah, you can be more intentional, thoughtful, selective You can push back a bit more as well.
[00:10:30] If company wants to hire you and you can say I need to know these things. If they won't, that's a massive red flag, you just say, Hey, all call, see you later. Like just have some protocol that you live by with trying to find the next thing. So
[00:10:42] Jake: I think it does a good, is a good summary of the candidate side.
[00:10:44] I kinda wanted to shift over to the employer side or the talent acquisition side. Any advice or thoughts for them on that end in terms of. Thinking differently or approaching this market in a different way. Given the shift,
[00:10:57] Gareth: Yeah, so there's obviously very much a [00:11:00] divided.
[00:11:00] It's like anything, unfortunately in the world at the moment, like everyone's picking one side or the other, it's doesn't have to be that way. You can be a bit more balanced. So a lot of people are like, we're not touching layoff candidates because we think they're laid off for a reason. And. That can save you time and energy.
[00:11:17] And maybe you, maybe that's what you've learned from experience, but there's never been a time like this, like economically. Then there's other companies that are like really interested in talking to those people. I think every individual has different circumstances and. The distribution of luck is not even so some people have had really shitty luck, been at a really good company for 10 years, taking a risk, joined a different company earlier this year, and now they're laid off.
[00:11:39] Like maybe they did all the due diligence under the sun and it's just wrong place. Wrong time. Yeah. Like CFOs come in or the VCs come in and said, no, we're not having a massive field sales team. We're. More product marketing and sales assist. So that's not their fault. You gotta look at like the duration of their career and be like, okay, you were actually [00:12:00] really successful here.
[00:12:00] You've been unfortunate recently. We'll still look at you. But yeah, isn't going into that philosophical debate around, the best candidates never on the market. It's a very binary way of looking at things and actually there's a lot of gray areas in there. So I think companies should be a little bit open-minded.
[00:12:16] This was the same during, in COVID when the layoffs started happening, then like clients were saying we don't want anyone who's been laid off. But they were good people that got good jobs, like as a result, but it does take probably a bit more thinking and energy and empathy, which people don't have the time for.
[00:12:33] Or it's just like a yeah, where our bar's so high that we would never allow it. So yeah, I think no one's right or wrong. Everyone's got their own way that works for them. I do think that that the result is that hiring should be more focused, should be more intentional, should be more purposeful, should be more of an essential thing.
[00:12:47] Is everybody in the business doing enough to warrant making another hire there's loads of evidence of people just been putting bums on seats. For absolutely no reason. It seems. What
[00:12:57] Jake: are, you've talked about this before. [00:13:00] Too, but it sounds like it might be applicable here, but just not rushing the process as well from a hiring standpoint.
[00:13:04] What are your thoughts on that?
[00:13:05] Gareth: Yeah, it happens all the time. Doesn't it? Like market goes crazy. Everybody needs to hire Sean processes short on the selection criteria. Like I've always said like fast hiring isn't the answer. It's more like timely hiring, being pretty clear about out front. So everyone knows like you will miss out on candidates, but you probably wanna hold your standards fairly high in terms of who you let into your company.
[00:13:25] You can let, you can take, you always take a chance on somebody, even if they've been really successful in the past and have amazing references. Like you are still taking risk on somebody. So you just have to accept that. So I just think That what this should do for every company, whether you are Microsoft or whether you're a series a is could you live without the hire or not?
[00:13:44] And then what could the hire look like if you don't find exactly what you want, do you know is there some rationale around maybe like an under hire in terms of experience or an overhire and that's what we're seeing quite a lot of is like leveling up seniority, cuz people just. [00:14:00] Haven't got time, energy to train
[00:14:01] But think we've had people hired recently that weren't as qualified as other candidates, but had tighter value alignment. So they got the nod because they felt like that's what works for their business is value, alignment, over skill which I think is quite hard to measure, but they seem to have a grasp on it.
[00:14:17] We've had other examples of positions being downgraded to a more, let's say downgraded, leveled down to more junior people because the role's very ambiguous, so they don't necessarily need. People who've done it before. Cause it doesn't really exist. So they just want somebody in who can figure it out and is gonna be okay with figuring it out where some people who are further down the line may not want to do that.
[00:14:38] Being really mindful about it and intentional is the word that we are using. But then also having some sensibility. And openmindedness about for example I had a call last week where VP of people. They're both in the same city, the VP of people likes remote and wants to continue hiring remote.
[00:14:54] The C-suite exec does not wants all the leaders in the office two, three days a week. [00:15:00] And they are basically like going like this on a weekly basis. I think they'll end up. Using the evidence and the data to support the fact, they can probably hire stronger people, not in their city.
[00:15:10] So yeah, just, and they're laughing about it, but like saying, yeah, he's I want everyone to come in and sit around a table and have like coffees and sandwiches two, three days a week. And then the VP of people was like I think this is more productive. Being able to just do this. Yeah.
[00:15:23] It's like they weren't having an argument about it, but they were they're at inflection. Where they're having to decide. So that's good. Like being open minded is good and having some friction is good. And then again, they'll have to take risk, but they're talking about like making a few hires.
[00:15:38] They're not like hiring thousands of people. I think like for hiring teams, what's happened in the last two months should just basically be a reinforcement of the fact that you don't hiring is not always. The solution to like what your business needs and if you are doing it, it should take it really seriously.
[00:15:53] You should never really wanna be in a position where you're making mass layoffs. I don't understand how Carvana had, I think, [00:16:00] 12,000 plus staff and laid off two and a half thousand. Like I posted something about this recently. It was like, if the technology's that good and disruptive to, in that case dealerships, why so many head count? And then, okay, what's the revenue per head count or what's the profit margin and when's that gonna happen? Yeah,
[00:16:16] Jake: I think goes back to what you said at the very beginning, too. Just not pausing and thinking about whether you should, even though you
[00:16:21] Gareth: can yeah.
[00:16:23] Just cuz you can doesn't mean you should.
[00:16:25] Jake: Cool. I think it's actually puts us right about a time. Any other final thoughts before we conclude?
[00:16:31] Gareth: I urge everyone to just not focus too much on the doom and gloom because in the last month we've still had multiple new clients and multiple clients come to us for again, more important, critical hires. A lot of this is not like what people wanna hear if it's just been laid off. But I think it's just like broadly speaking, being more diligent, being cautious, looking after yourself, like looking after number one, having a backstop, having a wrong way.
[00:16:56] It's stuff that people should think about if they haven't got that in place already. And [00:17:00] yeah. Stay sometimes stay off LinkedIn, sometimes stay off social media and there's like plenty of good things going on out there. And it probably, it's just the, it's not the boring companies. It's just the more useful, the less novel businesses are the ones that tend to survive.
[00:17:17] Cuz it's the need. It's not like it's the pain killer versus the vitamin. And I think people. Sometimes don't wanna work in those businesses, cuz it's not cool enough, but like then you run the risk of not being essential to people or the economy. But yeah I think and then if you are thinking of a move, the proceed precaution and be diligent and treat you like you would a mass transaction, like buying a house or anything else.
[00:17:44] Done appreciate your thoughts.
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