Navigating Divergent Priorities

In a competitive recruiting environment, founders and hiring managers at early-stage tech startups face particular challenges. In our research, Sequoia found that recruiters’ top hiring criteria for potential employees—more even than technical ability—were a sense of ownership, agency and the capacity to fit in with company culture. But for engineering candidates, these factors ranked last when choosing employers.

Sequoia surveyed 1,035 tech workers and graduating STEM students about how they weighed job opportunities. The top three factors influencing their decisions were: salary and benefits, work-life balance and job security. This was true for both current engineers and students. For all, fitting with company culture came dead last (Figure 1).

It’s worth noting that our survey was conducted in 2022, as the market turned down and layoffs picked up: financial security was surely on candidates’ minds. But the undeniable reality is that companies and candidates have diverging priorities.

In the current labour environment, both companies and candidates are under pressure: recruiting is competitive as unemployment remains low, yet candidates feel the looming spectre of tech layoffs and rising inflation. In this climate, there’s a risk of companies and candidates overlooking their differences in their eagerness to hire and be hired. However, the increase in location flexibility means companies and candidates alike have access to a larger pool of options and can cast a wider net to find the right fit. For workers, this may mean a balance of passion and stability. For companies, it might mean finding engineers who fit the team culture, regardless of location.

A London-based tech CEO told us that company culture remained an important component of attracting talent: “Companies with strong culture find it easier to hire. Top-down, micromanaging businesses will find it harder.” Sequoia’s Zoe Hewitt notes that exceptional companies tend to create cultures that encourage an entrepreneurial mindset and draw in outlier talent. This also plays a vital role in retaining key employees.

To attract candidates, some companies are exploring non-traditional sources of talent, our research found. The self-directed qualities recruiters seek may be found, for example, in self-taught engineers without university degrees, who might be overlooked in traditional recruiting pipelines.

Despite the challenges, tech startups have an advantage when recruiting the next generation of engineers. In our research, student candidates finishing STEM degrees ranked the tech industry as more promising than other industries in every dimension except diversity and inclusion. When considering the factors most important to this cohort, over half of these students believed that the tech sector offered better job security and work-life balance, while 65% anticipated better salaries and benefits compared to other industries (Figure 2).

In a competitive hiring environment, companies and candidates may have misaligned priorities. To close the gap and find the right match, startups could consider candidates from a wider range of locations, looking beyond the traditional—and nearby—talent pool.

Looking to hone your search? Use our interactive map to find outlier concentrations of talent for the role you’re filling.