Tech Startups See Increased Hiring

It looks like startups will lead the way in tech hiring for a while. Nearly 90 percent – 87 percent to be precise – of startup executives plan to hire this year, according to Silicon Valley Bank’s Startup Outlook. That’s up from 83 percent last year. It’s also higher than the numbers cited in a Dice report released late last year, which found 64 percent of hiring managers in a wide range of companies expected to add tech workers during the first half of 2013.

“The difference doesn’t surprise me for two reasons,” says Mary Dent, vice president of public policy for Silicon Valley Bank. “Startups are growth-focused. They’re intent on taking an idea and translating it into a company. These aren’t small businesses or more mature companies that are focusing on the bottom line.”

Secondly, Dent noted that most studies find net job creation comes from younger, high-growth companies. “So it makes sense we would see more job creation with startups.”

Slicon Valley Hiring 2013

Funding Fuels Hiring

Obviously, startups have to be careful with how they spend their investors’ money. Aside from hiring, those funds must cover everything from office space to product design, development and customer support. Hiring, Dent notes, “is also dependent on how much capital you need and how far you can go with the capital that you have … Software companies are capital efficient, whereas life sciences companies require a lot of capital to run the business.”

Where Startups are Hiring

Enterprise software startups are expected to do the most hiring this year: Some 91 percent of those types of companies included in the bank’s study said they plan to add employees. Meanwhile, 90 percent of both hardware and cleantech startups expect to increase hiring, as well.

Other areas planning to hire, according to Dave White, president and founder of recruiting firm SC Palo Alto, are mobile/cloud companies who create applications that simultaneously share real-time information – such as photos, video and location data — through the cloud and multiple mobile devices and even automobiles. Another area is business-to-business e-commerce.

Startup Hiring Challenges 2013

Although Silicon Valley is a magnet for tech talent, companies in the region still complain about the difficulty they face in finding candidates with the right qualifications. Startups involved in mobile hardware products are having a hard time filling positions because of the high demand for professionals experienced with smartphones and tablet hardware. Semiconductor startups are also struggling.

These companies need to fill their openings more and more. As the economy improves, companies are pushing to get prototypes and products developed more quickly. One sign of those efforts is the types of hires being made when they first begin taking on staff. Currently, some 80 percent of those early hires are engineering and technology professionals, as opposed to marketing, sales and other types of business people.

Comments

  1. BY Jon says:

    Dawn:

    Great article. Can you recommend how a senior Executive (such as myself) seeking a new position should locate a listing of startups?

    Thanks,

    Jonathan

    • BY Dawn Kawamoto says:

      Hi Jonathan,

      Thanks. I would suggest you check out the Web sites of the top-tier venture capital firms and click on their companies or portfolio tabs. You can usually find a list of the companies based on sector. Once you find some startups that you are interested in, go to that startup’s Website and see when they received their last round of funding. Do a search for that startup’s name and the keyword “up round” (meaning an increase in valuation) or “down round” (a decrease in valuation) and hopefully you will find additional information. Focus on startups who received an upround or increased valuation on their last funding round from a top tier venture capital firm. Those may have the best shot of success. Some top-tier venture firms include Kleiner Perkins Caufield Byers; Benchmark Capital; Sequoia Capital; Accel Partners; Greylock Partners; New Enterprise Associates and Bessemer Venture Partners.

      Take care.

      Dawn

  2. BY Anthony says:

    Dawn,

    Thank you for a great article.

    I am also a senior executive looking for a change. Can you suggest where I can source a list of head hunter firms that caters to startups?

    Thanks and best regards,
    Anthony

  3. BY Lawler Group says:

    Great article Dawn. Companies are hiring, but it is all about hiring the right people. Companies seem to be struggling to get what they want and therefore are behind what they could be if more qualified people were out there.

Post a Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>