Startups Want to Hire, But Worry They Won’t Find the Talent They Need

cover-startup-outlook-reportMore tech startups than at any time in the last four years will be looking to hire this year, says Silicon Valley Bank, but they worry they won’t be able to find the talent they need.

Even as most leaders and founders of the firms surveyed by the bank for its annual Startup Outlook say conditions in the U.S. are better this year than last, the number of them who report hiring talent is their biggest challenge has grown. Nine out of 10 executives report finding and hiring the talent they need is their biggest challenge.

The annual survey says 87 percent of the tech startups reported plans to add staff this year. That’s up four points from last year, and 14 points from the first survey conducted in 2010. The strongest market for startup hiring, according to the report, is Texas. The Boston area and metro New York are third and fifth respectively.

Talent Challenge

Software and hardware startups report having the hardest time finding the tech talent they need. For healthcare sector firms, hiring is not quite as much of a challenge — 17 percent describe it as “extremely challenging” compared to the next lowest scoring industry, cleantech, where 23 percent described hiring that way. However, healthcare startups are also the least likely to be adding staff, at least compared to the sectors.

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Silicon Valley Bank startup hiring challengePerhaps not too surprising, only the smallest of startups, those with fewer than 10 workers (which tend to be very early stage firms), say their biggest challenge, just ahead of finding talent, is the compensation it takes to land tech professionals. For every other size firm the biggest challenge is finding workers with the necessary skills.

Most in demand, especially among hardware startups, are the STEM skills; 82 percent of the executives said they are looking for those workers, and 40 percent reported no skills are more important. Only 17 percent said management, marketing, or other non-STEM skills are important to them.

John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.


8 Comments on “Startups Want to Hire, But Worry They Won’t Find the Talent They Need

  1. “Startups Want to Hire, But Worry They Won’t Find the Talent They Need”
    They can’t find the talent they WANT (attractive and outgoing under- 30 y.o.members of the Fabulous 5% willing to put in 80 hr weeks for average or below comp) but they can get the talent they need (everybody else). Furthermore , if there simply aren’t enough obtainable people who have there right skills for a company to success, isn’t that a fatal flaw in the business plan? As I’ve mentioned before, if you need only superstars (or too-rare skill-possessors) to succeed, then you’re on pretty shaky ground.



  2. This is a really interesting article, and addresses one of the problems we are trying to solve at MyEdu. We are trying to help connect employers with college students or recent grads that have the skills that they are targeting. We have some pretty great software that allows you to target students by skills, majors, classes, etc.

  3. I think it hinges on what type of talent you need. Software engineering skills are ubiquitous nowadays, with the trades and construction staff being harder than ever to find.

    Keith Halperin may be right when he suggests that certain startups may be relying on exploitative methodology. I know several who would fit into that mould.

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