Global PEO Services For Startup Employment
Let’s start this conversation with a few key statistics about startups and their survival.
On average, 80% of startups manage to make it to their second year.
- 70% make it to the third year.
- 62% make it to the 4th year.
- This drops to 52% in the 5th year.
Many people may be surprised to see this information, given that it’s a common belief that many businesses don’t survive that 1st year. Startups are a bit different. In order to make good on the initial investment that you make, a startup needs to be able to put its concepts into action. The key is having essential talent in place. Ultimately, you can have a great startup concept and ride that potential to a successful year or two, but without talent, that ultimately dwindles. So, with that in mind, here’s how you can make the most use of professional employment solutions for startups.
What Makes Talent A Top Priority For Startups
Part of the reason why talent is so essential for startups, aside from filling that need, is the fact that there are simply more openings to fill. What this means is that there is a general decrease in the amount of agricultural, industrial, and similar labor-based jobs. Startups generally aren’t having these types of vacancies, either. The highest areas of growth are generally areas like tech that require skilled, specialized talent. In one survey, the following skills were labeled as a top priority in hiring.
- Cloud/distributed computing
- Statistical analysis
- Data mining
- Middleware and integration software
- Web architecture and development
- UI design
This is mainly because even if you’re not a tech company, you still need a lot of these skills, like being able to construct and manage a website/app, or being able to collate and access data to guide business decisions. The fact that nearly every startup needs some of these assets is creating a “talent war”. Businesses are pulling out all the stops to make their companies more attractive to candidates with these key skills.
Startups And Employee Retention
Along with being able to draw in top talent, it’s also important to have a strategy to retain them. The startup life can be difficult, and turnover might be even more common here than in conventional business settings. There’s also a very tangible cost element to failing to retain your talent. The cost of turnover is roughly 2.5 times that of employment, but that’s not all. Startups need to position their company and products in the best possible light for potential investors, and a lot of that is a concrete team. If you present one team and then have to present a different one later, or can’t showcase the best talent you want because you can’t retain them, this hurts your startup’s image.
One silver lining here is that if you can get strong talent across the board, this helps your retention. Skilled employees are smart enough to recognize other talented professionals, and this gives them more confidence that your startup knows what it takes to succeed. Talent is your most valuable asset in more ways than one.
How To Attract Top Talent
So, with that in mind, every startup needs to have a talent acquisition strategy in place. This includes not only how to appeal to talent, but the actual logistics of hiring and employing them. For example, full-time employment may seem like the obvious option, but it may not be financially feasible to bring on every single employee full-time at the beginning of a startup.
This is why we see a lot of freelancers getting employed by startups. These professionals can have all the skills and experience you need, but you need to make sure that you are legally compliant with how you bring them on. Depending on where you are based and the actions you take, you may think you have an independent contractor, but they are truly an employee. Failing to file this properly can lead to consequences for your business.
With the heavy competition for local and domestic talent, you may need to think broader, especially if you have international expansion plans. This is where global employment services for startups comes in. A global PEO solution is a perfect way for you to make use of an international marketplace of talent, without exposing yourself to the web of international labor law.
PEO Providers For Startups and the Future of Employment
In many ways, the startup world is a proving ground for a lot of concepts that ultimately end up shaping the general workplace. The sink-or-swim nature of business at this stage means there’s always going to be some innovations required, both in terms of product and how the business is run.
As a result, to have the talent needed to power these areas, startups can’t afford to limit themselves in terms of talent. To open up a pool of international skilled workers, without the red tape of opening your own entity, it’s essential that you consider a PEO for startups. PEO (professional employment services) from a skilled industry partner like Acumen International can help you compliantly hire and retain the talent your startup needs to survive and thrive.
Reach out to us today for more information.