When it comes to startups and tech, the place to be right now is Austin, Texas. Austin has been lauded as the new Silicon Valley — or at least a miniature, southern-styled version of that thriving tech ecosystem.
Like most trends, this one has been building for a while, and today the stats are impressive.
In-Demand in Austin
In June 2021, LinkedIn data showed a loss/gain structure of tech workers that may surprise industry veterans. The San Francisco Bay Area saw the highest losses (80.4/10,000 people) while Austin enjoyed the biggest gains (217/10,000 people).
Around the same time, WalletHub ranked Austin as the eighth best city in the country to start a business. And it’s not just a great place to start a business, either.
Established, heavy-hitting companies like Samsung and Amazon both expanded into Austin in 2021. And the tech giant Tesla announced a headquarters relocation to Austin. Bumble, the dating app launched in 2014, also calls Austin home.
It’s been a huge year for the already booming city, so it’s no surprise that the Austin Business Journal recently reported a record-breaking number of jobs in 2021 due to relocations and expansion.
Austin is — this is just the best way to say it — hot.
Navigating the Terrain
Given the industries’ phases of growth in Austin — with so many companies in the process of going from private to public — businesses are looking for certain types of experience in particular.
The city’s growing SaaS companies want accounting and finance candidates with a mix of public and private SaaS experience. Other highly sought-after skills include technical accounting, revenue recognition, and Sarbanes-Oxley (SOX) compliance, years one and two.
Interim talent is also prized at present to fill positions like CFO, CAO, or interim controller. Because they’re temporary, they don’t have to be a perfect fit for company culture, but they have the skills and experience to stabilize and move startups forward during periods of transition.
It probably hasn’t escaped your notice that this tremendous growth will require substantial hiring. While that’s a great thing for candidates and companies alike, it’s not without its difficulties.
Real estate used to be the driving industry in Austin, and the tech scene — at least at this level — is relatively new to the area. This means finding on-site tech talent can be challenging. While we anticipate that tech will become a predominant driver over the next two years, in the meantime the demand outweighs the supply.
Highly skilled and experienced tech candidates have typically lived and worked in coastal cities, such as New York, San Francisco and Seattle. Because more people now work virtually as a result of Covid, Austin-based markets can tap into this coastal workforce.
Although a win in many ways, hiring remote “A+” talent from traditional tech and startup cities can have some obstacles. Even in cases where a remote candidate 100% fits the need, some Austin-based employers find it difficult to pay the appropriate remote salaries — and not for the reason you might think.
The cost of living in cities like Seattle and San Francisco is much higher than the cost of living in Austin, and average salaries in the two cities match that difference. Even if a company has the budget to cover the discrepancy in salary, this structure creates an internal equity imbalance.
Imagine, for example, an Austin-based professional that’s been with a company for five years, earning an annual salary of $80,000. Now, because the market has shifted, tech talent is in demand and the supply of talent within the local marketplace is too small. Because of the opportunity for remote full-time positions, the company begins hiring talent from San Francisco.
This means that right out of the gate, new hires expect — and are receiving — salaries comparable to or higher than the veteran team members’ compensation. That’s not equitable, and creates problems of its own.
Finding the Talent
Recognizing the explosion of market growth and the barriers facing talent acquisition, how can you go about recruiting the best available Austin-based talent?
The first objective is to know what candidates want. The second is to hire a recruiting firm to help you. Here are a few things to consider.
Learn What Candidates Want
Many Austin-based candidates are looking for opportunities to earn equity in a promising pre-IPO company. Later stage (series C or D) companies are really compelling as they are more sophisticated with greater promise of an IPO. Candidates are seeking brands they can get behind personally, brands that are household names or on their way to becoming household names.
Candidates also want to work for companies of integrity and care. As such, they increasingly ask questions about diversity initiatives, maternity and paternity benefits, and community and social involvement so they can measure a company’s values.
Austin candidates further expect around a 25% to 30% jump in total compensation when switching jobs. This clocks in a little higher than the average of 20%. Keep in mind this is total compensation, so it can include annual bonuses, not just take-home salary. They’re also looking for positions that provide growth opportunities, both financially and professionally.
While equity and compensation are highly sought after, the most valuable driver we’ve seen for candidates in Austin is the opportunity to work from home. While for some candidates this means the ability to work 100% remotely, others are happy with a hybrid option.
Hire a Recruiter
A recruiter is an invaluable partner in an exploding market like Austin’s, but only when the fit is right. Here are some key things to expect from a recruitment firm’s pool of candidates.
- Specialized skill sets. Find out what skill sets a firm’s candidate pool typically has. Have they taken companies from private to public? Have they implemented SOX 404 or been part of the SOX compliance process? This type of experience lends itself to intimate knowledge of the finance and accounting needs of tech startups on their way to becoming public.
- Vast experience. Highly experienced consultants need less training, oversight and management. They’ve run multiple engagements at companies like yours, or they have so much experience that they can adapt easily.
- Collaborative capacities. Just because a candidate is specialized doesn’t mean they have to be siloed. Skilled, experienced candidates can also work across departments, in many aspects of accounting and finance.
Because the BVOH structure is relational, as opposed to transactional, we have trusted connections with a full “bench” of candidates with these credentials. Our candidates are highly experienced — often with over 10 years of experience in the tech and startup space. This allows us to pull from a deep, wide, strong pool of tech and startup talent to meet the specialized needs of companies in the Austin area.
The unpredictable changes we’ve come to expect in the tech and startup sectors are now unfolding at an exponential rate. Thanks to Covid, increased remote work, and burgeoning growth in cities like Austin, we’re all updating our definitions of “normal.”
Employers are wise to leverage the talent in any market available to them, while keeping an eye on factors such as candidate expectations and internal equity. A trusted recruiting partner — like BVOH — can help guide you to the brightest talent the market has to offer.
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