You’re the head of a market-leading company. You can offer talented executives and managers a lot, including:
· Job security
· Opportunities for growth
· Great pay and good benefits
· The chance to work for a respected and established brand
Yet, you consistently lose talented candidates to start-ups, which by the very nature of being a start-up usually can’t offer the security, pay, or name brand that your company can. And you’re not even losing young candidates straight of engineering or business school. Established professionals—including managers and executives—are choosing to work with a start-up rather than your company.
Maybe it’s the chance to make a whole lot of money. The business media is full of stories about early-stage start-up employees who became rich. However, while money is surely part of the calculation, most managerial and executive-level candidates are smart enough to know that the chances of getting rich when they go to a start-up are relatively minimal.
So why are talented executives and managers choosing start-ups, if it isn’t just about getting rich?
One reason is that working for a start-up feels like you’re a part of something new and exciting. Sometimes jobs at larger companies feel more like you are maintaining, rather than building—and building something new always has a special feeling.
Of course, there are other reasons why employees like to work at start-ups. A more relaxed company culture, an emphasis on results over office politics, and just the pure energy of working for a start-up make these new companies exciting places to work.
How can your company compete with that?
Many companies try to implement a start-up culture within specific divisions or work units. But as hard as companies try to make an “innovation division” within a company feel like a start-up, these efforts can’t mimic the life-and-death feel that comes with working at an actual start-up.
However, there is a radical solution some companies are trying.
Siemens AG, the German manufacturing conglomerate, has gotten involved in start-ups in a big way. In 2016, Siemens founded next47, a company-owned fund with a goal of investing 1 billion Euros in “disruptive ideas” over the next 5 years. next47 isn’t their first foray into the world of start-ups. In 2014 the company’s investment arm, Siemens Venture Capital, launched a $100 million fund focused on start-ups.
From a talent-recruitment and development perspective, what Siemens has done with next47 is incredibly forward-thinking. Employees working at Siemens-backed start-ups are still contributing to the company’s bottom line, and those employees can continue to work for the start-up as it grows—or be a future source of entrepreneurial-minded talent for Siemens.
The benefit goes beyond just talent development. Company-funded start-ups can be significant sources of innovation, where risks can be taken on new products and ideas in a way that can’t happen in bigger, more established companies.
Hiring talented people is a hard thing to do in any circumstance, but the relationships and chemistry within a start-up are especially important. The environment within a start-up is intense, and the way those personalities work together will go a long way toward the start-up’s success (or failure). In other words, strategic hiring is always important—but it’s even more important in a start-up, especially if the goal is to later integrate the best performers from company-funded start-ups into the larger organization.
At Robertson Associates, we’re excited about the idea of working with large companies that want to recruit and retain talent by creating or significantly investing in start-ups. We would be honored to help you find the team of leaders you need to make the new venture a success.
Our Partners have served as executives and CEOs in large corporations. We’ve faced competition from start-ups before, when we tried to recruit employees to our companies during the late 90s Internet boom. If you’re losing talent to start-ups, know that there’s a potential solution in the form of company-funded start-ups—and that talent may not have to choose between the excitement of working for a start-up and all the good things that come with working for an established market leader.
Pierre Collowald is a Senior Partner at Robertson Associates, a European Executive Search and Leadership Solutions boutique. Pierre is working out of Brussels, Paris and Zurich. firstname.lastname@example.org