On today’s episode of the RecruitingDaily Podcast, William Tincup speaks to Alison from Render about hiring top talent during a tech recession.
Some Conversation Highlights:
Listening time: 29 minutes
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Announcer: 00:00 This is RecruitingDaily’s Recruiting Live Podcast where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one overcomplicated topic and break it down so that your three year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup
William Tincup: 00:34 Ladies and gentlemen, this is William Tincup, and you’re listening to the RecruitingDaily Podcast. Today we have Alison on from Render and our topic is hiring top talent during a tech recession. Alison, would you do us favor and introduce yourself and Render?
Alison Baritot: 00:50 Sure thing. Thanks for having me, William.
William Tincup: 00:53 Sure.
Alison Baritot: 00:53 I appreciate it. I’m Alison Baritot. I lead the people team here at Render. If you aren’t familiar with us, we are a zero DevOps cloud platform, small series A company, and what we do is we can host anything on the web, simple to complex. We allow for the controls and flexibility of traditional infrastructure as a service companies, think AWS, GCP, but without the maintenance headaches of using those services. So that means that startups can build and launch their products really fast. Larger companies can eliminate the need to build expensive DevOps teams as they grow, and everyone can just focus on building their company and their product.
William Tincup: 01:36 I love it. Well, wonderful description of what Render does, because it’s actually really complex so-
Alison Baritot: 01:42 It is.
William Tincup: 01:42 But you made it sound simple, so I appreciate that. So let’s jump into the topic which is hiring top talent during a tech recession. First of all, what do you see? You’re sitting in San Francisco, so what do you see right now with tech talent?
Alison Baritot: 02:00 Yeah, so there’s a pretty massive shift over the last three months and we have seen here at Render just a total change in the frame of mind from hiring, folks that are doing hiring at startups, at large companies and candidates. The market was pretty crazy three months ago. We actually, here at Render, had to do market adjustments on all of our compensation bands in the upward direction to compete with the offers that our candidates were seeing from a larger companies, other small companies. And over the last few months that has shifted in completely the different direction. Everybody is worried about being laid off. Candidates are recognizing that companies aren’t hiring like they used to and that’s influencing their decisions, influencing their likelihood of jumping jobs, and it’s definitely also impacting the morale of our company, of every company, because there’s just a little bit of uncertainty no matter how stable your company is.
William Tincup: 03:25 So one of the things that, at the beginning of COVID in 20, let’s say March, that we went through a period of let’s say four or five months where we laid off, there was a bunch of layoffs. And then very quickly, we didn’t realize, okay, we still have to sell stuff, we still have to do things. And then we went on a hiring, I mean, for two years it was frenetic. It’s just this pace, salary, expectations, demands on remote work and all kinds of things. Do you see this as just the pendulum moving back a little bit to correct for some of… Maybe the correction of the correction? Or do you see this as something that’s going to last for a longer period of time?
Alison Baritot: 04:16 I think it’s a little bit of both. Certainly I don’t presume to be the expert on where the market will go and how long the pendulums will swing in this direction more broadly, but I do think that absolutely, at least the tech hiring space was due for a little bit of a correction either way. As I mentioned, the salaries, the offers, were getting pretty out of hand almost, and candidates had all of the control, and they still have a lot of it actually, believe it or not. But I do think that there was a little bit of a correction that was needed so I guess we’ll see where we land. But I think it really depends on the market.
William Tincup: 05:18 Right. So we’re talking about calibration really during this talk, is just trying to figure out, okay, how do we calibrate for our employees, in your case for Render’s, the hires that y’all are going to make. Salaries, obviously one component, comp is one component. I think one of the things that I saw was speed, how fast things were moving. Candidates, by the time we got back to them, they had already had jobs, or five or six job offers, so that speed. I was probably also dealing with how much they were in demand, but also expectations. Expectations of remote work or expectations around just all kinds of stuff. So as you look at it, again, you’re still hiring and you’re going to hire through however long this lasts, what are you going to recalibrate as it relates to your process or tech or the expectation management, et cetera?
Alison Baritot: 06:32 Yeah, that’s a great question. So a few things come to mind here. One is that I think, while a recession presents all kinds of challenges, there are some opportunities that come up as well. You mentioned generally how we would calibrate and I think one of the interesting opportunities right now, especially for startups, is to take advantage of the tailwind that there is less hiring competition. Some folks are unfortunately losing their jobs and use that to your advantage. There’s a little bit of a sense of, I think a lot of folks would admit, in the tech world especially, elitism. Historically, you want to hire somebody who has gone to Stanford or MIT and worked at Google or Facebook and this is the profile that you look for. But there are a lot of great people that will be looking for jobs right now. Maybe those that chose a less known startup that’s not going to make it through this recession, or someone graduating from a bootcamp that doesn’t have all of the doors opened to them.
07:56 And I think if you can shift your thinking and broaden your perspective a little bit to hire for skills versus their pedigree, you can, again, recalibrate what you’re looking for, still hire great, really talented engineers or any role, but take advantage of the fact that there is a little bit less competition. So that’s one thought. And I guess another would be really honing in on the pitch that you give to your candidates. So you also mentioned expectation setting and we were in this period where companies didn’t really have a lot of flexibility in terms of expectations because the candidates could name their requirements, they could work from wherever. And a lot of that is still true, but it doesn’t do company startups any good to engage all of these folks at large fan companies in these very stable roles during a recession and get them through the process and realize that, oh no, they’re not going to take a series A salary, or they’re not going to have the appetite for the risk of a series A company. And so I think setting expectations very early on in the process around, what is the opportunity? What is the upside of this? And also, what is the risk level? And assessing the risk tolerance of the candidate.
09:36 Getting recruiting teams very, very comfortable with that narrative and that conversation so that they can have that pretty honest, transparent conversation early on in the process can be quite useful. So yeah, I think those are a couple things to have in mind.
William Tincup: 09:51 Well, I love that you bring risk tolerance into this because it’s interesting because you live in the heart of the madness. When someone gets a series A in Chicago or Dallas or Atlanta, that’s usually a sign of a stable-
Alison Baritot: 10:07 That’s funny. Yeah.
William Tincup: 10:12 Stability is reached when someone is a series A. So that’s just, you live in a different world and that’s probably true of Manhattan and Boston as well. But I love the idea of talking to candidates upfront around risk tolerance because that’s an expectation. It’s like, “Hey, listen, you either want to be on this rocket ship or you don’t, and the rocket ship could blow up or it can take us to the moon. It could go either way or somewhere in between. Or if you’re comfortable working the job that you have right now, and that’s fine, that might change for you in time.” I love that. And I love talking about comp because comp obviously would probably be different from Google to series A startup. And again, but then the upside is equity and so now you can balance those things out and say, “Well, okay. Yes, the salary isn’t the exact same but you can participate from an equity perspective so that if and when a transaction happens, there’s a way to build wealth,” which is nice. I love talking about that. I love that you’re bringing those things up first. Dumb question alert.
Alison Baritot: 11:41 Please.
William Tincup: 11:43 Active versus passive candidates. Historically, we’ve had a bias, whether or not we talk about it or not, we’ve had a bias against active candidates. What’s your take on, if we were to approach somebody that’s got a job right now at another series A startup, so we’ve gotten past the risk tolerance and comp issues, but they’re at another series A startup, then with uncertainty, their willingness to leave what they know for what they don’t know. Is it easier or better right now for recruiters to just focus on active talent because they’re actively looking or do you think that we still look for people that are passive because they have jobs?
Alison Baritot: 12:33 Good question. I totally agree with you on there being this bias and that’s essentially why I mentioned that sometimes, especially leadership outside of the recruiting world, say you’re head of engineering or your founders at one of these companies can perpetuate that bias by feeling a little bit allergic to these folks who are coming in and wanting a job and thinking that, oh, the only talent that’s worth having is those that are at the successful companies, that are in a stable role, haven’t been laid off, aren’t considering this move. So that exists and I do think that broadening our perspective there and really taking advantage of these active candidates, especially in this market, can be very powerful. There’s a lot of ways to evaluate the talent and skills of candidates that you don’t have to rely on just these factors like whether or not they’re at a solid company right now and it can also diversify your team a lot.
13:57 So typically when companies are stuck in this mode of, “Oh, we’re only going to hire our referrals or from these companies that we know of and we’re only going to invest our time in picking out these hand selected folks,” you can get a very homogenous group of people. Whereas if you’re going to open your minds a little bit to candidates with different backgrounds who, for whatever reason, especially in this market, may not be in a job or may not be in a job that they want to stay in, I think you can get a much wider variety of backgrounds and perspectives in your company, which is a goal of pretty much all of us right now.
William Tincup: 14:48 I love it. How would your best tip or trick to evaluate skills both known and the transferable or tangential skills that one might have? Is there a secret? Is there a secret recipe, Alison? How do you go about it?
Alison Baritot: 15:11 Yeah, so I was so impressed with Render’s process here when I started. I’ve only been at Render for about six months now. And when I came in and started learning about the recruiting process that the team has built, I realized that our process here is really, really sacred to the company. So it’s not something that our recruiter put into place and everyone else begrudgingly follows, it’s looked at as truly a critical piece of how we hire. And because there is this buy-in across the company, people are willing to be very deliberate and thoughtful about the way that they’re going about interviewing. And so a lot of companies that I’ve been in, it’s kind of like, “Oh, you’re going to hire for this role so we’ll throw in the four or five people that make sense for this lineup on and maybe give them some vague criteria to test for and send them in and have them have some conversations.”
16:20 And that is unlikely to give you a lot of data on, well, really anything besides whether or not you enjoy chatting with this person. But the way that Render does it, and in my past life, Dropbox was really great at this as well, is just being extremely deliberate and intentional around every interview. Making sure that every conversation you have with a candidate is targeted at getting at one particular skill, one dimension that candidate needs to have to be successful. So it’s really around rigor.
17:00 The other thing I would mention is, for technical hiring, which at Render we are doing so much of, the majority of our hiring is engineers, there are a lot of platforms out there to help with this. My last company, Triplebyte, many of you may have heard of, is designed to do exactly this, is to give you skills data on engineers versus that pedigree resume. But there’s a number of companies that are doing that right now and it would be great if that existed for more than just engineering, but especially for the software engineering hiring right now, there’s really a lot of opportunity to get pretty skills based with it.
William Tincup: 17:46 So one of the questions I wanted to ask you is, are we rethinking the definition of top talent with the recession, with what’s going on with the economics and also just people feeling a certain way? Are we rethinking what is and isn’t top talent?
Alison Baritot: 18:11 I think we should be. Whether we are-
William Tincup: 18:14 There you go.
Alison Baritot: 18:14 Is another question.
William Tincup: 18:18 That’s exactly how I should have phrased it. Should we be rethinking the definition of top talent? Because you mentioned it earlier, it’s like, okay, we’re kind of pedigree driven and name driven. If you’ve worked with these certain firms, certain companies, then obviously you’re successful and you’ll be successful here which none of that is true, it’s just an illusion. But it’s an illusion, a lot of people buy into the same illusion so it becomes real at some point. How does this recession help us rethink that?
Alison Baritot: 18:54 Yeah. As we said, I do think that we should be doing this. I think it’s a work in progress. It does require a mental shift that is going to be a little bit… It’s been a work in progress for a while. I think companies have been coming to this realization over the last 10 years, I would say. I will say that the framework that leadership and hiring teams have, at least in my experience today, has improved in this respect quite a bit from the 2010 era tech world, but we still have a ways to go.
19:54 I do think that a recession can be a good opportunity to force this a little bit more and I think looking at, what does success look like on our team? When we are a little bit more experimental, when we are maybe quote, unquote riskier in our hiring because we’re not following this pattern that we’ve become comfortable with. How does that work out in the organization? I find, in my HR capacity, that a lot of times the folks that are really successful are those without the specific experience. They’re the ones with the hunger, the drive. And if that’s true then can we hire for that? Can we assess that in the interview process? So I think it’s an opportunity, it’s not going to come without some work though.
William Tincup: 20:59 A hundred percent. I think you had mentioned diversify. This is a great time to diversify what we think of as top talent also. There’s more candidates on the market so hopefully there’s a way to look at that and if we’re trying to push different DEI initiatives, this is a wonderful time to now because we don’t have the same frenetic pace that we did of a couple months ago, we can actually slow things down and maybe find more diverse talent. Am I making that up or do you see something similar?
Alison Baritot: 21:38 Oh, a hundred percent. Absolutely. When we feel that we can build our team with just referrals, and you’ll hear companies say that, “Oh, we primarily hire referrals. That’s our strongest hiring pipeline, and yet diversity is really important to us.” Those things are nearly always at odds with each other.
William Tincup: 22:07 Yes, they are.
Alison Baritot: 22:08 And so I think taking advantage of a lot more candidates on the market, a lot of candidates with different backgrounds. Another thing that I would mention is that oftentimes, companies are still hiring during the recession, Render is, but those hiring targets may have decreased. And so you might find yourself with some time on your recruiting team’s hands and you can invest that time in building the program and specifically iterating on the interview process to make sure that you’re assessing for skills that the candidates actually need to be successful. Or building your employer brand to show your diverse and inclusive culture. Or investing in training for the team on how to conduct a great interview process. And so it is harder sometimes to find diverse profiles because you don’t know exactly where to look, you don’t know what exactly to look for, and so perhaps many teams could use this slow down in hiring as an opportunity to target those different profiles.
William Tincup: 23:27 Yeah, I think you nailed it for me. It’s, again, referrals the only time I’ve seen that work as it relates to diversity is when you incentivize people to refer diverse talent. So it’s not just refer a friend which looks a lot like you, it’s refer someone that doesn’t look like. It’s people that aren’t like you. I’ve seen that work, but just referrals on their base, it’s a whole lot of like me type stuff that ends up happening. Let me ask you, the last question I have is around morale, because we’re dealing with recession, y’all are still hiring. You’re going to hire slower, probably it’ll be a little bit more deliberate in your way that you go about it. Maybe you’re not hiring the same volume of people and maybe you’re going to be a little bit more deliberate. How do we keep morale in HR and TA? How do we keep morale up?
Alison Baritot: 24:30 It is so hard. I think every people leader over the last two and a half years has asked this question.
William Tincup: 24:38 Oh, yeah.
Alison Baritot: 24:39 Daily. Monthly.
William Tincup: 24:40 Oh, questioning life decisions. I could have been anything. Why did I choose this career?
Alison Baritot: 24:50 It is so hard. And no matter where an individual company is, we are still hiring, many startups are still hiring. Yes, that’ll be at a slower pace, but employees are going to feel unstable, they’re going to feel uncertain or feel scared. And the whole mentality has changed. This may be something that’s a little bit more unique to this, where I am, the Silicon Valley mentality, but when things are good, there is just this, everyone’s drinking the Kool-Aid. There’s nothing that can get us to down and we’re all on a rocket ship to the moon. And that reality check that happens when the market changes, especially for those earlier in their career who haven’t seen this before, can be quite traumatic. So some things that we are doing, I don’t think we have a magic recipe here, and I won’t say that we do. I think as transparent as you can possibly be about the state of your company, the better we share our runway with our team, our cash runway, how long do we have before we need to do another round of funding? What exactly are our investors saying in terms of what we need to work on and how they think that next round of funding would go for us?
26:27 Repeat it. So a lot of times the leadership of the team says, “Oh, well, we explained that last month, they’re good.” And no, this stuff is, first of all, it’s a little bit hard to grok if you’re not in it every day. And secondly, when people have that, when emotions are tied to it, I think repetition can be very helpful. So really just driving home the message of, where is the company? What can we count on? What do we need to work on? And making people feel like they’re part of it versus just along for the ride, I think can be a big help. I think a lot of it comes down to managers just understanding that these emotions might not even always be rational, but they are coming up for people and giving them space to feel that and space to talk about it. But there’s no magic recipe here.
William Tincup: 27:34 No, but I think that you’ve nailed something that actually has alluded me in terms of the first four or five months of the pandemic, HR was thrust into not just employee communications, but corporate communications, even more so than most people thought of it. Everyone looked to HR like, “What are we doing?” And so both of the two prong strategy of transparency and communication, it’s like, “Okay, we don’t know what we don’t know. Okay, tomorrow, we don’t know what we don’t know.” I mean, this whole idea of transparency and almost to the point of over communicating, which is, I don’t know if you can do technically, but let’s just go run with it. I love the idea of repetition that you mentioned because it’s like, listen, these people, everyone, again, people working in demand generation and marketing, they’re not steeped in what investors are thinking about the market. Or maybe they are, but the idea is even if they are, it’s still no excuse not to communicate. So I love that y’all communicate your runway and also what’s going on with attitudes with investors. But I think essentially you do have a magic bullet in the sense of it’s what worked for you and what worked for a lot of HR and people leaders at the beginning of the pandemic with transparency and communication. So you do have a magic bullet.
Alison Baritot: 29:05 Great. I’m set then.
William Tincup: 29:06 Done. Hey, Alison, thank you so much for your time and your wisdom.
Alison Baritot: 29:11 Thank you, William. This was really fun.
William Tincup: 29:13 Absolutely. And thanks for everyone listening to the RecruitingDaily Podcast. Until next time.
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William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.