Startups struggle to find right talent, with nearly half citing staff as reason for failure

Just under a quarter of the founders and startup executives who took the survey said they strongly agree that they have difficulty in finding the right talent for their company and over half of the respondents agree that it is difficult finding talent.

Staffing issues were cited as the primary reason for failure, with 41 per cent of startups saying that things don’t work out because teams lack the skills to execute on ideas, don’t collaborate effectively or founders simply can’t find the right talent. The second most popular reason cited for startup failure was lack of funding.

When looking for new recruits, web development was cited as most sought after skill and demand for technical roles was higher than demand for non-technical roles. 60 per cent of startups said they were mostly looking to fill technical positions while 40 per cent said they were mostly looking for recruits to fill business development and sales positions.

As for softer skills, the ability to work in small, fast-moving teams is most in demand with 37 per cent of startups identifying this as most important when evaluating candidates. Just under a quarter said they’re mostly looking for good communications skills in new recruits.

An overwhelming amount of startups said they source the majority of new recruits through their professional network and referrals. Only 24 per cent said they hired from direct applicants and a mere 6 per cent said they source new candidates through recruitment agencies. However, less than 10 per cent of startups said social media had found them talent.

New joiners are expected to hit the ground running at startups: 62 per cent of respondents said that they don’t have any formal training for new recruits at all and under 10 per cent said new joiners do external or online training courses.

While one to three months is the most common time frame to find staff, 30 per cent of startups said it took them more than six months to fill a position.

Commenting on the survey results, Startup Institute founder Aaron O’Hearn said: “It is alarming to see the extent of staffing challenges in the startup community. While there is much talk about startup hubs thriving, there is a real danger they won’t reach their full potential because the talent pipeline is not strong enough.

Short on time and resources, founders are struggling to find new recruits who can add immediate value in fast-moving teams. This is a worrying trend and it’s important to bring this to the public’s attention as high-growth technology companies continue to play a bigger role in the economy. Governments are thankfully taking note and I hope initiatives such as the Year of Code in the UK will be successful.”