Happy New Year!
Nick Cromydas is the Co-Founder and CEO of Hunt Club, a tech-enabled talent and recruitment company placing leadership roles across the fastest-growing companies in the tech sector.
Based in Chicago, Hunt Club has helped over 1,000 high-growth companies land incredible leaders, helping many of them scale their business from seed funding to unicorn status in a matter of years. By leveraging its technology, talent network, and the power of referrals, Hunt Club helps companies find their next great leader faster.
Prior to Hunt Club, Nick founded New Coast Ventures, a Venture studio that started or invested in over 50+ early-stage startups (4 unicorns) with material exits to companies like goPuff, Compass, and more.
M.R. Rangaswami: Is now the right time to hire, given multiple retractions in the SaaS and tech space?
Nick Cromydas: The short answer is, yes.
Historically, downturns are a great time to a) build a business and b) slow down to re-evaluate your business & focus on getting product-market fit right. We are seeing this shift through the hires companies are pursuing now, versus roles they focused on in previous years, where growth for growth’s sake was driving much of the market.
It’s really a tale of two cities. The media continues to share news around reductions, creating fear in the marketplace, but our team is on the ground helping as tech companies continue to hire. For the most part, growth-stage businesses have plenty of cash.
While the period of hypergrowth and high valuations has cooled off, over $643 billion in global venture investment was deployed in 2021, meaning startups are equipped with cash in their reserves. Founders are just being much more thoughtful in how they deploy those dollars.
Looking ahead, $290 billion in venture “dry powder” dollars are sitting on the sidelines with $162 billion earmarked for new investments in 2023. Analysts predict that this capital will be deployed next year, reinvigorating tech and startup capital, thus boosting hiring volume needs in the new year.
My sense is, as inflation eases and investors start to gain confidence again, we should see a surge in hiring across the tech sector in H1 and H2 of 2023. They might not hire at the same velocity we saw in 2021, largely due to the fact that capital markets won’t be as liquid, but strong balance sheets in Q1 and Q2 2022 are helping to sustain normalcy.
MR.: What are the top talent trends you’re seeing right now?
Nick: Companies want to hire, strategically.
The volume of businesses with intent to hire has not gone down, they are just being much more thoughtful and intentional about spinning up new roles or growing teams too fast. They are also reprioritizing where to deploy dollars, focussing on roles like engineering, product and operations.
In 2021 and the first half of 2022, the scales were flipped. It was a candidate market and employers had to fight and open extra roles to build benches. With the Great Resignation followed by Quiet-Quitting, it was an all-out talent war to secure top talent. That combination created a deep deficit in top talent over the past two years – with many key roles left unfilled. Now, with the unfortunate workforce reduction taking place across industries, there is an opportunity for that talent to be absorbed back into the workforce, quickly. As a result we are having very strategic conversations with our customers about what positions they need to fill now versus where they can hold off to get by to maximize budgets.
This is particularly true in the tech sector, where unemployment most recently fell from 2.2% to 2% in November. There is a healthy tension between the number of open roles and the caliber of talent needed to fill those roles.
The hybrid work model has also driven the need for dramatic innovation, stumping many founders on how to transform themselves to keep up with changed behavior in a digital-first workforce. This means both search and internal talent acquisition needs to change and there has been very little innovation in the space that has achieved scale since LinkedIn. Without a playbook on how to build the best teams, Hunt Club has helped growth stage companies navigate through these changes, offering an effective way for them to reach top talent regardless of their own network or geography.
Another interesting point is that compensation levels have not materially changed due to layoffs and current market dynamics, and they do not show signs of coming down to pre-pandemic levels. In some cases, the salaries are higher than ever. In others, they seem to be on par since 2021. Geographically, the top 4 markets (SF/ Bay Area, NYC, LA, and Boston) have driven 68% of VC investments so far in 2022. These markets continue to hire across state lines due to remote work flexibility since the pandemic.
Demographic changes to the overall workforce are also causing a ripple effect. Aging baby boomers are increasingly retiring from legacy c-level role positions. At the same time, a supply deficit of digital-first talent is making it harder for companies to reach and secure the right people to lead. Companies can’t afford to get these hires wrong, making the need for innovation and accuracy critical to how they approach talent acquisition.
MR.: How are the best leaders handling a looming recession?
Nick: As we’ve scaled Hunt Club over the years, I’ve had the advantage of partnering and learning from top CEOs and investors who are building the companies of tomorrow, while dealing with the challenges of today. The leaders who can tactfully navigate the stages of discomfort and doubt, while staying focused on what’s most important – without creating unnecessary panic, end up on top.
When we encounter a downcycle, we’re all looking for ways to reduce spending, while trying to keep the focus on growing product market fit – a juxtaposition that can feel daunting. Talent is not one of the areas where good leaders skimp out. In order to withstand recession volatility, the smartest companies are focused on making sure they have strong leadership in place to help guide and weather them through the storm.
We are indeed seeing some slowdown across B2C and other sectors, but there are also pockets taking a counterintuitive approach to the macro-market, where hiring is still a top priority. For instance, leadership talent is top of mind for many growth-stage companies and we haven’t seen a drop in those roles. Savvy, forward-thinking founders are actively looking for experienced leaders who have managed through turbulent markets to help sustain and optimize operations. Going back to where we started, early-stage companies recognize that the best time to build a business is often in a downturn. A boomerang market is an opportune time to build foundational teams to drive future growth and scale.
M.R. Rangaswami is the Co-Founder of Sandhill.com