Australian startups need to hire experienced developers and product experts, and invest in traditional roles like sales and marketing, if they want to scale, but that’s easier said than done according to a Startup Talent Gap report from StartupAus.
The report, released today, is based on LinkedIn data about the kinds of roles going at Australian startups, combined with in-depth interviews and anecdotal evidence from founders of startups in scaling up phase.
In the conversations with the founders, a recurring theme emerged around demand for ‘product’ personnel.
When founders were asked which role, aside from chief executive, is the most important for achieving growth, product people were high on the list. But they were also named as a difficult role to hire for both in the past and right now, and it’s anticipated this will continue into the next five years.
The report notes “product is the most pressing concern for scaleups across the board”.
Speaking to StartupSmart, StartupAus chief Alex McCauley explains these ‘product’ people sit in between other departments, coordinating with engineers, communicating with customers, and working with management.
“It’s not a super-difficult job to have the right skill sets for,” McCauley says, “but it’s a new kind of job. People don’t naturally think about it”.
On top of this, “you can’t go to university and do a degree in it,” he says. Education doesn’t “offer a clear path” into this kind of career.
“There’s a difficulty for people envisaging how to get into those roles,” says McCauley.
The report also notes an emerging gap for data scientists in the startup space. Although this area was not considered difficult to hire for in the past, it has now emerged as a hiring challenge and is expected to continue to be so in the future.
Having the ability to collect and analyse data can be invaluable for startups, helping them to understand their market and fit their product to it, or create a new product for an underserved segment of it, according to the report:
“Very early stage startups lack capital for non-core employee roles and have smaller data sets, making data science an expensive luxury. However as they start to scale, the organisation has both more users and more ability to hire, leading to data analysis as a tempting strategic option.”
According to McCauley, this is part of a wider consideration around how “traditional skills transition into new jobs as the economy changes”.
Data scientists could come from a background of academic research, or other number-crunching roles, he says, as these skills are also applicable to data management in startups.
Again, part of the way forward is getting people in these more traditional roles to understand the opportunities available in the startup space.
It’s “a key part of the future of the workspace,” he says.
The scaleups interviewed by StartupAus also placed importance on the roles of sales and marketing employees, however, they were rarely considered difficult to hire for.
“When we think about startups, we think about the tech side, and the product they’re building,” McCauley says.
But, once they’re at a point where they have gained some traction and are thinking about scaling, they also need a strong team of sales and marketing people, “to get the product out there into as many hands as possible”.
“That’s super important in turning little early-stage startups into large and growing companies,” McCauley says.
“Investment is being made to grow business rapidly, you’re spending that money on hiring people quickly in sales and marketing. You already have an engineering team,” he adds.
The research concludes that, despite a focus on traditional and transferable skills, for scaleups the biggest talent gap is still in technical roles — and that’s a challenge that could be a barrier for growth.
“The data suggests closing that gap could open significant growth potential for businesses looking to hire in these important but less technical roles as the growth potential for companies is unlocked,” StartupAus says.
The LinkedIn data showed significant demand for technical developer roles, and also a reasonable supply, McCauley explains.
“Australia produces very high-quality graduates in the software development space,” he says.
The challenge for startups, however, is in finding senior software engineers, and people with experience in working in the space and growing products from scratch — people who could really help take a startup to the next level.
“Those people are in short supply and hard to hire. These are the people who have been crying out to get in visas,” says McCauley.
Startups were hit hard by the scrapping of the 457 visa last year, and the government’s new ‘entrepreneur’ visa has been widely criticised, drawing only one applicant in its first 12 months.
However, McCauley suggests the new trial visa program that came into effect last month could see new, more experienced software engineers joining Australian startups from overseas.
Having these people on board as mentors for Australian graduates to learn from is “the only way we will turn Australian engineers into top class talent,” McCauley says.
Passionate about the state of Australian startups? Join the Smarts Collective and be a part of the conversation.
