Workday Team
You also know how challenging it can be to find the right talent for your roles, in time against plan and forecasts, while also keeping an eye on budget and resources. All these pressures can make one feel the pull from a million directions - by hiring managers eager to fill roles quickly and other executives focused on long-term financial sustainability.
However, in this new era of sustainable growth, the tech industry is shifting from growing at any cost to more hiring "just in time" - making the right moves from a financial perspective. This shift towards 'just-in-time' hiring creates a new challenge for internal recruiters...
The Need for Speed (and Brad Feld's Rule of 40)
Our Go-to-Market team are lucky enough to speak to many incredible people daily at Empiric – many with burgeoning tech companies looking to take things to the next level. The smartest ones often say something along the lines of “the temptation may be there, but you wouldn't hire five salespeople just because we think we’re getting there”.
In the realm of SaaS, it's not about hiring a slew of salespeople and hoping for the best - it's about harnessing the power of data-driven decisions. To achieve sustainable growth, you need to be financially minded. What metrics are businesses running by?
We say it's time to shift focus to the stats, rather than the feeling. If your company is growing at a rate of 10%, you need a profit margin of 30% to sustain it. But if you're growing at 50%, you could still be losing 10%. It's a delicate dance, and that's where the rule of 40, as advocated by tech guru Brad Feld, comes into play. Feld recommends that the combined growth rate and profit margin of a SaaS company should equal 40% or more.
Be sure to read Brad Feld's Rule of 40 if you haven’t already - it describes the sweet spot where growth and profitability intersect.
Efficiency vs. a False Economy
The team often hear the refrain from VPs and senior leaders that there's “no budget to hire” It's a common challenge in tech recruitment. So, how are SaaS CFOs approaching recruitment in this landscape? The rule of 40 can sometimes be constraining, but it's essential to find a balance that aligns with your company's growth goals.
Many of those same companies claiming they have no budget for external agencies are experiencing application rates through the roof. But when everyone is focused on cutting costs, it's crucial to look beyond the recruitment line item, as delaying the hiring process can result in missing revenue targets. A recent study claims the time it took to fill a job vacancy increased by five days in 2022, from 18 to 23 days. With the average recruitment cycle for a SaaS sales role being 4-6 weeks, every delay can cost you a quarter, and in sales, time is of the essence.
If three internal recruiters must sift through 600 applicants, spending two minutes on each, that's a whole week of time on the budget sheet to process a load of applications where most weren’t right from the off. We'd call that a false economy in the drive for efficiency - We don’t want to see an increased cynicism of the market but unfortunately it can be a side effect of this way of hiring and the mindset behind it.
Your internal team may be overwhelmed with SaaS recruitment tasks, from sales to marketing roles, meaning the crucial jobs of market mapping and staying connected become challenges and it may become harder for them to keep their fingers on the pulse.
Quality Over Quantity: The Search for Gems
In your quest for the best talent, you may receive an overwhelming number of applications.
You don’t want to disparage people who are actively looking for a job and applying for your positions, but the truth is that you’ll never get the best people by just posting ads. From our experience, out of 100 applications, only about 5 are truly qualified and considered gems. The rest are eager but unqualified for the relevant role.
For certain roles, such as top salespeople, the ideal candidates are often happily employed elsewhere - earning well, being looked after, praised. Finding these high performers but passive candidates requires extensive networks, industry knowledge, and a commitment to building genuine relationships. Our headhunting team possesses these resources and the dedication to identify these hidden gems, presenting a shortlist of highly qualified candidates (expect 3-5, not 100), saving you time sifting through irrelevant applications.
The Value of Time in Recruitment
Have you ever wondered why some companies outsource their recruitment process instead of using their own internal team? Outsourcing may appear more expensive and less reliable, but there is more to the story than meets the eye. Price is what you pay, but value is what you receive. Using an internal team may seem cost-efficient, but time is the hidden cost in the recruitment process. Don’t lose sight of the reality beyond the line in a spreadsheet.
For cost of recruitment fee, the return in the long run getting a top salesperson who was passive in the market joining your team can be huge.
The Hidden Impact of Recruitment Delays
There are countless stories from companies who've experienced cost-cutting on recruitment that then has cost them more in the long run. It's certainly worth pondering as you embark on your SaaS hiring journey.
From go-to-market teams, there is a revenue target they're trying to hit, and they need those revenue-generating teams. The average recruitment cycle is typically 4-6 weeks for a SaaS sales role with 4-5 stages from first discussions to a presentation (which can take a week to in itself get sorted and booked in). So, from the average 6-week cycle for this role, that's essentially a quarter.
Generally, if you're two weeks into a month, there's a limited amount you can sometimes do! That's the same for any salesperson. Once you find the right candidate, there's still the notice period to consider, followed by the onboarding process, and so on. If you delay on this cycle, you could lose two to three quarters. The impact of such delays might not be immediately visible, but it's about looking ahead of time. CFOs, VPs of Sales, and anyone overseeing a region, or a broader remit face the challenge of chasing numbers while managing these time-sensitive processes.
For highly desirable but passive candidates, interviewing for a new role can be a turning point. If they perform well and attract interest from other companies during the process, it can trigger a shift in their thinking and make them more open to new opportunities.
A Partner for Sustainable Growth
You’ve probably experienced periods where sales teams seem to be heading in the right direction. Now, there's more scrutiny. Who in the high-performing teams is doing all the work? Is it 2 out of 5 people carrying the load? Perception often clashes with reality in the tech world, and this dynamic can create tensions between sales, talent, and CFOs.
At Empiric, we understand the unique challenges tech companies face in recruitment. For sales teams, we deliver speed. For CFOs, we provide cost-efficiency. For talent teams, we bring quality that might be elusive through direct advertising.
The key to sustainable growth in tech recruitment is finding the right balance between financial acumen, quality over quantity, and efficient processes.
Our dedicated Go-to-Market team is here to guide you on this journey, ensuring you have the best team in place to drive your company towards success. We are well placed and available to advise and help here, whatever your goal and growth ambition is. Through our many years of experience, we’re more than familiar with the importance of cultural as well as technical fit.
Learn more about Empiric's capabilities on our dedicated Go-to-Market page and be sure to subscribe to our newsletter.
