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Start-ups allocate much investment funding to tech recruitment

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Funding also channelled to skills development to counter skills shortage

According to new data, 54% of start-up businesses that have secured PE or VC funding in the last year invested capital in recruitment. This is up from 37% of start-ups that received funding before the pandemic.

According to Robert Half’s Demand for Tech Talent report, the focus on recruitment is a response to the current tight hiring market, with its challenges of securing top talent.

The research showed that businesses that have recently completed a funding round are looking to hire 206  new staff on average. This is why these start-ups allocate almost a quarter of their funding to hiring tech talent. This number is up from the pre-pandemic average of 18%.

To counter the skills shortage, many start-ups are also looking at upskilling existing employees to fill gaps. Fifty percent of tech leaders stated that their business spent at least some capital from a recent funding round on upskilling and training to ensure that talent shortages don’t stop them from achieving their goals.

The research went on to show that businesses that received funding in the past 12 months are more likely to invest in people than in mergers & acquisitions.

With scale, the priorities of small start-ups shift to hiring talent for business intelligence, leadership, and dev-ops roles. These help the new businesses find direction, develop a strategic growth plan, and ensure that their products are ready to handle rapid growth.

Larger enterprises with recent funding tend to focus on data management – which is essential for handling customer demand and protecting brand reputation. Large organisations focus their hires on information security (46%), cloud and infrastructure (44%), and business intelligence (43%) roles.

Robert Half’s updated 2022 Salary Guide showed that with the demand for business intelligence and data analytics roles, starting salaries in this area are currently the fastest growing in tech. Salaries have increased by 7.7 % over the past six months.

Craig Freedberg, Regional Director – Technology, at Robert Half, said: “Increasing headcount is crucial to being able to scale a business, but with start-ups looking to make mass hires after a funding round, adding to the existing demand in the market, it is becoming harder to secure skilled talent. Supply simply cannot keep up with demand, which is why businesses are investing more to find candidates and compete on salaries.”

“We work with businesses of all shapes and sizes, and their hiring priorities vary dramatically based on their ambitions for the future. While business intelligence and data roles are critical for identifying opportunities and threats wherever an organisation is on its journey, the demand for all tech roles is intense in today’s market.

“Everyone is playing the same game, and tech leaders need to think carefully about their strategy to ensure they have a competitive advantage when it comes to attracting and retaining great talent.”


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