JULY - 2023HR TECH OUTLOOK APAC8Jordan Green, President Emeritus/Founder, Melbourne AngelsByStart-ups have been facing two connected, rising trends in recent years that challenge the vibrancy and economics of the sector. First, is a shortage of talent and second, is the associated rise in the cost of talent.With start-ups becoming the mainstream focus of almost every country in an effort to generate innovation and economic growth, workers have felt they no longer needed to compromise on remuneration. Seeking competitive market salaries for jobs in pre-revenue start-ups is the main contributor to start-ups becoming at least 30 percent more expensive to fund in the last five years.There has been a concurrent boom of new entrants into the start-up funding market across emerging VC funds, government programs, family offices, equity crowd funding services and a plethora of online platforms taking fees for matching founders with investors. Having so many new, unsophisticated, and inexperienced sources of start-up capital there has been enough funding to sustain the wages growth. With economic downturns, inexperienced, impatient and failing investors leave the market in droves, as is being evidenced in most markets around the world.Let's consider the other conundrum that has been a growing challenge. Everywhere, governments, unions, business bodies and the community at large are recognising the `shortage' of engineers and other technically qualified people to meet the demand of the technology driven start-up sector. In Australia, a recent report estimated the country will need an additional 100,000 engineers to deliver on the net zero by 2050 goal. Even larger numbers are being cited in the larger populations and emerging economies of Asia.Yet, universities and professional associations highlight that significant proportions, often as many as 25 percent, of engineering and technical graduates can't get jobs in their profession. It would seem one of these two things can't be right, there can't be a shortage of qualified people to fill the available jobs while there is also a shortage of jobs for the qualified people.Of course, life is never that simplistic. Some people are crying out that it is because the universities are not providing the right training. Others say that the increasingly short tenure of many employees challenges employers to invest in new talent due to the high cost of staff turnover. Yet, most corporates are still prioritising university qualifications in their recruitment and selection process, as are most start-ups, too.In my early days as a start-up founder (admittedly, last century) employees didn't expect to get paid properly until the company was generating enough revenue to fund their wages. That was one of the main reasons for providing equity participation, to offer at least the possibility of compensating for the early sacrifice. Today, most people approach start-ups expecting both full market-rate salaries and equity participation. They see it as a right, an entitlement, not a genuine compensation for making a sacrifice to help build the shared future of the venture. They want no sacrifice and all the upside ­ just plain greedy.Let's get back to the labour shortage issue. Have you seen the massive job cuts taking place in the tech industry across the globe? Some recent job cut announcements in USA tech companies include:· Amazon 10,000 jobs· Cisco 4,100 jobs· Coinbase 1,100 jobs· Docusign 670 jobs· Facebook 11,000 jobsTALENT BOOM FOR START-UPS!?Jordan Green
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