December 1st, 2021 was a stunning day in Sydney. The kind of day that reminds you why more than five million people call the city home. The sun, which had taken a little longer to come out of lockdown than residents, finally showed up and competed with the ocean for attention.
In attendance at the Bondi Icebergs Club for the Product by the Sea roundtable discussion were 13 product and business leaders across various startups, scaleups, and enterprises, including Finder, Local Measure, Serena App, Love to Dream, Ordermentum, Scentre Group, Mad Paws, Mable, Adevinta (Gumtree, CarsGuide, Autotrader), CV Check, Secure Code Warrior, and the ABC.
They were joined by Brainmates and SustainDigital who co-hosted the event. Attendees were invited because they were known to be able to contribute to a robust discussion on Product. It was assumed that regardless of the size and stage of the company, they would be experiencing similar issues and could potentially benefit from the conversation.
There was no predefined topic but rather attendees were asked to drop their most pressing Product issues onto a post-it note on the whiteboard. People were not yet seated when the hot topic of the day became imminently apparent. What to do about the shortage of Product and Tech talent in Australia right now? Many reasons have been posited for this shortage from border closures to economic growth drivers. One thing became clear, whatever the reason it is systemic, significant, and unsustainable.
The topic extended throughout the day along three clear fracture lines:
- How to hire in this climate
- How to create a culture that retains
- And how to navigate the post-covid workplace to accomplish both
Part 1: The Hiring Climate
The consensus was that it is taking longer than ever to fill a role and there are fewer and fewer applicants with each round of hiring. Candidates with only two years of experience are chancing their arms and applying for senior roles, either reducing the relevant candidate pool from an already limited applicant set or inflating the salaries of existing team members if they are ultimately hired.
Most agreed, however, that money was not the issue. Salaries have been creeping upwards, to be sure, and new hire budgets are slowly being eroded by retention bonuses (more on that later) but generally the budget allocation for hiring of new roles was not a concern. At least not yet. It would be a curious exercise to check back next year and see if that continues to hold true.
There was a lively discussion around hiring graduates and introducing graduate programs. Some viewed the initiative as simply too time-consuming and costly for senior team members who have to train them to be professionals and to do their jobs unless they are very deliberate and well-managed programs.
Others see the pipeline as necessary and the ultimate win-win. Whether for or against the policy, one question, however, remains, how large of an organisation do you need to be to absorb the time cost of developing junior members fresh out of university?
Similarly, recruiting from within organisations, from disciplines that are a little easier to replace, such as Customer Success and Operations were viable options for some. But it does require an internal training program to onboard those individuals to the relevant practice and ways of working.
Another tactic deployed is the use of so-called Lighthouse hires. Incredibly talented people shining brightly enough to light the way for others, either as examples or as magnets for attracting other talent. A highly unscalable solution demonstrating the ingenuity and possible desperation starting to surface.
No matter the tactics deployed or the status of vacant roles, tempering the business by recalibrating expectations has become the norm. Australia might be accustomed to needing workers. Indeed, it has been our brand since the inception of free-settler colonies. But at a time when economies are trying to roar back to life, being thwarted by a lack of Product and Tech talent couldn’t be timed any worse.
Part 2: A Culture of Retention
It is broadly understood that aside from the occasional diaspora return there is a finite resource pool and losing a candidate is untenable in this hiring climate. Replacing star performers is even worse where the cost of hiring, onboarding, loss of productivity, and the effect on other team members is significant. Data from the Australian Financial Review suggests that the cost of replacing a star performer can be two to three times the outgoing worker’s annual salary. Ouch!
After a lunch hiatus, the group returned to the roundtable discussion to share stories on retention tactics and how they create a culture that makes people want to stay. The traditional approach of recalibrating base salaries to changing market conditions, increasing performance incentives, and adding retention bonuses is now considered table stakes and simply not enough.
A word to the wise from one of the leaders. Don’t set your retention bonus expiration dates on the same day unless you want to find yourself in the tricky situation of losing a handful of key players all at once.
So how are leaders elevating their culture and retention game?
By far the most implicit and successful approach is through inspiring a shared mission and sense of purpose. Leaders expressed that when team members are bought into the product vision and business mission they are less likely to need to be incentivised by traditional approaches.
Similarly, creating meaningful work, tied to business outcomes, that is interesting to employees is effective, but requires really understanding individuals and what drives them. It also demands a transparent view of the business through over-communication. It is one thing to understand how the work you do contributes to business goals, it is another layer altogether to understand how that translates to enterprise value created and ultimately the value of any share options in equity programs.
From the perspective of employees, career development through fomalised training opportunities and the inclusion of side projects within the development cycle was highly sought after during the hiring process.
Five additional days of “life-leave”, participating in offsite charity events for chosen causes, twenty-six weeks of paid parental leave for the primary carer, instituting meeting-free days, and paying superannuation while on carers leave were all cited as other perks introduced.
Besides the tangible benefits being offered many discussed how they were creating rituals around connection. Providing key “moments that matter” for team members to get together and co-create the company culture.
Part 3: Navigating a Post-COVID Workplace
Standing in the middle of the roundtable all day, obfuscating the beautiful view of Bondi Beach, was the proverbial elephant in the room. Should the post-COVID workplace be remote-first, in-office, or a hybrid of both?
The most interesting insight from the day was a comment on how somewhere along the way we lost the ability to have a rigorous debate on what is actually the right approach for both the business and employees. The ship has already sailed out of Sydney harbour and employee and candidate expectations along with it.
The right to choose where one is situated for employment post-COVID is the established norm.
Whilst a hybrid work environment seems to provide the ultimate choice, some smaller organisations are simply not set up to facilitate it and it is time zone dependent. Leaders are grappling with the unintended consequences of a “work from anywhere” approach.
There are legitimate concerns around the tax and insurance implications of employees taking the ethos literally and moving to other countries. Some have had to institute policies limiting the number of days a year spent overseas from 30-90 depending on the organisation and their legal structure.
It was broadly agreed that remote work does a disservice to early career stage employees who lose the opportunity to learn organically from those around them. Hard skills can be learned remotely but soft skills are often gleaned by example, not instruction.
Despite our best intentions with collaboration software, most felt that the highest value ideations were done in person even if collaboration software was still utilised. And this is where the debate on hybrid workplaces emerges.
How do you provide meaningful and productive collaboration with some people in the office and others not? And if the answer is that individuals must be on their laptops with video conferencing, doesn’t that undermine the benefits of being in person? Creative solutions to hybrid teams included one week per month in the office for distributed employees or a specified day of the week for collaboration.
A thoughtful consideration was that the decision to be in the office or not must be good for the organisation, good for the team, and good for the individual. It remains to be seen if balancing that trio of needs is sustainable.
Besides the view, good food, and some daytime drinks, if nothing else was gained from the day it was the evidentiary truth that no one in the industry is alone. The shortage of Product & Tech talent in Australia is a shared experience. Hopefully, hearing from peers and swapping strategies and tactics to hire, retain, and navigate the future of work was a helpful exercise, and half a day was well spent.
If you are grappling with any or all of these challenges yourself here is a summary from these thoughtful leaders:
- Consider graduate programs
- Recruit and train from within
- Identify Lighthouse hires
Retention tactics beyond the table stakes:
- Inspire a shared mission
- Create meaningful work
- Tie work to business outcomes
- Offer formal training
- Allow for side projects
- Provide lifestyle perksCreate rituals of connection
- Be intentional with your policy
- Consider “work from anywhere” implications
- Create opportunities for early-stage employees to learn
- Make collaboration productive and fair
- Balance the needs of the business with newly established norms
Thank you to everyone in attendance for a candid and timely discussion on the pertinent issues facing our industry.