Recruitment and retention tips for startups in 2023

We’ve just made it through one of the toughest years for the economy on record, but what does 2023 have in store for us and how will it affect recruitment for startups and SMEs?

As of now, the UK is in a recession but despite unemployment being higher than pre-pandemic levels, it’s still not as low as you would expect in this kind of economic turmoil. It’s a strange time, that’s for sure. 

The current situation is a tricky one for small businesses and startups, and it’s even more important than ever before to find the right candidates to help you move forward to success.

As times change, top talent candidates want specific things from their place of work and it’s important to know their wants and needs, so you can work out a strategy to tick all of those boxes. 

Let's take a look at the recruitment trends small businesses and startups like yours can expect to see. These trends go a long way to helping us understand what candidates want from their workplace. 

But, before you look to hire...

Retain the talent you have

The cost of recruitment is rising by the month and as the search for top talent takes time, it’s far more business-savvy to keep your current employees happy.

Not only are engaged employees more likely to stick around, but the cost of replacing a single employee alone could be the same as six to nine months of their salary or more!

So, how can you keep staff happy? Firstly, consider an employee engagement survey. Ask your employees how they feel about their job and what they want. Then, assess the replies and work out a strategy.

What extra benefits can you offer your employees? And not trivial benefits you think they want, but meaningful benefits like flexible working hours, health and wellness perks and an employee share scheme.

A share scheme is like the key to unlocking a new level of employee engagement.

When thoughtfully designed and implemented, a share scheme can align a team behind a common goal (i.e. the business' success) and motivate them to stick around to see it through.

Download our free guide to learn more or go ahead and book a free call with one of our equity specialists to explore possibilities for your business.

By doing your best to keep hold of your current employees, you’ll reduce costs and upheaval. But if you do want to move forward and recruit new talent, what else do you need to know?

Retention trends to look out for in 2023

A stronger focus on diversity and inclusion

It’s important to realise that a diverse group of staff can help you to come up with new ideas, foster creative solutions, and boost profits as a result.

While many businesses have understood the importance of focusing on diversity and inclusion, many have not gone all the way to implementing it fully. In 2023, this is about to change.

SMEs and startups need to look toward a more diverse workforce by looking carefully into what characteristics and talents a candidate could bring to the table in terms of diverse thinking.

We all know that the echo chamber issue is a major one, but diversity completely knocks that out of the park.

Creating strategies to evaluate candidates in greater detail will help businesses to move away from bias in recruitment and move toward inclusivity and diversity.

A technological edge to recruitment

Today’s talent requires everything to be done quickly and virtually. This is particularly the case with Gen Z applicants who want to see a business using technology in innovative and useful ways.

This includes implementing technology into the recruitment process and involving candidates at every step of the recruitment process.

If your recruitment process has long been slow and paper-based, it’s time to upgrade and get things moving. Today’s talent expects more! Be wary not to overdo it with an arduous interview process though.

Remote working is still on the rise

The pandemic opened our eyes to remote working as a regular part of our working lives, but this trend looks set to increase in 2023.

Candidates want to see remote working opportunities and flexibility in their workplaces, including in the hours they work. This can be very useful for a small business or startup as it means greater cover throughout the day.

As we move towards an even more technological age, remote work is becoming easier and easier. We shared our top tips for setting up a remote team here.

As long as each individual has a strong Internet connection and the device and tools need to do their work, they can often work from anywhere they choose.

At the very least, hybrid working should be an option.

Offering these opportunities helps to not only retain your existing staff, but attracts new talent, and cuts down on overheads - an important aspect for a small business.

Be flexible if you want the best talent

Flexibility looks set to be a major recruitment trend in 2023 right across the board. Applicants have a much greater focus on their home and work-life balance and they want to see businesses ticking those boxes.

If you worry about productivity being affected, don’t be. Key performance indicators (KPIs) can be implemented to ensure that every employee does exactly what they’re supposed to do, even while enjoying flexibility.

The same goes for share schemes by the way - you can weave mutually agreed performance or time-based milestones into equity agreements.

In 2023, the more flexibility you show, the better the talent you attract. That means offering flexibility in hours, where a person works, and the type of contract they have.

This recruitment trend was backed up in a recent podcast by Talent Matters. Cara O’Leary, LinkedIn’s Sales Director, reported that the number one priority for job seekers these days is flexibility. 

And it's not just flexibility that matters to applicants. The results of our last survey show that Brits choosing between one job or another would be swayed by a company share scheme.

Key takeaway

These recruitment trends for the coming year aren’t especially different to implement into your recruitment process.

However, before you start overhauling how you look for top talent, remember to focus on retaining the quality employees you already have.

In many ways, especially for startups and SMEs, you need to focus on a two-pronged approach here.

The first is keeping who you currently have on your books happy, and the second is looking for the best talent by giving them what they want (where possible).