Why managing talent is the No 1 challenge for start-up CTOs...

And how they can build a better tech team in the hyper-competitive talent market.

Gaurav Kumar, Co-Founder and CTO of a start-up that specialises in the food delivery business appears to have been dealing with nightmares. His frown lines are becoming deeper, indicating that he has a lot on his mind. On being questioned, Kumar revealed that the problem isn't a lack of funds or any shortcomings in the use of technology, but rather the difficulty in attracting and keeping top-notch tech personnel, as well as reducing high attrition rates. Well, Kumar is not the only start-up CTO with this issue.

Over the past six months, we have spoken to a number of start-up CTOs and founders, and the majority of them cited managing talent and striking the correct balance between managerial and technical talents as their top concerns. Why not, then? The consequences of a skills shortage can be extremely severe given the size of the changes the world is undergoing and the fundamental technological basis on which many start-up businesses are built.

Similar sentiments were shared by a recent study of 100 company founders conducted by debt-fund InnoVen Capital, according to which finding competent personnel to hire is the biggest difficulty facing start-up owners in India, and managing talent would be their top concern over the next 12 months.

Even established firms and their tech executives are juggling a lot to find the perfect tech fit for their company, so it's not like the skill shortage problems are exclusive to start-ups and their CTOs. The CTOs of start-ups, however, face additional unique challenges, in contrast to established IT or non-IT firms, where processes are already defined and potential tech hires could associate themselves with the company brand.

For start-up CTOs, overseeing the entire hiring process—from candidate selection to onboarding, offering opportunities for upskilling and reskilling, and, of course, ensuring outstanding employee experiences throughout their employment—represents a major priority. And only a select few have cracked the code.

The cover article for this month will look at some of the crucial factors that have elevated talent management to the top of start-up CTOs' concerns, as well as how they can get better talent in today’s competitive scenario.

Talent supply and demand gap

The lack of skilled workers has long been a big concern for the entire industry, and if enough is not done to address this issue by all stakeholders concerned, it will only get worse. According to NASSCOM, India currently has a demand-supply gap for digital tech talent of 21.1%, which is lower than that of the US, UK, and China. Still, it presents a serious problem because, by 2026, that gap is expected to have increased by more than 3.5 times.

Start-up CTOs struggle mightily to find a steady supply of top tech talent because of the growing demand-supply gap and competition. As the economy strengthens, tech talent begins to have more options from rival companies and major corporations, including better pay and work roles.

According to a LinkedIn survey titled "Jobs on the Rise 2022 India List," the majority of professionals who are quitting their jobs or express interest in doing so are citing reasons such as poor work-life balance (30%), insufficient pay (28%) or higher career objectives (23%) for their move. Flexible working arrangements are now a high priority for both tech and non-tech employees because of the pandemic, which has demonstrated to employees the advantages of flexible working hours.

There is a growing demand for excellent IT skills from all types of firms, whether unicorns or IT behemoths, as the majority of organisations, have gone digital. They are willing to spend a sizable sum of money to hire capable IT professionals. However, retaining talent has become extremely challenging for startup CTOs for a longer period of time because another company or rival is always willing to pay more for the same skill. In addition to pay, other elements including work environment, flexibility, culture, and personal objectives also play a significant impact in career moves. Because of this, industry experts feel that the CTOs in these situations should concentrate on a strategic talent approach to address the issues of talent hiring and retention.


Not only does the HR department require funding to increase recruiting, but CTOs also need to step up their game and collaborate with the talent team to create more employee-friendly policies. The majority of burgeoning businesses and unicorns have also established offices in hotspots for technology, like Bangalore, where they can access a wealth of expertise.

Lack of brand awareness

A large portion of the credit for India's start-up and unicorn’s unprecedented growth goes to the country's growing adoption of technology and the people using it to develop new and innovative solutions. Technology is helping these forward-thinking businesses to challenge the status quo of business, from digital healthcare and software-as-a-service to fintech, edtech, AdTech, ride-hailing, and grocery.

One of the most challenging tasks facing CTOs is encouraging IT talent to work for start-ups. You must earn people's trust if you want them to want to work for you. The CTOs and founders should be able to clearly communicate their vision for the company. For many CTOs and co-founders, especially in the beginning stages of their businesses, this continues to be a significant challenge. Even though they may have a disruptive product or an innovative concept with the potential to revolutionise an industry, many are unable to persuade the best tech talent.

Senior technology leaders from unicorns including Moglix and Infra.Market recognised that they had encountered these challenges initially because so many young IT professionals were ignorant of what they were doing in the market and how strong their brand was. However, when they began their branding initiatives, particularly on campuses, they were able to significantly alleviate this problem and were able to attract quality tech talent.

Greater social recognition among family and friends comes from working for a well-known brand than from a start-up company that is new or unheard of. In addition, many software developers and engineers would prefer to advance in more traditional, well-established companies than to begin their careers with start-ups due to the conventional belief that the work experience at the prestigious company will improve their employment prospects in the future.

The fact that many new businesses lack the necessary PR and branding skills when they first launch only makes the problems worse. Even if a start-up gives prospective employees a higher wage and more interesting job, if they are not aware of the company or market reputation of the latter, top IT talent is likely to choose a well-known IT behemoth over them.

Over the past several years, tech behemoths have made investments in both online and physical branding initiatives to drastically improve the perception of their businesses. By being more open about their goals, they have been able to attract and keep quality talent with them.

To stand out from the crowd, CTOs must take proactive steps with their talent team to support a thriving workplace culture, maintain the fun, offer competitive pay and benefits, and make sure their brand and strengths are effectively communicated through social media and other digital channels.


Entrepreneurial mindset of employees

Having a strong talent pipeline is crucial for start-ups that are expanding, especially when CTOs are constantly under pressure to scale and launch new product lines. You need flexible and agile people to experiment and develop solutions. The abilities required of tech professionals are changing as a result of rapid technological advancements in areas like cloud computing, application development, and data analytics.

Young IT talent is drawn to start-ups and unicorns for a variety of reasons, one of which is the challenge of creating something new and innovative that will also be financially rewarding for them. As compared to traditional IT companies or enterprises, the IT talent that works at start-ups expects more autonomy and influence at work, plays a role even outside of their domain and does the deployments on their own.

The CTOs of start-ups need to ensure that they have good reasons for keeping such a strong pool of talent on board. Don't limit tech talent to their particular specialities, and allow them the chance to explore and work in a variety of tech fields including DevOps, customer experience, cloud, automation, cybersecurity and platform. The IT talent at start-ups, in contrast to tech behemoths and traditional businesses, wants to be challenged more and generally has an entrepreneurial mindset. It is well known that the majority of top IT talent chooses start-ups or unicorns for their first job because they have an entrepreneurial mindset and eventually wish to develop their own original ideas into a profitable business model.

Growing businesses like Healthkart, and Curefit have been successful in cultivating a mini-enterprise culture within their tech ecosystems, pushing their tech team members to try out new concepts, and funding concepts that are distinctive and have the potential to be scaled up. The CTOs must make sure that there is enough room for such enthusiastic people to be creative, innovative, and entrepreneurial.

In addition, it is also critical to ensure that the workplace not only meets the standards for a good and challenging work environment, but also fosters effective communication and collaboration so that staff members can express their career preferences and take up new roles and responsibilities.

Losing focus on leadership transparency and accountability

Tech talent seeks an environment where they can openly and fearlessly communicate their ideas, questions, and concerns. Although the majority of start-ups and CTOs promote this behaviour, there may have been obvious gaps when start-up CTOs themselves dealt with unparalleled ambiguity.

High-performing tech talent at start-ups and unicorns wishes flexibility, accountability, freedom to do work without micro management and expect their seniors to be transparent and listen to their grievances without being judgemental. Start-up CTOs must make sure that developers are treated more like creators than like coders. They must make sure that they participate in the business as active members.

Many start-ups frequently lose focus on these crucial personnel requirements when they are under intense pressure to achieve results or when they are looking for the next round of funding, creating an environment at work that is both unclear and uncertain. Top-performing tech employees would prefer to explore other options if they feet that their leadership was unaccountable or that the impact of their work had not been acknowledged.

Pristyn Care, a healthtech start-up that was founded in 2018, has been heavily focusing on these factors and claims to have had great success in keeping the majority of its key technological personnel. By allowing people to experiment without fear of failure and by not being critical even when they fail, the company claims to have greatly strengthened the confidence of its IT team, and that keeps them motivating.

In addition, the IT talent at start-ups expects the company to have finances to support experimentation, give access to the newest technology, and give them more exposure to work beyond the Indian market in addition to regular training and competitive salary and perks.

Changing priorities of talent pool

Another big element that perplexes CTOs and unicorns is a dramatic shift in employee needs, particularly in the post-pandemic context. For tech professionals, work-life balance and the freedom to work from any location have emerged as major priorities. Start-ups and unicorns need to step-up their game because top IT businesses and enterprises offer incredible wellness perks, flexible working hours and healthcare packages, as well as a substantial number of paternity and maternity holidays.

To promote themselves as an employer of choice, many unicorns have been providing their employees with ESOPs, advance salary policies, training initiatives, and a wide range of benefits.

However, CTOs of young and start-up companies face a difficulty here because they frequently lack resources and require a lot of support from their tech personnel to become competitive and stand out from the competition.

During our conversation, a top CTO of a leading start-up revealed that while his company has been doing reasonably well in terms of talent management, many of its technical staff are still leaving the company because the policy of work from anywhere has been abandoned and given the company's aggressive growth plans, all tech staff has been asked to come to the office regularly for brainstorming and developing new ideas.

Bad hiring

It's not enough to just find talented people; they also need to fit in perfectly with the culture and vision of the company. Even if some people have exceptional professional skills, mindset and cultural barriers prevent them from excelling in a particular company environment.

According to a McKinsey report, titled, Tech talent tectonics: Ten new realities for finding, keeping, and developing talent, finding great talent doesn’t help if the talent doesn’t want to work for you, and hiring great talent doesn’t matter if the talent leaves quickly. Companies have to invest simultaneously across the entire “hire to retire” life cycle.

For instance, hiring experienced tech people from a process intensive organization may not be a great idea for a start-up who is just into its preliminary or growth phase. The reason being they may not fully blend with the environment that demands rapid innovation and quick turnarounds. However, once the start-up reaches a more advanced level and implements good processes, the same tech specialists may be very valuable to the business.

In contrast to the issue faced by CIOs and established businesses in hiring and managing talent, start-up CTOs also need to ensure that the software professionals, coding specialists, and developers they hire have the ability to multitask, are highly self-motivated, self-managing and work autonomously as needed. Hiring the unfitting IT talent and then firing them after a short period of time frequently can be a negative influence on both the company's reputation and overall growth plans.

While some IT specialists enjoy multitasking when necessary, during a company's growth phase, others might not feel as at ease and prefer to work in an environment where their roles are more clearly defined and their career advancement path is structured. In such a scenario, spotting right tech talent who can relate to the company's mission and have a focused approach becomes crucial for a CTO. 

In addition to the aforementioned elements, CTOs must pay close attention to those that are crucial to attracting and keeping top personnel, including diversity and inclusivity, timely performance reviews, efficient feedback channels, and empathy in the workplace.

Start-ups occasionally lack the requisite talent acquisition and retention skillsets to attract and manage their employees, despite the fact that many of them place a high emphasis on market-defining goods and services. Ineffective work-life balance and competitive talent snatching could also be significant hindrances to effective talent management in any firm.

Without a doubt, the industry and CTOs will continue to be under pressure due to the technology's quick developments in terms of talent management. CTOs who are focused in their approach and prepared to develop a systematic process and action plan based on their present and future talent requirements, however, will outperform their competitors in the talent wars.

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