While the funding environment for Climate continues to fluctuate, we are starting to see some early signs of a recovery from last year. Investments for 2023 were down from previous heights, but we did see almost $20B in venture capital enter the market in Q3, which was as much as Q1 and Q3 combined. Heading into this year, CTVC by Sightline Climate cites $41B in investable capital in Climate as of Q1 2024 with private equity, growth equity and infrastructure funds entering the fray beyond the usual venture folks. This acceleration in capital deployment is certainly positive, but we believe that capital and technology alone can’t solve the world’s climate crisis. Our collective success requires an ecosystem of talented and mission-driven people to drive a sea change in the most challenging sectors to decarbonize. This influx of dry powder is sure to put additional pressure on the talent market as competition for world class talent will continue to increase significantly. Climate-focused companies are already struggling to effectively and efficiently bring top talent in the door, which sounds strange given the number of qualified candidates in the job market.
What I’ve heard from founders and executive teams at early-stage start-ups is that with the proliferation of job board aggregation tools and AI assisted application tools, they are inundated with resumes that are mostly unqualified. The sheer volume of candidates is paralyzing them and often the handful of great candidates that do make it into the pipeline, are left sitting for weeks and even months, or missed completely. Simultaneously they are bombarded by contingency recruiters with unsolicited resumes or hustling active candidates that they are showing to dozens of companies simultaneously. This often leads many to turn back to their limited personal, professional, or investor networks to try to hire candidates that are referred or familiar. Unfortunately, this strategy is not scalable beyond a handful of early hires. There is a huge need for “facilitation” to cut through all of the “aggregation” and help these companies focus on strategic recruitment practices that will set them up for long-term success.
The Missing Link: Connective Tissue in Recruitment:
Great recruiters should be that connective tissue that helps bring together your wish list and budget with the realities of the industry market dynamics and timing. Their goal should be to help get the right people in the right roles so you can establish a team that will not just fill those roles, but breakthrough roadblocks to help you meet your next milestone and keep you on the right path to raise additional capital. I like to call it the “missing link”. Going beyond just a transaction, the recruiter should be attuned to your industry and market dynamics, seek to understand the problem you are trying to solve by filling the role, and have a good grasp on the candidate pool to go after. This will solve the analysis paralysis that is stopping many companies from making any hiring decisions at all.
The Dilemma: How to Hire the Right Recruiter or Talent Partner
With over 260,000 recruiters across the United States, it’s no wonder that figuring out the right path forward is daunting and pretty confusing. There are only a handful of business models for recruiters and choosing the right one is critical. The two most common are contingency and retained. It’s tempting to respond to recruiters who are pitching great candidates via email with seemingly “no strings attached’, but buyer beware. A couple of statistics that are important to understand. The contingency recruiting model was NOT built for early-stage company’s needs. Contingency firms only fill about 30% of the roles they commit to work on. On the other end of the spectrum are fully-retained firms which act more like consultants and have been traditionally reserved for executive level positions or large companies. The key for early-stage companies is to find a partner who can marry the best of both models – hustle combined with deep expertise. Hiring the right talent partner for you should be based on two things – the recruiters understanding of your hiring goals at the outset of any search efforts and aligning recruitment strategies to the stage of your company. Looking beyond role titles, years of experience, and compensation, a recruiter needs to be an extension of your team, helping guide you on this journey to ensure the best outcome.
Solving the Puzzle: Top Four Questions to Ask a Recruiter to Uncover Need & Fit:
If your recruiter isn’t interviewing you as much as you are interviewing them, they may have a strictly transactional mindset, or they may be inexperienced. Great recruiters should be asking hard questions about the company, the existing team, the role, the roadblocks, the sector dynamics. Similarly, you should come prepared with your questions to ensure the best fit with your needs. Consider these questions to help guide you down the patch:
- How long have you been recruiting in this sector or industry?
- In a very competitive market, how do you cut through the noise and get candidates to respond?
- Do you have the industry context to hold court with premier candidates?
- Does your company have deep early-stage company recruiting experience?
- Do you have the ability to hire across all my business units from Board to bench?
- What does the support system look like behind you?
- What is your business model?
- Do you provide the flexibility across supported, engaged, or full search capabilities?
- Beyond just search, are you able to provide market intelligence and advisory services to ensure our success?
- Do you have tools to help me understand how in demand the talent I am seeking is (in the next 30, 90, 180 days)?
There are many more questions you might want to ask, but you need to ensure that before engaging an external recruiter, you’ve found a true recruiting partner that is willing to take the time to listen, learn, educate, and grow with you.
Data-Aggregation: A Game-Changer in Recruitment
One area that I’ve been specifically investing in over my 15+ years in the talent acquisition business is around data. Data aggregation is a game changer in recruitment, enabling recruiting firms to gather and analyze candidate data to help their partners make data-driven hiring decisions. Understanding the flow of talent from various industries, geographic location, compensation expectations, etc. gives companies a huge leg up in identifying and attracting the right candidates. For example, did you know that:
- Posted roles across climate companies ranging from Seed to Series C increased 23% from January to February. From February to March, posted roles increased by 77%.
- The most sought after talent across early-stage companies have Engineering, Operations, and Product backgrounds.
- In Q1 2024, Series A companies posted the most job openings, pointing to new funding received in 2023 and a concerted effort to build out their teams heading into the year.
With the right data, tools, and industry expertise at your side unleashing market insights, your company can unlock its full potential and build high-performing teams that drive business growth.
An Integrated Approach: Partnering for Success
By taking a holistic approach, hiring in this climate (no pun intended) doesn’t have to be hard or exhausting. Strategic recruitment practices and collaboration with the right talent partner can help you and are essential elements in achieving hiring success.At Sea Change Advisors, we leverage deep Climate domain expertise to attract top talent and create skilled, passionate, mission driven teams. Our experience lies in talent acquisition, candidate engagement, navigating stakeholder relationships, and utilizing data-driven market insights to help companies make the best hiring decisions. We optimize the hiring process, helping organizations make more cost-effective decisions from Board to bench. For more insights on how to hire a talent acquisition partner or to learn more about what we do at Sea Change, feel free to contact us here.
