State of SaaS
Talent Acquisition
2023
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State of SaaS
Talent Acquisition
2023 in Finland
Samuli Salonen
CEO & Founder
TalentBee.io
As we all know, the SaaS market has undergone significant changes in the last few years, from all-time high valuations & growth numbers to recession. Many companies grew their headcounts like crazy, and suddenly, the years 2022 & 2023 brought in layoffs.
When you have grown your headcount, you have a high burn rate, and you cannot raise more capital, so you need to move from growth to profitability.
The changes in the market mean hiring freezes, laying people off, and significantly impacting talent acquisition.
Our goal was to understand what’s happening in Talent Acquisition in these challenging times and interview SaaS companies around these topics.
Are companies still hiring? Are they still using agencies? Are they still investing in employer branding or working with agencies? What are the biggest struggles that companies are facing? Is hiring getting easier or harder?
That’s what we wanted to understand and share with you.
We interviewed founders, people leaders & recruiters from SaaS companies. For example:
Jenny Fast
Tech Talent Acquisition Lead
Smartly.io
Heini Matero
Talent Acquisition Manager
RELEX Solutions
Henrika Lyytikäinen
Talent Acquisition Lead
GTM Supermetrics
Jussi Hurskainen
CEO
Valamis
Seija Suoniemi
Talent Acquisition Lead
M-Files
Tytti Miskala
Senior TA Partner
Basware
Aki Kujala
CFO & Co-Founder
Linear
Jussi Karttila
CEO & Co-Founder
Zefort
Suvi Lindfors
Co-Founder
Lumoa
Suvi Leinonen
COO, Partner
Sniffie Software
Elisa Hyvönen
Talent Acquisition Lead
Howspace
Pekka Huttunen
CEO
Eventilla
Company Data
Current ARR
Current ARR
We wanted to get a broad perspective on what’s going on in different sizes of SaaS companies. We had companies from pre-revenue to +100m€ in ARR.
We could see that many big companies mainly focus on back-fill hires, and companies from 500k to 5m€ ARR were hiring way more for new roles.
Samuli Salonen
CEO & Founder
TalentBee.io
Funding rounds
As we know, the funding market has significantly shifted in the last 12 months. Valuations are down, and fewer deals are going through.
Most of the companies we interviewed had collected some capital, and +50% of the companies we interviewed were between Seed-round and D-round.
Samuli Salonen
CEO & Founder
TalentBee.io
Funding rounds
Talent Acquisition Data
Headcount growth in the past 12 months
Headcount growth in the past 12 months
Most companies had experienced headcount growth in the past 12 months, but many people shared that likely the number will be close to 0% or negative in the upcoming years.
20% of the companies we interviewed had grown more than 50% in the past 12 months - The majority of these companies were companies with less than 100 employees.
The bigger companies didn’t see a high headcount for the past or following 12 months.
Samuli Salonen
CEO & Founder
TalentBee.io
Employee Churn from 2022
“2022 I lost a bet to our CFO regarding our employee churn. We were able to get it down from 16% to 11%. It was even better than I could have expected.
This increased retention helped our growth significantly because we were able to do actual growth recruiting when there was less replacement recruiting to do. The current macro-economical trend can also be benefiting us, as it makes some people reconsider their plans to change employer: it’s always some kind of a risk to change one’s job or one’s employer.”
Ilse Manner
VP Human Resources
Nomentia
Employee Churn from 2022
Recruitment teams
Recruitment teams
Most companies are working with relatively small recruitment teams, and we could already see some companies making layoffs in their recruitment teams.
Around a third of the companies were working without a recruitment team, and the hiring managers were responsible for the recruitment process and looking for candidates.
Having no recruiters created many challenges for many companies, especially in more challenging roles when you need to do outreach for candidates and the “traditional” post and pray method doesn’t work.
Samuli Salonen
CEO & Founder
TalentBee.io
Do you have a full-time Employer Branding person?
“Despite the uncertain market conditions, our growth goals are still in play.
However, I'd see that one of the obstacles lies in our limited recognition within the talent markets, therefore, I am dedicating my efforts to strengthening our employer brand locally.”
Tytti Miskala
Senior TA Partner
Basware
Do you have a full-time Employer Branding person?
Have you worked with recruitment agencies in the past 12 months?
Have you worked with recruitment agencies in the past 12 months?
“We have been able to recruit people mainly with our team. We decided to use outside help for DevOps recruitment last year. Developer searches are always slow, but we always find someone for the role.”
Aki Kujala
CFO & Co-Founder
Linear
What kind of things you do with recruitment agencies?
It's confusing for me that most companies still do recruitment in an ad-hoc way and use agencies mainly for one-off projects.
When I worked as an in-house Talent Acquisition Lead, I noticed a few problems with that:
1. It takes time to learn the company's culture and actual needs.
2. You are typically always late with the recruitments and therefore the current team is often over-working.
More and more companies should take their talent acquisition to an ongoing & strategic level to eliminate these problems.
Saara Kyllönen
Co-Founder
TalentBee.io
What kind of things you do with recruitment agency?
10 biggest challenges that SaaS companies face in Talent Acquisition
10 most common challenges
Number 1:
Finding senior tech talent is still hard.
Number 2:
Changing business environment → Hard to make strategic and predictable Talent Acquisition.
Number 3:
Going global brings in much challenge, especially on GTM teams.
Number 4:
How to compete with things other than salary?
Number 5:
Potential talents don’t know our company.
Number 6:
How to find high-performing salespeople?
Number 7:
Recruitment volumes are down - What happens to our team?
Number 8:
Our founders don’t understand the value of Employer Branding.
Number 9:
How to balance MRR growth & hiring people?
Number 10:
Low offer acceptance rate = The best candidates have multiple offers on the table.
1.Finding senior tech talent is still hard
Almost everyone we interviewed shared that finding senior tech talent is still hard, even though most other roles are now easier to find than they used to be.
We also identified one trend around this. A lot of SaaS companies were using outside partners for development services, but many companies were in the process of bringing the development in-house.
Most shared that they mainly focus on hiring senior tech talent and cannot bring in junior developers, causing some market challenges.
Susanna Ketola
Talent Acquisition Specialist
Leanware
Henrika Lyytikäinen
Talent Acquisition Lead
GTM Supermetrics
2.Changing business environment → Hard to make strategic and predictable Talent Acquisition
Many companies work in a changing business environment, making planning talent acquisition difficult.
For many companies, this means moving towards more ad-hoc recruitment because you don’t know what kind of people you need to hire in the upcoming months.
Recruitment volumes going down has also brought some time to develop internal processes, and many companies are focusing on building their strategies, hiring manager maturity, data & analytics. Doing projects they didn’t have time to do when hiring volumes were super high.
3.Going global brings in much challenge, especially on GTM teams
Most companies we interviewed wanted to build a global success story, which means hiring people from multiple countries.
Nordics, DACH, UK & North America were the most common, and everyone needed help hiring go-to-market teams when entering new markets.
It takes a lot of time & money to make a successful entry, and even though companies know this, it still comes as a surprise how hard it can be.
Jussi Hurskainen
CEO
Valamis
Jussi Karttila
CEO & Co-Founder
Zefort
4.How to compete with things other than salary?
Inflation is raising living expenses & many companies are pressured to increase their salaries. Most companies are trying to do this, but at the same time, thinking about what else they can offer for employees.
What kind of culture do they have? How to position themselves against the competition? What kind of growth opportunities can they offer?
5.Potential talents don’t know our company
Employer brand is getting more & more critical when candidates choose a place to work.
Still, only 15% of the companies we interviewed had a person focusing on building an employer brand, and this creates many problems:
1) Companies need to get high-quality applications from their target audience.
2) It's hard to attract candidates when doing outreach to potential candidates.
The key here is that no one knows your company, and you are competing against big & well-known companies.
Tiiu Pyykönen
HR & Operations Lead
Granite Partners Ltd
Suvi Lindfors
Co-Founder
Lumoa
6.How to find high-performing salespeople?
The current market situation is affecting the growth of the companies a lot. MRR is not growing, customers are leaving, and you cannot get new customers.
Getting new customers is, of course, a combination of excellent product, marketing & sales.
Many companies needed help finding great salespeople & expect to see rainmakers & unicorns. Ramp-up times are long to get a new Account Executive profitable for the business.
Most of the good salespeople are staying in their current workplace, making money & it’s a significant risk to change jobs.
7.Recruitment volumes are down - What happens to our team?
Some companies had already made layoffs in their recruitment teams & some teams had much pressure to do so. This was a thing that especially recruiters & people leaders were worried about.
We heard a few founders share: “We don’t need recruiters because we don’t do recruitments this year.” At the same time, many companies saw this as an excellent opportunity to develop their processes, recruitment function, hiring manager maturity, data, tech & analytics.
We predict that these companies will thrive when it’s time to hire again - The companies laying off their whole recruitment teams will be under significant challenges and will be giving many market shares to others at that stage.
Heini Matero
Talent Acquisition Manager
RELEX Solutions
Toni Martikainen
Head Of Growth Marketing
Builderhead
8.Our founders don’t understand the value of employer branding
We often heard this from talent & people leaders: “Our founders don’t understand the value of employer branding.”
We think that there are probably two sides:
1) Some founders don’t understand the value of the employer brand
2) Some people leaders don’t understand the priorities of the business. In this kind of market situation, EB most likely isn’t the number one priority when you need to worry about high churn numbers or not getting new customers.
However, more and more founders are starting to understand the value of employer branding, and companies will begin to invest there to make hiring easier.
9.How to balance MRR growth & hiring people?
Companies wanted to hire more people but couldn't because the MRR wasn't growing fast enough.
Here you can see some ARR benchmarks per person (source SaaS capital). When ARR goes higher → ARR per person increases.
Kimmo Kuokkanen
CEO & Co-Founder
Statzon
Suvi Leinonen
COO, Partner
Sniffie Software
10.Low offer acceptance rate = The best candidates have multiple offers on the table
The best candidates can still choose where they want to work, whether a salesperson, tech talent, CFO, COO, marketing talent, CS, or something else.
We heard multiple stories of long recruitment processes where companies used tens of hours to draft perfect job ads, do much sourcing, run tens of interviews, and only ended up offering the role to someone who then declined the offer.
The biggest challenge isn’t even the fact that you just wasted 50 to 100 hours, but the impact on your business and your team when it will take 2-4 more months until you have someone on board. It’s quite a long time to go, e.g., with the tech team missing a person everyone else needs to cover.
More insights from the participants
TalentBee’s 3 recommendations
for going forward
🚀 Recommendation 1:
Focus on building your employer brand & identify your position in the talent market.
- Only 15% of the SaaS companies are focusing on this right now. There’s a massive potential for employer branding.
- Identify your positioning in the talent market: What you can offer as an employer, what your competitors are offering & what the talents want (See next slide around a framework)
- If you need to sell the idea to the board / management team, focus on the business benefits of employer branding - Not just the fact that you want to build a brand (See some data on the following slides)
- Listen to episode of #TalentBuzz where Fiksuruoka shares their Employer Branding story & the learnings from there.
Differentiate, don’t blend in.
Find your differentiation between what you can offer & the talents expect.
Benefits of investing in employer branding
According to outside research, you can expect multiple different benefits from investing in employer branding.
28% better retention with a strong employer brand
50% cost-per-hire reduction
50% more qualified candidates
1–2 X faster hiring
🚀 Recommendation 2:
Don’t separate talent acquisition & the people function → focus on the whole funnel.
- Many SaaS companies have quite a big cap between talent acquisition & rest of the people function.
- As a simple example: Most companies don’t know how, e.g., the source of the candidate affects on retention or success of the person in the role.
- In most organizations, recruiters are not aligned with the business. Most recruiters didn’t know, e.g., the MRR of the company → Time to align these even more.
- Start from the business goals → change it into a people funnel: from awareness to referral. (See an example of the pirate funnel on the next slide)
Pirate metrics in Talent Acquisition
Framework to measure success & identify growth bottlenecks effectively. Read more about Pirate Metrics.
🚀 Recommendation 3:
From ad-hoc recruitment to building talent pipelines
- Most companies struggle with strategic talent acquisition because business and hiring goals are changing all the time → You can’t do hiring plans.
- Switch your mindset → What roles do we need in the upcoming years?
- Don’t focus on when you need those people; start building relationships with them.
How to build Talent Pipelines?
Want to learn more about the topics?
Listen to #TalentBuzz podcast
We interview founders & people leaders from SaaS companies like Slack, HubSpot, PandaDoc, Visma, Uber, Oneflow, Mentimeter, Blinkist, ProwitWell and M-Files. They share their learnings around talent acquisition.
Listen hereLet’s have a chat
Do you want to have a chat & get some inspiration & ideas to your talent acquisition?We have a lot of ideas on scaling your Tech & GTM teams with combination of employer branding, talent pipelines & recruiting. 🙌
Book a call from here🐝
Here’s how TalentBee supports SaaS companies:
Urgent hiring needs
We help you to fill you current hiring needs & start the recruitments on week 1 of the collaboration.
Strategic Talent Acquisition
Building a talent acquisition strategy, processes, automations, tech, data, analytics & hiring manager maturity.
Talent Pipelines
Build your own talent pipelines for roles you hire a lot e.g. developers / GTM team members. Use TalentBee’s talent pipelines for roles that you hire seldom (like Head of Sales, CFO, CRO etc)
Employer Branding
Build a strong employer brand to make hiring more efficient, hire better quality employees & get employees that will stay with your company for a long-time.
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This research was brought to you by TalentBee!
Talent Acquisition agency for SaaS & Tech companies 🐝 Here are some of the customers we work with:
1) The market is way easier.
2) We are getting bigger. Amount of inbound applications is growing rapidly right now.”
Antti-Pekka Vepsäläinen
CEO & Founder
Linkity
Elisa Hyvönen
Talent Acquisition Lead
Howspace
Joni Pärssinen
HR Manager
OpusCapita
Ville Viljanmaa
CEO
Flashnode
Pekka Huttunen
CEO
Eventilla
Seija Suoniemi
Talent Acquisition Lead
M-Files
Niklas Nordling
CEO
Formulator
Niklas Löfgren
Country Director, Finland
Epassi
Vera Andreeva
Operations & HR Manager
ReOrbit
Heidi Kolehmainen
Head of People & Culture
Secapp
Joel Mansnerus
CEO & Co-Founder
Fixably
Adraina Guerrero
Talent Acquisition Specialist
Trustmary
Tuukka Seeslahti
Co-Founder & COO
FabricAI
Marina Lange
People & Culture Lead
Workfellow
Laura Evilä
People & Culture Specialist
Lyyti
Jenny Fast
Tech Talent Acquisition Lead
Smartly.io
Simo Salmensuu
CEO
Miradore