Today’s markets have prompted most companies to introduce cash conservation and revenue acceleration strategies in an effort to extend runway. For many, the key to these cash conservation and revenue acceleration strategies lie in compensation.
OpenComp is interviewing executives from tech companies to understand how they’re responding to the economic climate, including their top tips for conserving cash and extending revenue.
What follows is an interview with Chris Starr, senior recruiter for engineering leadership at Airbnb. He began his career in the Marines and then pivoted into recruiting for the DOD, the CIA and the NSA, and eventually transitioned to working as an early employee at various tech companies, including Anki, Oculus and Lyft.
You can hear the full discussion on our webinar, “Hiring Engineers in a Recession - Headcount Planning Like a Pro.” This conversation covers topics including:
- How to unlock top barriers to hiring tech talent
- Why engineers accept and decline offers today
- How to adjust your headcount plan for a shifting economy
The following has been edited for clarity and concision.
What are you seeing in the market today?
We’ve seen an increase in candidates at Airbnb, where we recently announced the work anywhere, live anywhere policy. I think there are a couple drivers behind what we’re seeing: the layoffs and the landscape of current companies. We're continuing to hire across all our engineering teams. I focus on engineering leadership, and while we currently have around a dozen open leadership roles, I’m seeing that the talent demand pool has increased in comparison to the actual open roles themselves.
“The talent demand pool has increased in comparison to the actual open roles themselves.”
How have you seen the state of the economy affect headcount planning?
I was actually part of a second layoff that Lyft had at the end of 2020. About 40 of us on the people team were impacted. As they were working on a path of profitability, they had to make some tough decisions. But the blessing in disguise was that Airbnb was forecasting a travel rebound in 2021, so they were in the process of rebuilding the recruiting machine ahead of what they hoped to be a phenomenal year - which they had. They took a very mindful approach to their roadmap, existing resources, and the “whys” behind the need for additional resources.
Having worked in various startups, then larger scale companies, it’s easy to think “oh we’re going to double, triple in size.” I'm not an engineer, but working in this space for 20 plus years, I try to think like an engineer. So I think, what are we solving for? Why are we doubling or tripling? So again, it’s important to be thoughtful and mindful as to why you're hiring.
A recent survey from OpenComp shows that engineering candidates value equity more than cash. How does Airbnb use cash and equity to attract engineers?
I do agree, and find most candidates believe equity matters more than cash. But it’s necessary to understand the candidates' drivers and motivations, to know what’s more important to them. Is it cash? Is it equity? Is it a balance between the two? Our CFO has conversations with candidates to map out the percentage of ownership and dilution. Having our CFO in conversations about equity and compensation helps us close a lot of candidates.
The offers I made when our stock price was consistent at $160 to $170 are different than today’s offers, given that our stock price is consistent at $100 due to the current market. There’s an amount of upside I'm trying to sell when we're talking about equity. But in reality, if the market changes in two years and we go back to where we had been, this package is going to look different. I can’t predict the future, but it really helps to show where we are currently in the market and where the market could be in the future.
“Our CFO has conversations with candidates to map out the percentage of ownership and dilution. Having our CFO in conversations about equity and compensation helps us close a lot of candidates.”
OpenComp’s database shows that machine learning engineers are actually the hardest to recruit. Is this surprising to you?
The data is very telling. I was helping with some key individual contributor hires, and the competition for senior software engineering talent was intense. I had one candidate in the offer phase who had nine competing offers. Airbnb has a very rigorous hiring process, so it was just dumbfounding that we ended up not closing that person. Compensation was one of the primary factors, which made it clear that the motivators differ significantly between folks later versus earlier in their careers.
What are the differences in motivation between a senior or an individual contributor level?
I find that folks at a senior level in leadership align more with company cultures, mission, and opportunity to grow, as well as the problems that they can help solve. I find that individual contributors are more driven by competing offers and trying to push each offer up. A senior candidate is often very thoughtful about what's next, where they can align themselves for years to come, and not necessarily limit themselves to a two to three year outlook. Most IC talent are thinking two years out, and they'll hop somewhere else after that.
“I find that folks at a senior level in leadership align more with company cultures, mission, and opportunity to grow, as well as the problems that they can help solve.”
For many businesses their headcount plan is effectively their financial plan. How do you go about making data-driven headcount decisions that you can trust to protect the future of your company?
The importance of having current, relevant data cannot be overstated. When working for startups as a recruiter on the front line, our data felt very stale. I would get competitive offer data, and it was very interesting to learn what was current and relevant. And, when we looked at the data that our HR comp tool was pulling, it put us in challenging, precarious situations for closing offers.
Another important process is partnering with recruiters to gather that competitive data. Something I’ve seen while working at larger companies, is just how much data is collected and how collaborative recruiters are with their comp team peers. As a recruiter, I always knew what the ranges for my open roles were, and what to expect. I think when you're in the startup mode, there's less focus on that. But measuring how you close against your competitors is really key.
To hear more from Chris about tech talent headcount planning during times of economic uncertainty, be sure to watch our on-demand webinar: Hiring Engineers in a Recession - Headcount Planning Like a Pro.
Zoë Rose is a Content Marketing Manager at OpenComp and has held roles at Fuel Cycle, CorePower Yoga, and TrueCar. She pens the monthly High Growth Matters Spotlights. Connect with her on LinkedIn here.