The proliferation of start-ups across many sectors has intensified the battle for talent in recent years. With increased capital investment, food start-ups are increasingly popular as they have become key drivers for innovation and technology. These start-ups offer fresh ways to meet high demand for nutritional ingredients, product transparency and more sustainable lifestyles. Inspired by ethical and humanitarian visions, food start-ups look attractive to individuals keen to make an impact and embrace a mission they are passionate about. But when it comes to attracting and hiring talent, they are faced with several challenges, as HC Insider explores in this article.
Challenges For Start-Ups
Innovation in the food industry was long the prerogative of global food manufacturers, but the landscape has changed significantly over the past decade. Smaller companies now bring change and disruption in mature markets, especially in the United States, where the regulatory environment is considered more favorable to launching new products. Such companies include innovative and sustainable protein businesses looking to tackle the carbon impact of the global livestock and aquaculture industry. For instance, San Francisco-based Upside Foods produces lab-grown meat directly from animal cells. In another example, California-based Air Protein has developed Air Meat, a meat alternative which is made using microbes that transform recycled carbon dioxide into protein.
This trend is expected to catch up in Europe and other developed markets. Speaking in a recent podcast, Nick Fereday, Senior Analyst Consumer Foods at RaboResearch, said: “What you’re seeing now is [that] it’s the small emerging brands that are really driving innovation, either through renovating a tired category or identifying gaps in the market and coming up with products that really talk to today’s consumer.”
However, attracting the right type of talent is proving challenging primarily due to the specific criteria for start-up staff. This is primarily due to the logistics and size of these companies who typically employ no more than 50-100 employees. Fundamentally, new businesses and start-ups operate with low capital and are under pressure to manage both their human and financial resources carefully before they can achieve economies of scale, drive sufficient revenue and consolidate their position in the market.
As a result, start-ups require motivated, resilient talent who can adapt to change and adversity in a much less structured work environment than in larger companies. Employees need to be comfortable with the unknown and use their resourcefulness to create solutions. Start-ups seek candidates with an entrepreneurial spirit and the ability to drive growth. But these candidates must also be willing to go beyond their job description and have strong expertise in their field, for instance in food service sales, new product development, or in specific areas like fungal technology and other scientific and technological solutions.
Those in leadership roles are often required to operate both as an individual contributor as well as a strategic leader. Due to smaller budgets and/or teams, they are rarely able to delegate tasks to other colleagues. For instance, Chief Commercial Officers may find themselves not only responsible for shaping and implementing commercial strategies, but also creating spreadsheets and business development.
Commercial leaders are in high demand by food start-ups as companies strive to differentiate their product and gain brand awareness. Start-ups require talent who are passionate about the business and its products, but who can also accelerate growth and revenue. This often leads them to turn to seasoned food industry veterans who can utilize their network and share their knowledge internally with more junior talent.
One challenge is that this more experienced talent pool is comprised largely of candidates coming from established organizations who may not be as flexible to the work environment of start-ups. Instead, approaching entry- or mid-level talent who might be more open to pivoting to other companies can be a suitable alternative. However, this comes with the caveat that less experienced individuals may have limited customer networks to leverage in commercial strategies.
Promoting a Flexible Culture
The lack of brand awareness and the risk associated with start-ups can be a deterrent for candidates. Some market segments and technologies are so niche that candidates are often not familiar with even the company’s name. Employers need to position and pitch their business in more proactive ways than established companies. In this context, social media represents a highly valuable tool for employers to capture the attention of passive candidates in addition to active job seekers.
Prospective candidates remain responsive to companies approaching them on a more personal level to promote an approachable and close-knit work culture. Smaller companies are better positioned to showcase positive stories by promoting successful case studies and team values. This can be a major draw to talent looking for more meaningful career moves. Importantly, it is in stark contrast to larger corporations’ inherent lack of visibility to the public’s eye due to their size.
The more open and transparent culture of start-ups also serves as a positive argument to retain current employees. While there is no way to completely mitigate the risks faced by a start-up, companies can offer greater transparency to candidates by sharing information about their investments, series funding timelines or historic growth. Candidates are more likely to be drawn to companies that offer growth opportunities both for themselves and for the business, thus allowing them to take on significant responsibilities.
How to Hire Talent
Undeniably, there is a need to bridge the gap between the level of compensations start-ups can offer compared to larger entities, especially for emerging businesses who are entering the market and are keen to preserve cash flows. Against a scarce talent pool, specific expectations to find top talent with adequate experience and the right cultural and personality fit means employers need to differentiate their offers. Notably, many employers are leveraging equity-based compensation in addition to smaller salaries. This option is becoming increasingly popular as it benefits both employers and new hires. Start-ups are able to gain the loyalty and commitment of employees to the growth of the business, knowing that they will in turn benefit from the equity stake they hold in the company’s success. It is also seen as a way to reassure employees regarding the risks associated with new start-ups and allows them to feel valued and empowered.
But the recruitment process can often be intense and lengthy. For start-ups, there is much more at stake because the implications of a failed hire can be significant compared to a larger organization. Every new employee, especially in the early days of building a company or business, has a strategic role and the potential to change the company’s culture.
Therefore, it is key to outline a structured recruitment and interview process that ensures successful hires. Involving multiple interviewers who can provide different perspectives can improve the interview process and talent assessment. Alternatively, candidates can be asked to perform a task or test related to the role. This could help candidates become more engaged with the role and company. However, the challenge with this approach is that some candidates may lose interest in the role if too much is expected of them at initial stages. Tasks that can be completed within 2-3 hours are considered a reasonable request. Relevant work samples from the candidate’s past experiences are another way to gauge their experience and credentials.
To conclude, finding the right talent for food start-ups can prove as complex and challenging as it is rewarding. Demand is especially high for commercial talent to build strategies, thought leaders to lead innovation and passionate marketers to promote the company’s brand. With food start-ups all searching for the same type of talent, competition to attract and hire the strongest candidate is fierce. The mixture of adaptability, passion and willingness to work across multiple functions in addition to an expertise in their field can be a difficult combination to find. In order to alleviate the risks inherent to start-ups, recruiters are having to devise more innovative methods to approach individuals, develop their network in the food market and offer competitive packages and opportunities to talent with niche skillsets. - HF/FS