3 ways big firms can compete with startups for top tech talent

CIOs looking to hire good talent risk being caught in a pincer as fast rising demand runs up against falling supply. Ever more companies and functions need staff with strong tech skills, while the number of STEM graduates in developed countries is in decline. Yet perhaps the most difficult part of the challenge is competition with startups. Startups offer much of what IT employees prioritize when considering an employer – compensation, future career opportunities and ongoing development, according to data from CEB, now part of Gartner (Disclosure: I am employed by CEB, now Gartner).

In addition to a competitive salary, many startups attract top talent by offering the opportunity to own a stake in the company. They give employees the opportunity to move ideas quickly from conception to commercialization and to move careers forward at a similar pace, instead of waiting several years. While most big companies talk a good game about innovation and creativity, in reality caution usually comes first. In contrast, creative and independent work is the lifeblood of many startups.

Recognizing that they are falling behind, leading CIOs are reworking their employment offers to match the attractions of startups without giving up the benefits of scale, experience and brand recognition that come with being a large enterprise. Taking a page from the startup playbook, these CIOs are adopting three strategies to attract and retain top talent:

1. Embrace risk and failure: Startups have everything to win and little to lose, so risk-taking comes naturally. At large enterprises the situation is reversed. Even if an innovative idea is wildly successful it’s unlikely to outstrip existing business, while a failure can seriously damage the company’s reputation. This creates a risk-averse culture where IT employees hesitate to take on challenging projects. As the demand for tech talent increases at all companies, employees who feel trapped in this type of culture may seek out companies that provide more creative freedom.

The best companies understand that the most effective way to change attitudes toward risk and failure is to encourage an environment where staff discuss and learn from their failures. A leading media company uses a gamification approach for doing this. They encourage IT employees to create videos on failure and use quizzes to reinforce the lessons learned. This approach teaches employees to learn from the failures that happen with innovation.

2. Cultivate an environment of creativity and innovation: At many startups, employees can suggest smart ideas and see them come to life quickly. At large organizations, however, employees are often many layers removed from someone who can make their ideas real. As employees in all parts of large businesses are increasingly tech-savvy and their experiences with technology permeate into their day-to-day roles, they become a key source of ideas for how to use technology to achieve business goals. But inability to turn ideas in to reality is a growing source of frustration for employees.

The IT team at a leading auto maker helps employees develop their ideas for technological innovation into prototypes and obtain investments for them. They assist in creating infrastructure, providing expertise and showcasing prototypes to gain funding. The practice ensures prototypes with high potential business value are maintained until business partners can provide the additional funding and support needed to move the prototype into full development.

3. Create growth-based careers: Employees at startups can grow their careers as fast as the company grows or evolves, which is sometimes very fast indeed. Employees at large companies also rate future career and development opportunities among the top motives for joining or leaving a company, but they usually move forward much more slowly.

The IT leadership team at a global high-tech company carves out time in leadership meetings to discuss the career aspirations of high-performing staff. This helps IT leaders understand the individual career goals of their teams and helps match them with available opportunities. As a result, the company fills operational needs faster and employees get opportunities to move their careers forward as soon as they arise.

When top tech talent look to make a career move, it’s safe to assume they are comparing large corporations and startups side-by-side. Corporate IT leaders should take this opportunity to modernize and deliver things that matter to IT professionals. Coupling innovation and development with the natural advantages of incumbent companies – things like stability and large customer bases – can make even the biggest company a fitting rival to a startup when it comes to attracting the best IT talent.