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VC Predictions: Startups Will Rethink the Who, How & Where of Hiring

January 22, 2024

As we usher in a new year, the ever-evolving landscape of venture capital-backed startups continues to shape the future of technology and innovation. Whether it’s which roles that startups will prioritize, what compensation will look like, how AI tools will be used for hiring, or where employees will be expected to work, we predict that the world of talent in 2024 will continue to surprise us all. In the year ahead, we’ll be watching these major talent trends: 

The Who: Hiring beyond revenue leaders will matter more than ever

While hiring revenue leaders was the trend of 2023, the harsh realities of the current market have shown that bringing in a new leader may not always be the silver bullet. People leaders will adjust their hiring focus in the year ahead by:

  • Understanding that the customer is king: We saw a lot of companies replace revenue leadership in 2023, hiring new sales and marketing executives. As 2024 gets underway, it’s clear that revenue-focused hiring is here to say. What’s evolving is the process of how to attract top candidates. Companies must meet the needs of their customers—and in order to do so, hiring processes need to be clearly aligned on who their ideal customer profile (ICP) is, what challenge they are actually solving, and how cross-functional teams can work together in order to provide world-class solutions to their customers. Gone are the days of generic hiring specs and abstract interview questions. CEOs and teams need to dig deep and align on the challenges at hand to find the person most qualified to solve them.
  • Adjusting compensation in 2024: Over the past 18 months, equity has seen a significant retraction—roughly 25%, according to Carta. Surprisingly, this isn’t due to the fact that valuations have fallen (even though they have) but rather because employees received fewer shares. Given that it’s difficult to decrease salary, it’s easier to flex on equity pools, which companies have tightened to extend runway. 

This year, we expect cash compensation to stay roughly at the current market rate with equity as a tool to reward top performers. Although compensation is still highly competitive for the best talent, we don’t believe that levels will return to the frenzied high from 2020-21. We also believe that companies will operate with leaner organizations, well-defined roles, and clearer measurements of performance. Leaner teams will also allow for increased equity grants and incentives, as existing equity pools generally serve a smaller employee base.

In 2024, we expect hiring to keep pace with 2023 levels and cash compensation will remain steady, with equity being leveraged as a reward mechanism for high performers. Looking ahead, we expect companies to continue to rally around top performers—and reward accordingly.

  • Competing for AI talent: With the rise of artificial intelligence and machine learning embedded into companies, we expect that technical AI talent will be in high demand. In order to attract—and win—top ML engineers or AI researchers, startups need to have an interesting problem to solve, a well-articulated pitch, and compelling compensation. As key roles open up for the year it will be essential to build the right process around hiring and develop a strategy to attract and win sought-after talent.

After a challenging period that has included rounds of layoffs and a more measured approach to hiring, we predict that leaders in 2024 will continue to focus on doing more with less and retaining top performers.

The How: AI-enabled hiring is here to stay

Generative AI technology is enabling all facets of life, and recruiting processes and HR are no exception. 

Hop on a call with a recruiter these days, and you’ll likely find them using Metaview, AI-generated note taking software. This technology allows recruiters to easily summarize candidate assessments, mitigate bias, and identify candidate fit. Automating manual processes allows recruiters to focus on more strategic, human-centric components like candidate experience and stakeholder management. 

AI can also help track employee engagement. By using ChatGPT along with Coder’s* suite of existing tools (Zapier, Google Forms, and Notion), Chief of Staff Camilla Booth is saving countless hours that she used to spend reading and summarizing the Google Form responses to the startup’s monthly pulse surveys.

Sample ChatGPT prompt: “This survey was sent out to an employee to understand whether they are happy at the company. Summarize their response and remove every person’s name.”

Pro tip: To increase transparency, Coder uses Zapier to add these anonymized summaries to its main hub on Notion so that each employee can see the monthly pulse survey results.

Similarly, companies like WorkBoard* embed AI to OKR-setting and strategy execution to create accountability, alignment, and results in organizations. This allows companies to create accountability and ensure they meet their targets in 2024. AI tools like WorkBoard will allow companies to spend less time on processes like manually checking work/progress and more time building products that meet the needs of their customers.

In 2024, we predict that AI tools—whether for recruiting, finance, strategy, or content—will unlock operational efficiency, productivity, and speed while allowing individuals to spend more time on the hard work of building great companies and products. 

The Where: Return-to-office policies will (finally) stick 

After a few years of companies waffling on return-to-office policies followed by the unfortunate reality of layoffs, office policies are generally set. Companies have decided on their go-forward ways of working and have set expectations with their workforce. Candidates are being recruited accordingly and the new norms for working are established. We see a lot of in-office policies that require in-person work for two to three days a week, and full-company, all-hands meetings at least once a year in person. 

Regarding the challenges and known concerns with a remote or hybrid existence, startups are addressing the ways that they foster collaboration and create cohesion in various ways. In 2024, we anticipate that companies will focus on increasing productivity, enhancing culture, and developing their talent with new tools, in-person forums, and new practices related to employee engagement. 

For those that have established themselves as “remote-first” companies without physical office spaces, they’re committing to bringing leaders and teams together on a quarterly basis and emphasizing learning and development. 

We talked to a couple of Chief People Officers in our portfolio who described the evolving workplace experience: 

  • One CPO advised that companies should “be purposeful about what people are doing when they’re in the office—it shouldn’t be the same thing they can do at home.” 
  • Companies may shift the role of office manager to event/experience management, or managers may encourage teams to use in-person time for collaboration and learning. That’s why GGV Capital U.S. portfolio companies get access to a learning module, Founders +  Leaders, where employees can participate in live training sessions on topics such as tackling bias to managing change. 

The bottom line: No matter if companies are in person, hybrid, or remote, it’s important to carve out opportunities for teams to come together and access learning.

In 2024, we predict that startups will change who they hire, how they hire, and where they’ll expect employees to work. Aligning on everything from product-market fit and Ideal Customer Profiles (ICPs) to AI-enabled hiring practices and return-to-office policies will be the difference between startups that survive—and those that thrive.

*Represents a company in GGV Capital U.S.’s portfolio