Talent remains one of the biggest challenges facing startups in the Middle East. Good talent is difficult to find and can be very costly. Convincing someone to forgo the comfort and attractive compensations of the corporate world to build something with a young startup can turn out to be a headache at best, and a nightmare at worst.
“Every single person [working for a startup] is like a unicorn,” says Roland Daher, chief executive officer a AstroLabs. “You work very hard to find them and then you work very hard to keep them and grow them. This is a problem that is common across startups.”
Last year, AstroLabs, the UAE-based incubator and co-working space launched its recruitment platform, to help startups in the region find and recruit talent.
“There is scarcity of talent in general. A startup, whatever phase it’s in – pre-product market fit phase, or they’re in early traction or full growth, need a type of people – the people who show up from day one and get to work while you still have a big debt and figuring out your processes and helping people make sense of things,” says Daher. “So you need people who can embrace ambiguity and discovery and experimenting and failing and at the same time, get less than they would at another place and stay.”
So far, AstroLabs Talent, which is headed up by Danielle Blizzard, has placed 50 candidates at startups and tech companies like Fresha, Rain and Careem.
“A lot of the skills in demand are around sales, operations, strategy, data and marketing, growth marketing is huge,” says Blizzard. “We’re also working with a lot of fintechs so compliance and regulations skills, there’s a huge need in that area and what we’re finding is the talent pool is so small in this region because they’re mainly from corporates whereas to have that startup mentality, we’re having to get them from outside the region.”
A lot of the startups that AstroLabs has recruited for are in the growth stages according to Daher, who describes the lack of growth resources in the region as “mindblowing”.
“We thought [demand for] data talent would be big this year, but the companies in the region are not fully ready yet, it’s not the wave we were expecting. Some of the hottest positions are the growth positions. It was mindblowing to see how scarce these resources are like VP of growth, chief growth officer,” he says.
A Wamda Research Lab report titled Access to Talent for Mena’s Entrepreneurs which surveyed 963 entrepreneurs and 1697 workers a few years ago, found that startups often struggle to find employees with the right technical and soft skills. Entrepreneurs have difficulty finding hires with sales (28 per cent), business development (27 per cent), and management (24 per cent) skills. Technical talent in particular can be expensive and there is an overall gap between salary expectations and salaries offered. Just over 50 per cent of entrepreneurs in Mena offer salaries ranging from $250 to $1000 per month, but only 13 per cent of the workforce is willing to work for less than $1000 per month. Just 12 per cent of the workforce said they would like to work for a startup.
The low salaries and lack of career development has led to a technical exodus according to Leen Ashqar, who leads value creation at Jordan-based VC Propeller.
“The relatively slow rate of employee development in the Middle East compared to that in Europe and the US, leaves senior tech talent in the region inferior to their corresponding counterparts abroad,” she says. “When we speak of employee development, we do not mean progressing up the corporate ladder to claim more senior titles, but rather the actual investment in developing employee skills, knowledge and capabilities.”
Few companies in the region have built a culture around career development and employee progression according to Ashqar.
“With the lack of a continuous-learning environment and a clear path to advancement, very often employees are left unchallenged, demotivated and hence become stagnant,” she says. “Every hire at a startup is crucial to the success of the company, and so founders cannot do with subpar team members. As a result, they are often left with no other option but to seek higher-calibre talent from abroad.”