Kate Cornick: Perceived risk and financial insecurity is turning job seekers away from scale-ups

Startup Genome

Dr Kate Cornick is the chief executive officer at LaunchVic. Source: supplied.

Victoria has a large number of talented individuals who are looking to take their career to the next level, but who are unaware of the career opportunities offered by startups in the ‘scaling-up’ phase.

The startup ecosystem is thriving, with Startup Genome recently reporting the Melbourne startup ecosystem has grown from a valuation of US$1.6 billion in 2018 to US$2.24 billion in 2019, and local fintech Airwallex achieving unicorn status in just three years of trading (making it the fastest company to do so in Australian history).

But in order for the next generation of Victorian unicorns to scale, their teams need to as well.

Consultation with the homegrown cohort of Envato, Redbubble and CultureAmp, and global scale-ups headquartered in Melbourne such as Square, Xero and Zendesk, revealed scale-ups are all rapidly growing their headcount.

So the question is: how do we connect talent with scale-ups and help both parties realise their growth potential?

Shining a light on scale-up careers

Scale-ups in Victoria (mature startups growing at 20% annually for three consecutive years) are annually growing their teams by 30% on average. But in a recent survey of 500 Victorian workers, despite a significant appetite to work at a scale-up, three-in-four respondents didn’t know scale-up companies exist in the state.

One of the common misconceptions we found was people thinking you need technical skills to pursue a career in the startup industry.

Michael Kyle, director of talent at Victorian-founded scale-up Redbubble, agreed this misconception was common among their potential recruits.

“The truth is, like any company, we’re hiring for roles at all levels and disciplines. We’re looking for people who can add value to our business, regardless of what they do. In fact, those who break the mould will often go the furthest,” Kyle said.

Ben Chan, chief operating officer at Melbourne-based Envato, which has grown its headcount from 120 people to over 550 in the past five years, added similar sentiments.

“We’re hiring across all functions: engineering, product, marketing, user experience and finance to name a few. We have big growth ambitions, so we need to hire a lot of people, both in Melbourne and across the world, who are passionate about they do to get us there,” Chan said.

Redefining job security

Scale-ups consulted by LaunchVic identified scarcity of local talent as an issue, while talent consulted as part of the research identified perceptions of financial insecurity (50%) and longevity risks (47%) as reasons for not considering a scale-up career.

If we’re to inspire ambitious Victorians into a new world of creative and innovative career opportunities, to the benefit of the state’s employment and economic prosperity, it’s time the perceived risks and misconceptions associated with working for a scale-up are put to bed.

Shining a light on the benefits of working in a scale-up is the first step to redefining this perception of risk.

After all, is it riskier to stay with a mature company that is continually ‘right-sizing’, or to move to one that has growing pains, where you’ll be constantly challenged to expand your horizons and learn new skills?

Including under-represented groups

Forbes reported diversity and outsider knowledge — particularly at the directorial level — improve profitability and performance by up to 43%.

“The benefits of a diverse workforce are undeniable — especially for an ambitious startup or scale-up,” Kyle said.

“Gender or racial and ethnic representation has proven to improve financial performance, enhance the likelihood of recruiting top talent and increasing customer satisfaction.

“Only when we realise true belonging for everyone, inside and outside the office walls, will we be able to grow sustainably and powerfully in the modern world.”

Homogenous workforces such as those in Silicon Valley are stifling innovation and can feel inaccessible to those who don’t fit the ‘startup mould’.  But that’s not the case in Victoria.

We’re already seeing a move towards diversity within the scale-up sector, with skills shortages in Australia pushing companies to open their doors to skilled individuals from all backgrounds, genders, cultures, social circumstances and abilities.

Melbourne has now surpassed Sydney as the top Australian city for tech firms, and research shows that local diversity and growth metrics are among the highest in the world. For example, one-in-three local founders identify as female, far beyond Silicon Valley’s average of one in 10.

In order for the ecosystem to benefit from Victoria’s available talent, we need to shift our approach to recruitment, and champion the benefits of career success and the progressive culture on offer to scale-up and startup teams.

Then, and only then, will a diverse pool of talented people from outside of the startup bubble be more willing and able to break into it, inspiring a new generation of founders and strengthening the ecosystem from the inside out.

NOW READ: “It terrified me”: Why Tessa Court believes the biggest threat to scale-ups is mediocrity

NOW READ: How Melbourne fintech Assembly hired 67 people in one year: A guide for rapidly scaling startups

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