Happy new year! Now that the dust has settled on what was a tough 2023 for startups and VCs alike, it’s time to look forward to what the coming year might have in store. The bumper rounds and valuations of 2021 may be long gone, but there are signs for optimism, with growth back on the agenda for many tech scaleups.
What will that mean for the senior talent market and those businesses that are planning to add to their leadership team this year? Well, we’ve given our crystal ball a bit of a polish and made some predictions for what we expect to see over the next twelve months:
Q1: a good time to hire
Sadly, several high-profile European startups found themselves in big trouble in 2023. Britishvolt entered administration, Babylon Health filed for bankruptcy, along with Volta Trucks (who have since been acquired by a New York-based hedge fund).
Lay-offs were widespread and we're likely to see more over the next few months as ventures that have failed to raise another round are now running out of runway.
For scaleups that are hiring, the flipside is that there is more available talent – although, at a senior level, good people are soon spoken for. In fact, many will probably have their next move (or several solid options) already lined up.
Accomplished leaders who would ordinarily be hard to tempt away are more likely to consider a move when approached.
The real advantage lies away from the open job market. Uncertainty and stalled growth plans quickly lead to frustration and itchy feet, and we’re seeing a lot of that right now among those who aren't actively looking. Accomplished leaders who would ordinarily be hard to tempt away from their mission (and equity/share options) in their current company are more likely to consider a move when approached, and we expect to see this trend continue throughout Q1.
If you’re planning on making a senior appointment and have a strong proposition, it should be a great time to hire.
In sectors such as climate, renewables and greentech, FOAK (referring to first-of-a-kind plants) was something of a buzzword in 2023. Startups that were ready to move out of the lab and start scaling to meet commercial demand faced funding challenges, but many pioneering companies managed to source alternative financing and 2024 should see their evolution into scaleups.
Furthermore, there is some expectation that VCs will be more inclined to back FOAKs this year. Speaking to Sifted, Jan Miczaika (Partner at HV Capital) said: “there is a whole batch of exciting startups that have raised seed rounds and are now demonstrating technological readiness. I predict we will see a series of large Series A and B rounds across novel materials, chemicals and plastics, to name a few.”
We’re anticipating an increase in demand for senior people in areas such as engineering, operations, production, and technical disciplines.
Companies that are building FOAK plants – as well as those that are moving into full-scale commercial production – will, no doubt, need experienced leaders and we’re anticipating an increase in demand for senior people in areas such as engineering, operations, production, and technical disciplines.
The transition from an R&D focus to meeting crucial commercial milestones and investor targets can be a challenging cultural shift. Scaleups should, therefore, look to bring in those who have held a similar role before, where they have had to prove, commercialise, and scale novel technologies and/or processes, and know how to navigate the challenges and opportunities.
The rise of AI
If there’s one sector that emerged from 2023 relatively unscathed, it’s AI. Across Europe, AI startups were the recipient of some of the largest funding rounds, and 2024 should see many of these companies move into growth stage, as enterprise and commercial adoption of AI technology becomes more widespread.
Of course, this will also mean an increased demand for talent in this sector. Europe has a strong bedrock of AI talent but, while the market is maturing, it is still relatively young so it may be necessary to cast a wider net to find senior, more experienced hires (eg. looking to the US).
At the end of last year, Atomico’s 2023 State of European Tech report had some interesting data on the direction of travel, finding that more talent is moving from the US to join European tech companies, than vice versa. We wouldn’t be surprised to see this trend continue into 2024.
Talent without borders
On that note, we expect that the talent market will only become more global this year. Remote/hybrid working isn’t going away, and businesses are increasingly seeing the benefits of being able to hire pretty much anyone, anywhere in the world. Not only does it expand your hiring options, but it facilitates greater diversity too.
Ambitious ventures are willing to relocate people to build their dream team.
Even for companies/roles that require a physical presence in a particular
site, it is becoming commonplace to search well beyond a commutable radius of the office for talent. Among scaleups, there is now much wider recognition of the value and impact of hiring A-players, and ambitious ventures are willing to relocate people to build their dream team. We predict to see even more of this in 2024.
Increased demand for fundraising / exit experience
Finally, it’s great to see that many experts are predicting that VC activity will pick up by the second half of the year and an increase in the number of scaleups closing funding rounds. If this bounce-back transpires, the demand (and competition) for talent will be hotting up too, so if you’re planning to add to your senior team this year, don’t leave it too late to act.
Scaleups preparing for either a fundraise or an exit often look to bring in a high-calibre Chairperson, and/or an experienced CFO.
In fact, there are signs of a rebound for both investments and IPOs so we anticipate that companies will be thinking about getting the right team in place to deliver. Scaleups that are preparing for either a fundraise or an exit often look to bring in a high-calibre, well-connected Chairperson, and/or an experienced CFO - people who have been through the process before and know how to navigate it. We’ll be expecting to see more demand for these kinds of individuals as 2024 progresses.
If you’re planning on adding to your leadership team this year, we’d be delighted to help. As a specialist executive search firm for scaleups, we’re experienced in working with high-growth, investment-backed businesses and enabling them to hire world-class talent. So please get in touch – we’d love to hear from you.
In the meantime, feel free to check out some of our other resources and guides:
C-suite salary report 2023 - for the latest data on compensation, attitudes and priorities for founders and non-founders in startups and scaleups
Case studies - for examples of how we've helped other scaleups build their leadership teams
How to make a successful offer - our comprehensive guide to managing the offer process and boosting your chances of success
The formula for attracting A-players - insights on putting together an attractive compensation package
Advice for scaleups hiring in the US - guidance for European companies looking to make a US-based appointment