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Preparing for a Tighter Job Market

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Written By: Chuck Brotman

Hiring

May 11, 2022

Given public market volatility and global instability, it feels likely ongoing talent wars may soften quite soon. In some market segments, the softening is underway.

If interest rates continue to rise to stem inflation, investors may hoard even more cash on the sidelines.

In SaaS land, countless companies may face new realities. That anticipated higher-round valuation may be a bit more difficult to secure. Existing investors demand prudence. Achieving plan goals and managing unit economics may become more important.

Are we going to see more companies preemptively implementing layoffs to preserve cash?

I hope not. As a candidate for a new sales job, it’s never easy to identify risk. But there are things to be mindful of to help mitigate it and find the best opportunities in the market today. The good news is this: building these habits will also help you interview well in any market conditions and assess companies for their long term prospects relative to your career goals.

  • Look for companies with compensation transparency. Businesses that share ranges are more likely to have clearly defined budgets assigned for roles. It’s an indicator of financial prudence.
  • Pay attention to quota-to-compensation multiples. Companies spending a lot of much money on customer acquisition – and a big part of that is sales compensation – burn cash faster. And that becomes a bigger issue in a tighter market.
  • Find opportunities that get you truly excited. Dig into company case studies and stories. What business problems are being solved? How large is their pursuable market? What kind of outcomes do they seem to be influencing? Do they have a mission that inspires you? In what ways can you connect their success stories to work you have done? Can you relate as a consumer or in a personal capacity? (Note – this is not always immediately self-evident. Get curious about the business. Do your research.)
  • Pick your non-negotiables. Be ready to return to the office, for example if you are able to do so. How important is a specific benefits portfolio versus equity or PTO policy?
  • Treat each interview like a two-way street. Assess your manager for their industry knowledge, their EQ, and their general ability to inspire and coach you. Do the same thing with peer and cross-functional interviews. Do your homework before each discussion not merely to “impress the company” but to position yourself to do the best job evaluating.
  • Rather than merely asking “how many reps made quota last year” – of limited utility to assessing many early stage companies – ask the hiring manager to walk you through the overall hiring plan, and their general track record hiring. How quickly have new hires ramped in previous quarters, and how are they performing relative to more tenured reps? What led to this req being open today? Be context sensitive in the questions you ask.
  • In final stages, ask about cash runway: the cash left over the burn rate in the business. What can they share with you here in general?

Lastly, ask about their contingency planning if the market softens even further. Have they thought about it? What’s their overall confidence in the resiliency of their market given economic conditions today?

Even if the job market remains hot, doing your diligence like this can help you prepare to assess opportunities relative to others. By preparing for potential economic tightening, great candidates are also learning how to vet companies that have the greatest potential for success.