Democratizing Tech Recruiting for Startups: Tips and Tricks

tech recruiting for startups

The journey from early stages to achieving rapid growth can be both challenging and rewarding. Specifically, for a tech startup, the dynamics of the market and the complexities of the tech industry can present unique hurdles. However, with a clear vision on building affordable teams, any company can navigate these challenges, ensuring they’re not just a fleeting name but a lasting force in the industry. 

In this article, we’ll delve into the intricacies of democratizing recruiting for startups and provide insights to fortify their foundation for sustained success.

Table of Contents

Why Smart Spending of Investment is a Must Right Now

Today startups face a relentless demand for progress amidst the ebb and flow of funding rounds. The emphasis on meticulous financial prudence cannot be overstated. Engaging in blind gambles with money can jeopardize the vision a startup hopes to realize. Instead, responsible allocation and utilization of investments not only stabilize the present but also cement the pathway for securing future rounds of funding.

One example of a wise usage of budget resources is a shift to cheaper hiring options – from employment to contracting. According to new LinkedIn data, the number of job postings for contract roles in the technology industry tripled in the last two years. Meanwhile,, a tracker of downsizing in the tech sector, shows that more than 150k white-collar tech professionals were laid off in 2022.

TurnKey Tip:

Hiring on a contract basis, you can engage contractors globally and compensate them in foreign currency using an agreed-upon payment method. Although they don't benefit from typical employee perks like vacation days or severance pay, you can provide unique incentives using digital platforms such as our partner Easop. Contract hiring enables businesses to reduce costs and tap into talent reservoirs outside their native regions. This strategy broadens the scope to onboard proficient professionals with diverse salary expectations, ensuring the acquisition of the finest talent for the company's operations.

The allure of startups is their promise of rapid growth. Yet, the flip side is a lurking risk. Every coin poured into the venture carries with it the potential for monumental returns, or conversely, the grim possibility of a total loss. The vision of every budding business teeters on its decisions around money. Smart spending becomes the pivotal priority. By focusing their investments judiciously, startups enhance their resilience against market unpredictabilities and augment their likelihood of flourishing.

Factors Affecting Startup Investment Budget

Determining the quantum of investment isn’t arbitrary. It is governed by a mix of determinants including the startup’s evolutionary stage, its industry backdrop, and revenue projections. For instance, a startup on the trajectory of rapid growth might channel between 15%-30% of their anticipated revenue into marketing. In contrast, a more established enterprise, predicting moderate expansion, could earmark just 10%-15% for the same. Aligning with the vision, technology-related investments would be dictated by the bespoke needs of the business.

Optimal use of investments isn’t merely a strategy; it’s the lifeline for startups. This discerning approach magnifies the return on investment, trims the chances of faltering, and amplifies success probabilities. By funneling money into pivotal sectors like marketing, technology, and talent hiring, startups can harness maximum output. It’s this kind of judicious allocation that ensures robust cash flow management, sharp decision-making pivoted on data insights, and optimal resource deployment.

5 Examples of Smart Spending in Startup Investments

tech spending in recruiting for startups

#1. Hire in Offshore Locations

Navigating today’s dynamic startup landscape, startups are leveraging recruitment agencies to streamline their hiring process. Offshore recruiting has emerged as a savvy strategy for startup recruiting, granting access to job seekers and qualified candidates across global markets. These recruitment experts provide startups the flexibility to recruit and hire based on real-time needs.

Bring Aboard Skilled Developers from Latin America and Eastern Europe Without Straining Your Budget. Discover How with TurnKey.

Job seekers internationally present a unique opportunity, not just in terms of skills but also in cost-effectiveness. Offshore hiring from promising locations can mean significantly lower operational expenses compared to domestic recruitment, with the added advantage of tapping into diverse talent pools worldwide. This can be particularly beneficial for roles demanding niche skills, where the right talent might not be locally available.

However, as every startup recruiter knows, while the hiring landscape broadens, challenges such as language differences and aligning expectations can arise. Efficient communication during the hiring process using the right partner can alleviate these issues.

Ultimately, offshore recruiting is more than just filling jobs. It’s about aligning the potential candidates with the company’s vision, ensuring a mutual fit for both the candidate and the companies.

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Recognizing the potential of offshore talent, Headspace partnered with TurnKey to establish a software development team in Mexico. Despite its industry acclaim, Headspace confronted hurdles when trying to attract premium development talent locally without overshooting their budget. 

Within a mere 30 days post signing the contract with TurnKey, Headspace welcomed the first batch of hires for their Mexican innovation center. The onboarding process was seamless and expedited. Encouraged by the early successes, Headspace broadened the initial plans for the innovation center.

Team Composition:

  • 2 Python Engineers,
  • 4 Mobile Engineers,
  • Ongoing recruitment for additional roles.
“TurnKey was able to build out the first team in under two months of working with Headspace. The talent was overwhelmingly positive. We were surprised at the quality of the engineers Turnkey was able to find and the speed with which they were able to find them.”

#2. Ensure Team Retention

Why do new hires fail | TurnKey

For startups, retaining top talent is paramount. The hiring landscape is fiercely competitive, and losing an essential member can be a significant setback. At the heart of retention lies the company’s culture. Building a strong company culture isn’t just about an attractive office or occasional perks; it’s about making every employee feel intrinsically connected to the company’s mission and vision. When employees resonate with the company’s ethos, they become indispensable parts of the team.

The tech sector grapples with a high tech employee attrition rate. Projections from the US Bureau of Labor Statistics forecast a 21% surge in demand for software developers between 2019 and 2029. Given this mounting competition for your team, adopting robust retention strategies becomes imperative to retain your esteemed software developers.

Employer branding goes hand in hand with company culture. It’s the external image a startup company presents. An appealing employer branding strategy not only attracts potential candidates but also reinforces the pride and commitment of existing employees. This strengthens the bond between the employee and the company, often leading to prolonged tenures within the same organization.

recruiting stats

Moreover, while building a great team, startups should prioritize competitive benefits and compensation packages. Being recognized and rewarded appropriately in the industry instills loyalty. Beyond just remuneration, providing avenues for growth and learning can be pivotal. Personal development doesn’t only enhance the talent pool within the business but ensures that employees see a future within the organization, further solidifying the bond.

While hiring the right fit is crucial, ensuring they stay is an art. For startups, weaving retention strategies into the very fabric of their organization, from the company culture to employer branding, ensures that they don’t just build teams but foster communities committed to a shared mission.

TurnKey Tip:

TurnKey, an offshore software development company, has slashed developer churn rates by over 50% with its tailored retention program. The program prioritizes employee well-being, fosters innovation, and provides avenues for personal growth. Key strategies include:

    Regular one-on-one team member interviews to preempt issues.
    Dedicated HR support, ensuring smooth team operations.
    Ongoing professional training seminars on innovative technologies.
    Celebrations recognizing both milestones and consistent performance.
    Offering advanced English classes and financial education.
This holistic approach has cemented TurnKey's high retention rate, highlighting the mutual benefits of investing in employee well-being.

Retention Best Practices

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#3. Introduce a Flexible Bonus System

Navigating salary negotiations in startups calls for innovation. Beyond mere money, a flexible bonus system tailored to both team and individual milestones strengthens employee motivation and aligns with the company’s vision and mission. Surpassing sales targets or exceptional services can trigger monetary rewards. Simultaneously, non-monetary benefits like extra time off can reward standout performers. Periodic reviews ensure the bonus structure remains relevant, adapting to the evolving vision, mission, and teams. This approach, combined with consistent support, refines employee and team incentives, making them pivotal in achieving the startup’s goals.

TurnKey Tip:

Unlike our competitors, TurnKey provides clients with complete transparency about all salaries, fees and expenses. We never leave you in the dark or at risk. Moreover, we even offer easy to pick bonus plans for those clients that also want to provide additional cash incentives or equity plans that track with performance – and TurnKey never takes a portion of these incentive programs. Yet another reason our staff retention rates are so high…

how to reduce churn

Check out how we can help build lasting dev teams.

Faced with surging demand,  R1 (NASDAQ: RCM) company sought to bolster its engineering brigade while enhancing control over development and security infrastructure. 

We helped them hire 40+ full-time staff across different tech specialties. As a result, R1 has dramatically boosted their productivity and currently has 51 releases per year (weekly cadence). Moreover, they enjoyed less than 5% average annual churn over the past 3 years, ensuring minimal disruption to their engineering needs.

TurnKey’s YourShore model allows us to easily integrate developers directly into our organization so that they are truly my team. I honestly forget most of the time that they aren’t working in the same building as me.
Anna AlisovaGeneral Manager at R1

#4. Automate and Emphasize AI Prompt Engineering Skills

Startups are strategically placing bets on technology like automation and artificial intelligence. The potency of these innovations isn’t just in the tech itself but in the combination of the tech with elite technical talent.

According to McKinsey’s analysis, specific tasks, especially those involving data science and data processing, are ripe for automation and AIoT. These account for nearly half of all functions across industries. The rapid evolution of generative AI, especially when integrated into a management platform, accentuates the technical automation of these tasks. This harmonization facilitates the spread of technologies that elevate the prowess of the workforce.

However, a mere platform or technology isn’t the solution. The real magic happens when a seasoned recruiting team attracts adept engineers who can drive and maintain these innovations. Therefore, it’s a wise move for startups to invest heavily in nurturing engineering skills. This ensures that they not only tap into the advantages of AI and automation but also set the gold standard in the industry.

The team must also be equipped to handle load balancing in this data-driven environment, optimizing workloads and ensuring efficiency. Moreover, as AI continues to permeate every sector, soft skills—like critical thinking, empathy, and creativity—become as vital as technical know-how. Surveys from sources like Pew underline the importance of these intangibles in the imminent work ecosystem. It’s pivotal, then, for startups to not only champion the latest in tech but also the human elements that make technology meaningful.

#5. Ensure Legal Protection

Ensuring legal protection is not just about survival – it’s about carving a path for sustained growth. For startups, diving into the business world can be thrilling, but without a proper legal foundation of contracts and agreements, they can quickly find themselves in murky waters. A well-crafted contract not only defines the relationship between companies and their partners but also sets clear expectations, minimizing the risk of future disputes.

Compliance with local and international regulations is also paramount, especially for those startups venturing beyond borders. With the industry being so dynamic, regulations can shift rapidly, and oversight can cost a company not just financially but can also tarnish its reputation. Having a keen understanding of these regulations, and staying updated, helps businesses avoid potential pitfalls.

Moreover, the importance of legal support and consultation cannot be overstated. Just as startups would invest in services to enhance their product or platform, they must equally prioritize legal consultation. Investing upfront in sound legal advice can prevent substantial challenges down the line, streamlining the entire process.


For established companies and nascent startups alike, the legal facet of the organization deserves meticulous attention. By proactively safeguarding the business, startups position themselves not just for survival but for success in the competitive industry landscape.

TurnKey Tip:

Bid farewell to legal vulnerabilities. Clients using TurnKey are fully protected from potential employment or tax liabilities, simplifying customer agreements and NDAs, fundraising, and business transitions. We've set up robust legal frameworks to counteract potential offshore hiring risks, and we consistently track legislative shifts in each country to ensure zero exposure.

Your Startup's Next Big Leap Could be Powered by Developers from Offshore Locations Without Legal Hassles. Contact TurnKey and Find Out How.

Wrap Up

Navigating the startup ecosystem requires an acute focus on strategic recruitment. Let’s encapsulate the article’s essence:

  • Smart Spending & Recruitment: Startups must strategically invest to attract talent. Every dollar spent should aim to establish the company in its market, ensuring the acquisition of new talent resonates with the vision.
  • Leveraging Partners: Recruiting partners connect you to large pools of candidates, streamlining the recruitment process and making it easier to recruit the right person for jobs across sales, marketing, and other domains.
  • Targeted Hiring: It's not merely about filling positions. The person you hire should be genuinely interested and fit seamlessly within your teams. This goes beyond traditional recruiting and delves into ensuring every new hire aligns with the company's ethos and objectives.
  • Employee Benefits & Retention: Offering competitive benefits and fostering a nurturing environment is key to retaining top talent. Beyond initial recruitment, it's about ensuring employees feel valued and see a future with one company.
  • Adapting to Change: The business and industry landscape is always evolving. Established methods in some sectors might not apply to others. A flexible approach to recruitment ensures startups stay relevant.
  • Team Dynamics & Growth: It's about more than just a job. Building cohesive teams is about fostering growth, ensuring each person isn't just a number but a valued member.
August 25, 2023

TurnKey Staffing provides information for general guidance only and does not offer legal, tax, or accounting advice. We encourage you to consult with professional advisors before making any decision or taking any action that may affect your business or legal rights.

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