Why Startups Should Embrace a Distributed Team Model to Scale – Part 1

One of the main pain points of early-stage startup founders is filling various positions with the required skill sets. With the overdemand for tech talents in Israel, the situation is not getting any easier.  

In fact, the number of open positions in Israel’s tech sector has grown from 13,000 in 2020 to over 16,000 this year. This indicates the chronic tech talent shortage in the country. And according to the 2020 High-Tech Human Capital Report from the Israel Innovation Authority and Start-Up Nation Central, over 60% of Israeli tech startups find it difficult to recruit employees for their R&D departments.  

In this article, let me show you how an optimized employment framework — the one that is best for both employers and employees — looks like and why it’s important to optimize the employment experience from both sides.  

I’ll also tackle how early-stage startups could turn Israel’s chronic talent shortage into an opportunity to access global talent without sacrificing the key attributes they need for their DevOps teams, such as responsiveness, availability and professionalism.  

But let me start by asking you these questions:   

Is the workforce market optimized for early-stage startups?    

To understand this, ask yourself -  

    1. As an employer, do you think the labor market is optimized? Is it easy for you to recruit the right talent for your team? 

    2. How about for employees? Do you think the labor market is optimized for them? Are there enough good opportunities for them out there, in case they decide to take their careers to the next level?   

The answers to these questions are obvious if you're from Israel. The truth is, the answers highly depend on where you are located.  

    1. In the Israeli tech market, for example, most employers would answer NOT OPTIMIZED to the first question.  

    2. For the second question, however, most employees in the tech industry would answer WELL OPTIMIZED. Why? Because these employees are highly satisfied considering the level of high-quality, high-rewarding jobs available to them. 

This scenario reflects the current situation in the Israeli tech market where an overdemand for tech talents exists. 

Naturally, whenever there is an overdemand for workforce, employers will be on the "losing end," and will suffer mainly from two pain points:  

  • Long recruitment period
  • High employment costs

It is not popularly spoken about, but these pain points are a real issue for early-stage startup founders. Not only that, in many cases, these barriers challenge them significantly in executing their work plans. 

Now the question is — how can we optimize the employment market for early-stage startups?  

Or in simple terms, how can we minimize recruitment time, and hire the right team member at a reasonable cost? 

To understand this, we need to look at the elements that are currently missing but can form the optimized workforce market. 

Which elements are missing for an optimized workforce market?   

To optimize the workforce market, we should not only optimize recruitment period and employment cost. Rather, we need to think outside the box, and ask ourselves, Which elements are missing in the traditional workforce market?

Essential Elements of an Optimized Employment Framework

1: One globe, one employment market

While the global freelance market is booming, the ability to be employed by a company abroad while living in one’s home country is still very limited.

If a manager wishes to engage the services of a talent overseas, a service agreement is the easiest way.

However, in case the talent wishes to enjoy the stability and regulation associated with the employment framework of their home country, the company would have to establish a registered company in the said country.

Obviously, no company will incorporate a registered office in a foreign country for a single talent.

Thus, the ability to engage with talents across the globe, while providing them with all the additional benefits which exist in the employment framework, is another essential element required for an optimized and balanced global workforce market.

2: Flexibility in scope, fully dedicated employees

Early-stage startup founders are required to build a team that consists of a wide range of skill sets. These could include:

  • product manager
  • UX designer
  • UI designer
  • front-end developer
  • backend developer
  • DevOps
  • support engineer
  • Dev leader
  • marketing analyst
  • content writer
  • social media manager
  • sales representatives
  • sales engineer
  • finance manager
  • bookkeeper, and many more.

These are only a part of the positions which SaaS startups commonly need. Typically, startup founders recruit full-time employees to core positions and engage service providers for positions that do not require a full-time employment.

Now, the problem is, in most cases, service providers tend to be not as dedicated as you need them to be, just like employees on payroll.

And it’s not because they are bad, but because the business model of service providers combined with the fact that humans are limited in their ability to split focused attention, i.e., to several clients at once, makes them less efficient.

I have been working with remote teams from different parts of the world for eight years, but let me also explain this based on the experience of people I know who have previously worked with service-based agencies for their DevOps needs:

Service providers, such as professional service agencies or freelancers, are a business. As a business, they aim to gain maximum clients on their portfolio and serve as many clients as possible to maximize their income.

The problem arises when two clients ask the service provider to do something at the same time. Of course, the service provider would have no choice but to prioritize one client over the others.

Consequently, the clients that the service provider does not prioritize would feel like they do not have a “dedicated team member.”

The result? Broken trust.

It’s fairly simple: When someone isn’t available or “fully dedicated” to cater to your needs, you tend to think that that individual is not trustworthy.

The ability to engage the workforce on a partial position, while keeping a fully dedicated experience alive, is a crucial element of an optimized employment market.

3: Work remotely, keep sociability

As mentioned, being employed – not contracted as a freelancer – by any company around the world, whether that company has a registered office in your home country or not, is a key feature of an optimal workforce.

Workers who are not fully employed and are simply freelancing tend to become “lonely” due to the lack of face-to-face human interaction, which is necessary for people who are naturally sociable.

Ask any freelancer, and they would tell you how it is like to be in this situation. Consequently, once the employment market becomes global, as the freelancing market, loneliness may become a new problem.

Thus, the ability to be employed by a company abroad, while maintaining a professional social life, is another essential feature for an optimized workforce market.

Wrapping up

For employers, an optimized market will enable quick engagement with talents in a flexible position scope, while guaranteeing a fully dedicated experience.  

And, for talents, an optimized market will offer a wide range of challenging and rewarding job opportunities, with the stability and recognition available in the employment framework. In addition, the talent will be able to maintain a professional social life.   

At IAMOPS, we believe that optimizing the remote employment experience for both employers and employees — from recruitment to onboarding, to managing a fully distributed team — is the answer to the worsening tech talent shortage in Israel.

On Part 2 of the article, I’ll tackle why startups should embrace distributed teams and how early-stage startups could have access to global talent and build a distributed team that is 100% dedicated, highly responsive and extremely professional. 

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