Lee Whitley, the CEO of Whitley Recruiting Partners, delved into the evolving dynamics of the software sales talent market and the critical factors shaping the industry. From changing behaviors to the impact of the software tech bubble, Whitley shared valuable insights and strategies for both employers and candidates.
Software Sales Recruiting in 2024: What top talent really wants
Founders, CEOs, and hiring managers of all sorts want to know how to land the top talent as the economy recovers, rates decline, and dry powder from VC/PE investors is released. There is a massive opportunity to attract top talent right now – even for Seed and Series A start-ups with under 50 employees. Below I’ll share some tactics and stories to show how anyone can win in the next war for talent.
Back in the Day
I’ve been recruiting software sales professionals for growth-stage SaaS companies in Raleigh since 2018. From 2018 to March 2020 the market seemed peaceful and steady. Recruiting sales talent for start-ups seemed straight forward. It all made sense and everyone was on the same page around compensation. Pendo had just raised a Series C, Bandwidth had recently IPO’d, and the Raleigh Durham start-up ecosystem was on a steady climb “up and to the right” with no end in sight. The ‘going rate’ for AEs was $45k-$60k and $35k for SDRs ($35k!). I remember having a client willing to pay a $70k base for Account Executives! The demand for that job was sky-high and we assembled a team of nothing but President’s Club winners with 3+ years of experience exceeding a new business SaaS quota. Then, COVID rocked everyone’s world but only for a few months, and from 2020-2022 we witnessed a historical hiring boom in tech that allowed significant candidate leverage over employers. However, in the last 18 months I’ve seen a massive shift in candidate behavior. You could feel the air beginning to leave the building around July 2022 when the Fed raised rates for the 4th time in a row. And in 2023 we saw massive layoffs which have continued and maybe intensified in 2024. So, what’s my point? It’s simple:
Raleigh software sales recruiting is changing. And what candidates seek today is different than during the boom of remote work, massive hiring campaigns, and (often times) inflated salary expectations.
Story Time: The Tortoise beats the Hare
Old trends always come back into vogue.
Let’s go back to 2021 and pretend you’re in your late 20’s. 3-4 years of software sales experience. 2-3 years of closing experience. What was cool at that point? Probably a $90k base remote role for an NYC-based company reporting to someone you’ll never meet. Maybe helping the company move up market into the enterprise space. Or to help them pivot into a new vertical/industry.
What’s cool now? 3 days/week in-office. With a team of 10+ coworkers that live in Raleigh-Durham. With a reasonable salary that covers living expenses. And a locally-based manager that will look you in the eye and tell you whether the company’s financials are solid or not. I heard a great quote from a local Director of Sales who’d been laid off even though his team of 20 sellers was the #1 performing team globally. Brutal. Out of his control. What did he say? “The next company I work for is going to have solid unit economics.”
Enter the Elephant…
Base salaries – this is something both me and my recruiting team talk about often. It’s often a binary for candidates and it should be, but the shift in candidate sentiment is undeniable. I have examples of candidates who in Q2 2022 would not interview unless the salary was $100k+. Many of these reps had less than 3 years of closing experience. Many of those same reps have no problem today interviewing at a $70k base with solid lead flow, especially if there’s a hybrid in-office component (this is the opposite of what I heard in 2022).
Don’t get me wrong – a recent college grad with student loans cannot live off of a $35k base. And a 10 year sales veteran who’s supporting a spouse and 2 children cannot live off of a $50k base. I also agree that the higher the base the better! However, the #1 difference I’ve seen in the Raleigh-Durham sales talent market is a more realistic expectation on base salaries. This is of course good for founders, CEOs, and the finance dept. Talent is less expensive, on average. But my friend who talked about ‘unit economics’? He’s right too – because if the salary is $90k and only 25% of sellers are hitting a $750k quota then everyone is in trouble.
Shifting Gears:What companies can DO in order to win (Tactics)
- When interviewing, companies must sell the economic tailwind and security of your product and/or the industries you sell into. If you’re hiring in 2024, you either sell into a relatively recession-proof industry or you have fresh funding. Or both. The #1 thing that candidates are looking for is security.
The #1 thing that candidates are looking for is security.
A $120k W2 for the next 3 years is more valuable than a $90k base for the next 9 months.
As I’m writing this at 12:54pm on February 21, I got a call from a former placement of mine. He sold recruiting automation SaaS, was #1 on his team and laid off due to macroeconomics. Nobody is buying recruiting tech during a recession. He lives in Greensboro (this is important). We talked on the phone for 20 minutes. You know what he didn’t ask about? Salary. Remote. Funding. He simply wants a job where he can stay for the next 3 years and continue to provide for his family. Driving to Raleigh Durham from Greensboro 3 times/week? No problem.
Now of course the tides will turn again. The election season will end, rates will drop, VC funding will flow, and headhunters from NYC will rally again.
- Companies must recognize the correlation between a swift interview process and higher offer acceptance rates. Companies that complete the interview process in under 15 business days demonstrate commitment and prevent candidates from losing interest. Beyond 15 days, the acceptance rate drops to as low as 33%, because candidates may entertain other offers or second-guess their decisions.
- Talent acquisition should be treated as an offensive growth strategy, not relegating talent acquisition only to HR. Interviewing and talent acquisition are sales exercises, integral to a company’s success. Tight internal recruiting processes can enable companies to attract top talent without overstretching their budgets.
The 2024 Talent Market in the Triangle
In the Triangle, a hub for software tech, the impact of layoffs has been substantial. The market was previously flooded with more talent than there were jobs, creating a challenging environment for job seekers. Non-software companies may have a better shot at acquiring top talent now. Candidates, having been burnt in the past, are more risk-averse and less likely to negotiate.
Looking ahead to 2024, I predict an uptick in the talent market in Q1 and Q2, with an anxious yet ready pool of job seekers. Companies hiring during this period are likely to benefit from a favorable talent pool. Companies would be smart to provide a “safe place” for employees during lean times, as this could contribute to higher retention in the event of a job market shift.
Our extensive experience and insights offer a valuable perspective on the current state of software sales recruiting, emphasizing the need for adaptability, stability, and a strategic approach to talent acquisition in this dynamic landscape. Contact us today to discuss your needs.
