Stop Insisting On Full-Time If You Want Skilled Talent

When people whose own work history is entirely full-time employment come to me for advice, they very often talk about “it’s hard to secure talent” and “it’s hard to secure full-time talent” as if they were the same thing.

But they’re not. There’s no need to insist on full-time.

Especially if you’re trying to secure someone with specialized skills, that kind of person is in high demand across the market.

There’s an important general principle here: people who hold multiple jobs at once, so-called portfolio workers, tend to earn more than people who work a single job full-time. Being high-skill and in high demand is a major factor, as mentioned above, but there’s another effect you need to understand — a kind of “minimum wage” that operates in this world. For any job, there’s usually a market-standard “minimum amount that isn’t rude to offer” when you want a high-skill person involved. This varies by industry, skill, and the nature of the work, so there’s no single figure. But in most cases it comes out higher than what you’d get by converting a monthly salary into an hourly rate.

Say there’s someone earning $3,800 a month. Assuming 20 working days a month, 8 hours a day, plus 40 hours of deemed overtime, that works out to an hourly rate of about $19. Suppose he has special AI skills, and you bring him on as a reviewer for one of your company’s AI-related projects. As a reviewer, he doesn’t have daily tasks. Say he attends a one-hour weekly review meeting, then gives an hour of specific guidance after the meeting. That’s 2 hours a week, or 8 hours a month. Can you say, “Well then, $19 x 8 = $150, please”?

If that’s what you were planning to say, brace yourself for a hard time hiring. Anyone with a reasonable amount of experience will instantly sense that “$150 won’t get him actively engaged.” You need to offer something a bit sweeter. That will likely land the offer somewhere around $230-$380, which for him, at that nominal $19/hour rate, effectively bumps his hourly rate up to $27-$46.

As offers like this stack up, this person’s monthly income ends up exceeding $3,800. (Since portfolio workers’ income is unstable, there’s not much point measuring a peak instantaneous rate — but that’s a separate issue.) So for people accustomed to working this way, most full-time offers just don’t look attractive.

I remember someone who had been CTO at a company through its IPO and now makes a living as a consultant once telling me, “Anyone with reasonably serious chops will always break through the $75/hour wall.”

Applying the earlier calculation, an hourly rate of $75 means a monthly income of about $15,000. That’s an annual income of about $180,000. And people at this level typically go independent and set up their own business, for tax reasons. Converting that back into conventional-employment terms, generously, it might be equivalent to something like $230,000 a year.

Poaching someone who’s reached this point into a full-time role is a very tall order.

“No matter how much my salary drops, I’ll take fulfilling work over money” is something you hear often. It’s not a rare story, nor is it some moving anecdote. It’s a common one. People live to be happy, not to make money, so this is entirely natural.

Using the appeal of capital gains — equity, stock options, and so on — is also common. This works too. People with sufficiently high income have savings. Having savings means they can go a year or two with no income and not be in trouble. What such people typically consider next is capital gains. This often aligns well with what companies need, but of course it also means your company’s growth prospects will be scrutinized with a critical eye.

And then there’s the least challenging, safest option of all: “have them get involved in a non-full-time capacity.” It’s very simple, but if you approach the conversation this way, it’s hard to imagine being turned down outright from the start, and in pretty much any case you should be able to at least get to the point of discussing the specifics of terms. Even if, in the end, the terms don’t line up (say, twice a week works but three times a week doesn’t right now) and things don’t come together immediately, having once discussed the details means the other person now understands your business and your terms. At some later point, they might reach out themselves: “About that thing we talked about — do you still need help?”

Some people occasionally take the enviable option of “I’ll pay whatever it takes for the talent I want!” In Silicon Valley, I once heard a story like, “So-and-so, who just raised a seed round the other day, poached a superstar engineer from Google with a $500,000 salary!” But after that, I never heard that startup’s name again.

The content of this post is an excerpt (original text) from the following book. If you’re interested, please pick up a copy.

The Shape of a Happy IoT Startup

The Shape of a Happy IoT Startup

Originally published in Japanese at https://clazytech.com/2022/09/1186/. Translated with LLM assistance and reviewed before publication.