Revenue is not the biggest concern for Canadian tech startups, according to a report by PwC. For the first time, managing talent is the biggest issue (26 per cent) for the 150 CEOs surveyed, compared to revenue (25 per cent) and funding (18 per cent).
Compensation was said to be the cause of most voluntary turnover (26 per cent), followed by a lack of new challenges (23 per cent).
Nearly one-half of involuntary turnover involved underdeveloped or under-skilled talent — poor performance (41 per cent) and poor skills fit (13 per cent) were most often cited as the reasons why CEOs let staff go.
"On the one hand, you could say that Canadian startups need to do a better job of finding and keeping the right people with the right skills. However, it's disconcerting that the current talent pool may actually lack the skills, knowledge or experience needed by today's tech companies," said Peter Matutat, PwC's national emerging company practice leader.
Nearly two-thirds of respondents said over the past two years it has become more difficult to find the programmers and technical personnel they need. CEOs also say the well-established "brain drain" of Canadian talent to United States companies continues to hurt their businesses.
The smaller size of startups gives employees a bigger chance to make an impact but only if CEOs can capitalize on it, said Matutat.
"CEOs should create a working environment where their team has a sense of ownership, the opportunity to be creative, and they are recognized and rewarded for being a part of the company's success."
Non-existent or ineffective total compensation packages are also a part of the problem — only 29 per cent of the CEOs said they had a total rewards program in place. Forty-two per cent said that while they had one, they were not sure how effective it was.
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