State of the startup and scaleup hiring markets – as seen by recruiters
More startups and scaleups are hiring engineers and engineering leaders. Advice for tech professionals on how to get noticed by specialist recruitment companies – from two specialist recruiters
Last week, we looked into data from global hiring agency Indeed that found software development job listings are at a five-year low. To check how representative (or not) these numbers are of the tech jobs market, I pinged some tech recruiters. The response was not what I expected:
“I can only talk about our own niche from seed-stage to Series C engineering recruitment, but we’ve never had so many positions to fill as in 2024.” – Asher Hoffman, cofounder of Coastal Recruiting
“In 2024, every month was a step up in the number of job searches we did for CTO, VP of engineering, director of engineering and product leadership positions. It just kept going up. 2024 was our second-best year ever for the number of searches done: only 2021 was better, and that was an incredible year; the peak of the job market.” – Glenn Murphy, managing partner at Riviera Partners
These data points stick out and I was eager to learn more; after all, they’re bucking the trend in Indeed’s figures, with rising demand for tech professionals! I met Asher and Glenn to get their perspectives, and they also offered some tactics for engineers and engineering leaders to use when seeking new opportunities. Today, we cover:
What are boutique recruiters? Also, the differences between contingent and retained ones.
Hiring by tech stack at early-stage startups. Fifty percent of hires are backend, 25% fullstack, 10-15% AI/ML, and 5% are frontend. A big surprise is virtually no demand for native mobile developers, or for the .NET and Java tech stacks. Also, very few mentions of Angular or Vue.
More demand than before at Coastal and Riviera. Both recruitment businesses are seeing more engineering jobs to be filled coming their way.
Changes across the market. More money and demand from early-stage VC-funded startups, and private equity becoming more dominant in driving demand for engineering executive hiring.
Startups want ‘cracked’ engineers. These are professionals with a track record of ownership, curiosity, and the ability to “grind.” Length of experience doesn't matter after around the 2-year point.
Demand for engineering leadership positions. Data indicates that large parts of the job market are struggling more than the senior role segment, with director of engineering roles hardest to fill.
What search processes look like. Recruitment experts explain how a typical software engineer search and engineering executive search plays out.
For updates on how these two recruiters see the market, follow Asher Hoffman and Glenn Murphy on LinkedIn.
A quick programming note: there will be no The Pulse on Thursday — I’m taking a short winter break. More details in my publishing schedule.
1. What are boutique recruiters?
Coastal Recruiting and Riviera Partners are specialized recruitment agencies; also known as "boutique search”, “contingent”, “retained”, or “executive” recruiters.
“Boutique” and “specialized” refer to recruiters which focus on a niche within tech, such as:
Software engineer and AI+ML engineer hiring for early-stage startups (Coastal Recruitment)
Director-and-above engineering leadership, and product/design leadership for scaleups and larger companies (Riviera Partners)
Executive recruitment is a subset of boutique recruitment. These companies recruit for executive roles like director of engineering, VP of engineering, head of engineering, CTO roles, etc. In the US, high-profile firms can charge $100K or more to recruit a key position like CTO for a late-stage scaleup.
Executive recruitment firms can also focus on individual contributor (IC) roles. Glenn Murphy advises that this usually happens only in the US at their firm, and comes with tradeoffs. For example, the cost becomes justifiable only when the vacancy’s comp package is several times higher than the search cost; usually $500K and above. It is this niche area in which an expert executive recruiter can make the most impact by finding truly standout candidates.
Within the boutique search sector, there are two main types of recruiter:
Contingent recruiters
These companies work on a “no hire, no fee” basis, and only get paid for successfully filling a position; usually 10-40% of the role’s first-year salary. This service is an easy sell; it’s low risk financially for an employer to work with a contingent recruiter due to no-hire-no-fee. Contingent recruiters also often have more clients than retained ones do.
Coastal Recruiting mostly does contingent recruitment, with a couple of retained contracts. This company specializes in hiring software engineers from the first hire to engineer number 20 to 30 at early-stage startups. In 2024 they worked with around 100 different startups.
Retained recruiters
Most executive recruitment companies operate a retainer model and charge upfront, regardless of whether a hire is made. Payment comes in a fixed number of instalments, perhaps in this order:
Initial retainer: the first third of the fee, paid at the start.
Progress retainer: second payment, usually tied to milestones being hit, such as:
Presenting a shortlist of qualified candidates who are ready to engage
Completing screening interviews and drawing up a interview shortlist of preferred candidates
Final interviews scheduled or completed
Final payment: upon successful placement. Depending on the agreement, there may be no payment if a candidate isn’t hired
A search company may also be paid monthly while conducting a search. Total retainer fees are usually 25-50% of the value of the successful candidate’s comp, which increases the more challenging the search is. For example, it’s challenging to find a new CTO for a 300-person scaleup growing at a 10x pace, who is hands-on, has worked with AI / machine learning (ML) before, and who has experience at a hypergrowth company, and also in Big Tech. There aren’t too many people who fit this profile, and not many of them may be interested in switching jobs.
Guarantee periods can also be an important part of retained searches, under which a portion of the fee may be refunded should a successful candidate quits shortly afterwards.
Retained recruiters are a lot more expensive than contingent ones, and are the go-to choice for executive recruitment where vacancies may not even be publicly listed by an employer.
Riviera Partners is one of the best-known executive recruiter companies. They hire for director+ roles in engineering, product and design. In our deepdive Finding the next company to work at, they were the most recommended exec recruiter firm by engineering leaders.
Seed-stage and early-stage startups typically only use executive recruiters to hire for VP-and-above positions which report to the CEO. Later-stage startups also hire for director positions, and may pay for a search for senior-and-above hires and ICs. However, the cost means this is rare, happens mainly in the US, and by funded scaleups with very specific needs.
Given this process can be so expensive, it may not be immediately obvious what the upside is. Glenn explains:
“We have 21 years worth of data and information on who has been successful, people’s interests and nuance that isn’t available on a LinkedIn profile.
We save companies a lot of time, in the end. This is due to the insights we have and our reach across the USA and Europe. We know what’s needed at Series A, all the way through to which profiles tend to succeed at publicly traded companies. We also have the know-how on how to interview people to assess if they’re up for the challenge.”
Riviera’s pricing is atypical, compared to many other retained recruiters. Glenn shares:
“We have time-based milestones as opposed to shortlists or incentives, which can be adjusted sometimes. However, for the most part, the fee is fully paid within 90 days.”
2. Hiring by tech stack at early-stage startups
At Coastal Recruiting, Asher hires early engineering teams at early-stage startups: from seed-stage startups to Series B and Series C companies. They work with some of the largest US VC investors (like a16z, Y Combinator, Sequoia, Index, Lightspeed, Founders Fund and others).
Types of engineers and tech stack
Asher sees the hiring demand split like this:
‘50% of hires we make are backend engineers. I don’t think this will always be the case for startup engineering. The first 3 hires for a company with technical cofounders are almost always backend engineers. It’s a bonus if they have some frontend skills, but I’d peg it at 80% backend, 20% frontend.
‘For backend tech stacks, these are the languages founders use, which candidates would be expected to pick up quickly. By popularity:
Typescript: easily the most common.
Python: surprisingly popular, usually with another language like Typescript or Go. I assume it’s because so much AI and ML work can be done with it, and it’s a generally useful language
Go: This has gotten somewhat more popular, over time
Rust: especially popular with crypto companies. About 15% of our portfolio is crypto, and Rust is very popular. We’re on the lookout for people with hands-on experience in Rust
Ruby: Out of around 100 clients in the past year, only 2 used Ruby; both of them are pretty big names. They told us “find us anyone who has touched Ruby or Ruby on Rails, and is good.”
Few to no mentions:
Flutter: we’ve gotten a single Flutter role in the past year
Elixir: once in a while, we have a startup that uses this and needs folks with experience with it. But it’s less common than Ruby.
Java / Scala: we don’t get any requests for this stack, at all. However, if someone has Java or Scala experience, and is open to working in Python, we usually move forward with them
C# / .NET: we’ve only come across a single hardware company asking for this in several years.
PHP: almost zero PHP these days
Haskell: it’s been a couple years since any company asked for this.
‘25% percent are fullstack. These roles almost exclusively employ the following technologies:
React for the frontend. React frameworks like Next or React Router are usually relevant. Overall, 95% of framework mentions are for React.
Typescript as the programming language. Of course, JavaScript is a given
Node as the backend framework
Python is often mentioned
React Native is by far the most popular mobile technology we see, often requested by mobile-first startups that build their app with it.
Angular / Vue: a combined 5% or less.
‘AI and ML is 10-15%,” says Asher. “This hire is almost always one of the first 10, and doesn’t need to be an “in-depth” ML specialist. They usually fit this profile:
Backend generalist
Has worked in an ML or AI-driven company
Is deep into what is going on in AI and how to use LLMs, practically
Hacked AI side-projects themselves. They probably hack on the side, and might use things like LangChain, LangGraph, and other popular LLM tools to play around with.
‘Someone we recently hired for such a role had worked for a year as an AI/ML engineer, not an in-depth, “research-caliber” ML candidate.
‘As startups grow and mature, eventually they tend to hire more in-depth ML and AI people. However, early-stage companies look for builders who can use AI tools effectively.
‘5% are frontend engineers. Almost universally, the seventh or eighth hire at a startup is the first frontend engineer. The reason almost always is – and I kid you not! – that the founder is fed up with owning the frontend themself, and is ready to bring in a frontend specialist.
‘Ironically, this role is one of the hardest to fill because technical founders whom we work with typically expect two things:
Be a great frontend person – this is easier to find
Be great at computer science basics – such as algorithms and CS fundamentals. This is why most people who pass #1 get rejected!
‘Another reason this role is so hard to fill is that the founder often looks for a staff-level frontend engineer. This person might be the first frontend hire, but they ideally want someone who will head up the frontend team, as it grows. It’s difficult to convince people with staff-plus frontend jobs at stable companies and who head up teams, to come and join an early-stage startup where they would be the only frontend person – at least at first!
‘The best startups are embracing AI – and look for devs who do the same. AI coding tools like Cursor and GitHub Copilot are used by all the best startups we recruit for. Founders at these startups often mention that mastering these tools can 10x the productivity of their engineers with faster iteration and the ability to parallelize work.
‘We don’t see demand for native mobile engineers at all; only React Native. We work with a few “mobile-first” startups who have built impressive mobile apps. All use React Native and look to hire for such experience.
‘I would assume native hires might become more important after the Series B or Series C rounds. In the early-stage in the US, they are absent – or at least, we see no such demand.’
Startups don’t care that much if you’ve used their exact stack before. Asher told me:
“I hear over and over again, that a great engineer is a great engineer - and if you don't have experience in the companies current stack - as a talented engineer, you shouldn't have much trouble picking it up quickly. Thus - if your stack doesn't align perfectly with the above most used, it's okay - you can still get the role!”
3. More demand than before at Coastal and Riviera
Both recruitment companies are seeing record, or near-record business in terms of the number of searches executed.
More demand from early-stage, VC-funded startups. Asher says:
“In my niche, I’m seeing more hiring than in recent memory.
I'm seeing many “cracked” engineers with 5+ offers on-hand, and well-funded startups forced to compete by upping their offers to hire the best of the best. I’m seeing higher total comp packages in the early stage space than ever.”
As we’ll detail below, “cracked” refers to someone with a track record of ownership, who displays curiosity and the ability to grind when needed.
Asher: “It feels like this is a great time for many folks to leave Big Tech and take a gamble – but not too big a pay cut. Big Tech has done many layoffs and the startups I work with offer similar pay, with a massive equity upside.
The risks an engineer used to have to take when joining a startup are shrinking in this new market. Well-funded startups are meeting engineers with competitive salaries, health and wellness, and equity. Also, founders are being much more upfront with recruits about their ARR (annual recurring revenue) and progress towards PMF (product-market-fit) than before.
A disclaimer: I recruit in just the VC-funded, early-stage start-up space, with startups founded by technical founders and backed by well-known VC firms. These are companies that have the money to hire, and a bold vision to build a billion-dollar company. It’s a narrow view of the market.”
Will more companies increase recruitment? At Riviera partners, Glenn Murphy does engineering leadership searches for startups and scaleups. He shares:
“We signed up 58% more searches in 2024 than in 2023 for the US. In Europe, the growth was 61%. The most common search assignment in both continents was for VP Engineering. It feels to me this alone signals a return to a focus on growing teams, as VPs of engineering are hired in preparation to scale up the team’s headcount.”
4. Changes across the market
I asked both Asher and Glenn what changes have been surprising in their part of the tech hiring market.