The tech talent shortage has become one of the biggest challenges in business technology innovation, as a staggering number of new companies increase their digital transformation efforts. But is the tech talent shortage an unsolvable problem, or is it simply indicating that technical recruiters need to change their strategies?
Clay Kellogg, CEO at Terminal, a global tech recruiting and onboarding platform, recently spoke with CIO Insight about the importance of researching global market talent pools, as well as the necessity of creating remote-first work environments that meet employee needs equitably.
Interview with Clay Kellogg at Terminal
- Terminal and Remote-First Hiring
- The Reality of Tech Talent Shortages
- Finding and Developing Global Talent Markets
- Advice for Companies Hiring Tech Talent
- Hyper-Specialization and Technical Recruitment
- About Clay Kellogg
CIO Insight: Could you tell me more about your background and your journey to becoming CEO at Terminal.io?
Kellogg: I had spent 20+ years building companies, building teams, and I realized that the hardest thing for most companies is to gain access to talent, to actually build teams, to be able to recruit and build those high-caliber teams that are required to build a company. And so I took a lot of the skills that I had in terms of building those teams across the globe.
At Hired, I kept hearing from all of our clients that they needed access to “more,” that we helped them fill one role or two roles and they had 10 more that needed filling. This problem really allowed me to take a more macro lens on what was happening with technical talent and notice that there was a massive imbalance between the number of jobs that were being created that were technical in nature, and the number of engineers that were being educated and graduating from the school system in the United States.
This led me to believe that there had to be a better solution for finding talent outside of the limitation of the borders of this country. And fortunately, I got involved with Atomic, which was a startup studio in San Francisco. They were incubating this idea that ultimately became Terminal, and they approached me and asked me if I would join us as CEO.
CIO Insight: Briefly, what does Terminal do for its clients? How does your specialized platform help to deliver results?
Kellogg: We have two products that we offer, really any growing technology company. The first product that we offer is the Terminal Talent Platform. This is our technology team and process that we’ve developed to really help any company hire full-time, vetted technical talent in the markets that we cover. We currently cover Canada, Mexico, Colombia, and Chile.
And what this means for our clients is if they sign up with Terminal, they immediately have access to talented individuals in these markets. When they review their profiles, they’ll see if they’re vetted by Terminal to be a good remote employee, which means that we’ve assessed their communication skills, and we’ve assessed their work history and their preferences to ensure that they’re going to be a positive addition to the teams. And then our clients are able to interview them and hire.
The second product that we offer is called the Remote Management Platform. This is everything that any company needs to be able to employ full-time talent in a compliant manner in any of the markets that we cover.
So this allows access for our clients who, today, may not have an easy setup in the markets in which we cover, may not have a PEO relationship, or a professional employment organization relationship, and they want access to the best talent. And we believe that the best talent wants to be a full-time employee. With the Remote Management Platform, we can onboard and manage a role and its administration for full-time employees in the market.
So what that means today for our clients, if they use us for both products, is regardless of where they are in the United States, if they are looking to broaden their pool of qualified candidates and they are open to the markets that we cover, it’s usually about seven to eight times larger than the market they would be working with in the United States.
CIO Insight: Many experts are talking about the burgeoning problem of a tech talent shortage now and in the future. Do you think there’s a true tech talent shortage, or do you think that another problem is at the root of the difficulties with tech hiring? What aren’t people talking about in this area that you think is important?
Kellogg: Well, I certainly believe that there is a tech talent shortage worldwide and I think that there’s a combination of factors that led to this. Today there’s just an incredible amount of investment that is going into technology companies, as we’re seeing what we consider old school verticals now sort of decoupled and starting to add technology, which really brings a lot of value in those markets when you have tech talent. Between FinTech and health tech, these are massive industries that are now being kind of reinvented piece by piece and need more engineers to do it.
We also have gone through a radical transition with the pandemic being the exclamation point, putting the digital transformation of so many different industries in full swing. And that just means that there’s so much more need for engineering talent to help an industry that probably wouldn’t have had that need before.
I also think that for a big part of our history, we have had these artificial boundaries that we have set for ourselves as technology companies. We were forcing people to spend hours commuting when there’s no value in them actually being in the office. Those barriers have come down, and I think we’re going to see continued barrier reduction in the future.
We’re going to see that the talent is in the primary seat that gets to dictate the terms, and from our research and our survey from the beginning of the year, over 70% of engineers said that they want the option to stay remote.
“Over 70% of engineers said that they want the option to stay remote.”
Companies are going to have to understand that they are no longer setting the rules; the employees are. If you want to have the best talent, then you need to adhere to what the talent is telling you they want.
So not only are we going to see remote become the default, but we are going to have to think about every aspect of the employee experience from a remote perspective. Things like interviewing need to be optimized for remote employees. Benefits need to be optimized for remote employees. Not to mention all the infrastructure and process development that needs to be reconstructed with remote employees at the center, not the fringe.
[The tech talent shortage] is going to change everything that we think about, in the way that we used to define work. But what’s exciting about that, is that we can use it as an opportunity to really reinvent our companies and reinvent them in a way that is more inclusive and more equitable.
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CIO Insight: What led to the tech talent shortage? Were there signs of this coming shortage that you noticed over the past few years?
Kellogg: There have definitely been signs, even pre-COVID, of the coming tech talent shortage — like the lack of visas that were being approved for immigration into the United States, and the only handful of companies that were benefiting from the process.
There’s always been more demand than what the US can support, but now we’ve removed the need for that immigration. There’s no reason you should be forced to move to the US for your job. And because of that shift away from immigration requirements, we’re seeing a much wider swath of candidates who are open to jobs. But it just feels like it’s one of those environments where every time that you open to another market, more jobs are being created and there’s no way to really catch up with other employers.
“There’s no reason you should be forced to move to the US for your job.”
To combat the tech talent shortage, there are a number of great companies and programs trying to create engineers through short-term boot camps. But what we’ve seen is that the shortage is more in skilled programmers, or those who have a couple of years of experience with a company.
CIO Insight: How did your team go about selecting your global markets for talent sourcing?
Kellogg: So the way that we approach our markets, we start with a pretty extensive analysis, looking at anywhere from 50 to 70 data points for each market that we evaluate. And of course, there are some obvious data points, like the size of the talent pool, how many engineers there are today, the university systems there, and how many engineers they are creating on an annual basis.
But we also look at all of the other elements that are important for an employer in the market. So things like, how stable is the government? What does the infrastructure look like? Is there broadband internet readily available? What are the local labor laws? Do the local laws make IP transfer rights more challenging? Things along those lines.
So every market we go to, we do a full analysis. And then once we’ve gone through that analysis, we create our own entity in the market to be the employer. We go through all the trouble of creating that entity and making sure we’re compliant and making sure that we have everything ready to be able to add engineers on behalf of our clients […] it’s those hidden costs that end up really making it challenging for companies to make long term investments in a market.
And so our goal is to really make sure that we have a look across all of those hidden data points and use that to ensure that it’s a positive experience for all parties.
CIO Insight: What has made Terminal successful in its approach to global and remote recruitment?
Kellogg: We believe developers are in a community and as a participant in that community, we work to bring value into that market. We work closely with the dev community in those markets that we select: we sponsor events, bring in content, and bring in speakers, all so that we can become more well known, but also so that we can learn about the community ourselves.
We’ve also developed our own technology called passive referral technology, which helps our members and engineers at Terminal to help us uncover who could be an interesting person to speak with about opportunities that are coming through our network, and we use that information to do what we consider a full market talent mapping.
That mapping becomes our blueprint for how we are going to build large teams and relationships in these markets, understanding who is really talented, who is a magnet for other talent, and also what universities and companies are doing a good job of training these folks as we go into the market.
Our approach is that everybody wants transparency. They want to understand what’s special about the role and company you’re bringing here, what’s the compensation, who am I working with, what’s the tech stack, and our goal is to make it clear to both sides what makes them special.
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CIO Insight: What are some of the typical challenges you see companies face when they try to recruit global or remote talent?
Kellogg: It’s very easy to say that you are a remote-first company. It’s very easy to take a job position that used to say “San Francisco,” and now replace that with a global or remote label. But what’s really hard is to develop a talent acquisition strategy that’s global in nature. Because of [the passive nature of most candidates’ job searches], you really have to think about how you’re going to enter into a new market, well first, how you are going to choose a market.
“It’s very easy to say that you are a remote-first company … But what’s really hard is to develop a talent acquisition strategy that’s global in nature.”
Where are you going to maximize your chances for success in finding talent, then how do you enter that market? How do you build an employer brand? You need to ensure that you’re going to have the compensation, the infrastructure, and other things to be able to provide a competitive offer. And from there, how are you going to support your team in that market?
CIO Insight: What should onboarding look like for newly hired tech talent? How can strong or weak onboarding strategies affect the success of a new employee with a company?
Kellogg: It is ironic when you think about how much energy we put into finding and recruiting the talent and then, historically, how little energy we put into the actual onboarding and ensuring they get the support they need throughout their journey.
Our belief is that onboarding is as equally important as the actual recruiting process. Onboarding needs to be structured in a way that really encourages new employees, new remote employees, to feel part of the company, feel part of the culture as early as they possibly can, but also understand that there are different needs for remote employees.
“Onboarding needs to be structured in a way that really encourages new employees … to feel part of the company.”
You know, we historically would show up to an office, and there would be our cubicle or our desk setup. Well now, we can do that virtually. We can help you get set up in a home office, we can make sure that you have an ergonomic assessment, we can make sure that your needs are being met, and that we explain the benefits that are unique to your market; we do things for all employees that show we care.
And I think ultimately, that is what all employees want: they want to know that they are valued as an employee and that their contributions are being acknowledged. By having that sort of onboarding process that really is tailored to them in their environment, whether that’s home, or that’s in a co-working environment, or in a different environment, we’re working to make them feel that everybody has equal access to the resources they need.
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CIO Insight: What role does hyper-specialization play in recruiting? Are companies asking workers to specialize themselves out of other roles?
Kellogg: There are definitely some areas that are becoming extremely valuable and highly specialized that could be limiting in the future. What we’re seeing more often than that though are more individuals or candidates not fully knowing the value of their skillset and how to communicate it.
[These candidates,] they have a couple of years of experience with maybe different frameworks or different languages. But they may not understand where the value is, in terms of if I’m a Python engineer, I could be commanding this sort of compensation, versus an Angular engineer. And so that’s where we find that there’s a lot of opportunities for more data transparency to help folks improve their profiles.
But on the specialization front, it does take specialization to do technical recruiting at scale. You can’t take a general recruiter or talent sourcer and have them be successful at scale. Technical recruiters have to be able to understand the language and nuance of the profiles to do a good job, because the low-hanging fruit, obvious candidates are being hit by everybody. The real opportunity is where you uncover folks that may not be getting hit by everybody, and strong, hyper-specialized recruiters can do this well.
Note: This interview has been edited for clarity.
Clay Kellogg is the CEO of Terminal, the leading platform for building and supporting remote engineering teams. Prior to Terminal, Clay was the Chief Revenue Officer at Hired, the online knowledge worker marketplace (acquired by Adecco), and Chartboost, the leading mobile gaming monetization platform (acquired by Zynga).
Clay spent the previous decade in leadership positions in mobile media, mobile advertising, and mobile infrastructure companies such as AdMob (acquired by Google), Google, Autodesk, and Qualcomm.
Clay has an MBA from Harvard Business School and an undergraduate degree in Information Systems and Finance from the Ross School of Business at the University of Michigan. He resides in Mill Valley, CA with his wife and three boys.