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04
People & Culture
Employee value proposition is going through a reality check and there is a mismatch in expectations on reasons why to work in a startup.
In a tightening cycle, it becomes more challenging to manage talent and culture
STARTUPS CONTEXT
2010 - 2017
Startups are for risk takers
• Lower salaries and benefits
• Chance of equity upside
• Flexible work models already a possibility
2018 - 2021
The equity dream
• Competitive compensation (fixed and variable)
• Unicorn boom
• Appeal at an all-time high
2022 - Today
Reality check
• Lower short-term equity return
• Layoffs
• Incumbents catching up on work model flexibility and benefits
Source: McKinsey LatAm Startup Study (2023)
Source: McKinsey LatAm Startup Study (2023)
Although startups are still appealing to STEM students, tech and product roles are major challenges
Value proposition for the new generation is still appealing. In 2023, 86% of STEM students consider working in a startup in the next two years, vs 87% in 2022.
Roles/areas harder to hire and retain
% of respondents that indicated each of the following options
Source: McKinsey LatAm Startup Study (2023)
There is a challenging scenario ahead to retain talent
Top reasons for employees to seek a new job
% respondents that indicated each one of the options
Source: McKinsey LatAm Startup Study (2023)
There is a mismatch between founder, employee and student opinions on reason why to work in a startup
Main reasons to work in a startup
% respondents that indicated each one of the options
1. Founders and C-levels were asked "Why do you think people come to work for your company?”
2. Startup employees were asked "What motivated you to work on a startup?”
3. Students who showed interest in working in a startup were asked "Why would you like to work at a Startup?“
Source: McKinsey LatAm Startup Study (2023)
In this challenging moment, strengthening culture's essentials is a top priority for founders
Top priorities in People & Culture
% respondents that indicated each one of the options
Source: McKinsey LatAm Startup Study (2023)
