Covid-19 Impacts on Hiring

With the Covid-19 pandemic, nearly all tech companies have been forced to quickly adapt to a fully remote workforce, as well as rethink hiring and onboarding practices.

Transitioning into Remote Work

Remote work has taken a long time to take root, even in technology, aside from the occasional “work from home Friday.” Historically, many emerging tech companies were based in Silicon Valley with employees commuting into a centralized campus every day. Technology for remote work as we know it today didn’t exist. Then, newer larger companies (like Google) began to open offices in other locations to increase their talent pool, and in effect re-create the HQ office concept in other cities. As technology advanced, companies began to do this on a startup scale, including some of our earliest portfolio companies, cautiously hiring remote engineers in the same or nearby time zones, keeping in touch over instant messaging, and having those employees come to the main office every few weeks to have face time with their teams. Larger tech companies started hiring entire teams in other countries, utilizing a hybrid model between recreating a smaller version of their main office and having individual remote employees. This progressed even further with some startups going 100% “remote-native” from the start, with the belief that teams don’t need to be physically together to be successful. Cryptocurrency companies, for the most part, were ahead of the curve, typically with employees scattered across the globe and minimal centralized HQ or offices, and those have been less affected. This approach, however, was the exception and by no means the rule.

Now, with the Covid-19 pandemic, nearly all tech companies have been forced to quickly adapt to a fully remote workforce, as well as rethink hiring and onboarding practices. The first and most obvious hurdle is to ensure all employees have the technical equipment required to complete their work and collaborate effectively while being remote. In addition, companies have to reimagine how to engage in interviewing, hiring, and onboarding new employees. Further, HR and Operations teams also must consider how to ensure their people are getting the support they need in all aspects of their lives, both at work and at home.

Hiring during a Pandemic

A recent article published by Hired, The State of Remote Work, stated 68% of tech employers said they are still actively hiring, and outlined some of the positives and negatives that remote work has had on this process. Some of the main benefits of hiring remote employees include:

  • A more diverse pool of candidates
  • Candidate preference/flexibility
  • Access to a larger volume of top tech talent

The three main areas where companies are currently seeing challenges related to hiring include:

  • Creating a new online hiring process that is both effective and efficient.
    • This necessitates the implementation of new collaboration and communication tools and;
    • Creating onboarding that can share company culture appropriately.
  • Developing compensation structures based on remote geographies and creating appropriate benefits and perks.
    • This includes providing different benefits like better mental health coverage (as opposed to free lunches, gyms, laundry services, discounted commuter tickets, etc.).
    • There is also the potential to have different pay ranges depending on where the employees reside since the cost of living may be less.
  • Training managers to lead their teams to be motivated, efficient and effective; while also exercising empathy for employees who feel isolated/loneliness.
    • This involves creating a disciplined approach to regular meetings and assigning mentors, and;
    • Designing creative spaces for people to meet remotely (ie zoom casual lunches).

In working with our portfolio companies throughout the pandemic, the clear areas of concern for leadership include the hiring process, onboarding, compensation, and communication, which we will discuss in more detail below.

Hiring/Interviewing Process

As the pandemic took hold, many of our portfolio companies acted quickly to create new processes focused on how they can efficiently and effectively conduct interviewing and hiring remotely. Pre-Covid, most companies would conduct a quick phone screen, perhaps do a coding test, then invite the candidate in for a set of interviews. Now, we have seen many of our companies adjust their process to receive enough information about candidates earlier to allow for more flexibility at each step by creating multiple yes/no decision points throughout, as opposed to one final decision at the very end. One company in particular has created an in-depth phone screen which allows for there to be a more candid conversation between the employer and potential candidate. The interviewer will not only ask the necessary technical questions, but they will share more about the process, the culture, and finally, the expectations the company will have of new hires. This forces advanced communication and clarity, which is helpful without in-person interviews where you expect the candidates to simply “get a feel” for it all.

Another one of our companies took a more drastic approach, deciding to briefly slow down recruiting and do a full sprint to completely revamp their entire recruiting process. They are implementing new tools and systems, and reimagining the entire interview flow from start to finish, to create a “contactless” process that will continue to allow them to scale hiring quickly despite having no in-person meetings.

We have encouraged and worked with many in our portfolio to do something similar. We are recommending a clear and flexible hiring process where interviewers take notes in their chosen collaboration tool in real-time, make feedback public to the other interviewers, and have the authority to make decisions quickly. This offers flexibility to interviewers to decide how to best make a hiring decision. For example, do you end the interview if it is not going well, saving your colleagues time? Do you change the interview flow to have specific areas covered at specific points? Do you break the interview process out over multiple days, allowing you (and the candidate) to end the process at any point and facilitating easier scheduling? It requires disciplined note taking and it forces each interviewer to make their own decision independently: do you want to work beside this person?

Further, due to Covid-19 we have learned from several of our founders that they believe this experience has helped them establish a more robust culture (even though dispersed). They have been revisiting their hiring practices and have a better understanding of who they are, who they can become. They are actively engaged in hiring more diverse teams as they no longer have constraints of location. And some have also begun to change their previous requirements – asking themselves if a GPA and specific schooling or experience is actually imperative.


Onboarding is a big concern for many companies for good reason. This is when a new hire is typically introduced to the office and all of the office perks, their workstation, teammates/key people, and of course, they will get an idea about the overall culture. Now, employees working with the new hire must plan to dedicate time, most likely by video, to communicate their scope of work, what the company expectations are, and how to get the answers they might need. We have learned that some companies that expect to return to the office have created VR material to give the immersive experience of what it may be like in the office. This will continue to be an area where we will see new ideas emerge.

Compensation and Benefits

Compensation and benefits will be greatly impacted by remote employees. Previously at large technology companies, it was always the case that lower cost of living and lower competition markets (Atlanta, Austin, Pittsburgh, Denver, etc) commanded lower salaries. So what happens if an engineer working at Twitter HQ in San Francisco decides to move to Albuquerque, New Mexico for personal reasons: should their salary change? Facebook addressed this recently in a video conference with employees. According to a MarketWatch article by Mike Murphy, Mark Zuckerberg said that there will be salary adjustments; specifically “we’ll adjust salary to your location at that point…there’ll be severe ramifications for people who are not honest about this” and said it had to do with tax implications. Income tax and tax withholding are a real issue. Rules are highly variable state to state as to whether or not you have to pay income tax. It can depend on a variety of factors, including how many days you resided in that state, and where your true “domicile” is. If they are not careful, employees could find themselves in a situation where they owe full income tax on their entire salary in two different states. Regardless of the tax issues, we do expect remote working to increase, and with that, there will be many more conversations about salaries v. location.

Due to the pandemic, many “in office” perks are obviously no longer available: free lunches, free gym at the office, shuttles to and from work, company sponsored daycare, etc. What new benefits will we see emerge to take the place of these traditional offerings? Many companies had previously supported bringing dogs into the office, and some are now increasing benefits around pet adoptions and pet insurance based on this article in the Wall Street Journal by Hilary Potkewitz. Another benefit receiving attention is the emotional and mental health of employees, as many are struggling with loneliness and focus. According to Kathryn Mayer in her recent article in Human Resources Executive, “77% of employers surveyed are offering or expanding access to virtual mental health services; 60% are offering new easy-to-implement virtual solutions, like virtual workouts, to support employees who work from home.”

All of this has the potential to have a massive impact in many areas, from dramatically changing cities that were not previously seen as technical hubs, to disrupting companies that were built around supplying corporate perks and benefits.

Communication, Communication, Communication

All of our research has shown that the key to any remote team being successful is communication. NerdWallet VP of Content, Maggie Leung, who has been working with a remote team for a while gave great insights recently during her interview with First Round, Struggling to Thrive as a Large Team Working Remotely. Maggie emphasizes the importance of communicating consistently and avoiding the urge to micro-manage. She recommends creating space for conversations to cultivate the feeling that all are in this together. A few key points she outlined are:

  • “Relationships, a willingness to communicate, and flexibility are huge sources of strength right now. No matter what comes up, teams that nurture those elements have a better shot at figuring things out.
  • You have to anticipate and try to calibrate emotions as much as workload. FOMO, anxiety, and isolation are all things managers must take into consideration if remote teams are going to perform sustainably over months or years.
  • Leaders have a chance to be honest and direct like they never have before. If you can’t bond when things are tough, you’re missing an opportunity.
  • Expect issues to come up and have consistent hygiene for dealing with them. ‘Winging it’ keeps remote teams from working at scale.”

We have been fortunate during this time to see a seismic rise in tech operations and HR teams publicly sharing how their companies are coping with a variety of people-related issues through zoom meetings, talks, podcasts, etc. The seemingly simple inclusion has great implications for the future of sharing best practices.

As we are all painfully aware, this pandemic has impacted all of us. This has been a forcing mechanism for some and a timely opportunity for others to revamp processes, increase the diversity of their candidate pool, widen the geographic candidate funnel, and create a faster, more efficient, and fair process as they build their teams and their cultures.

It will be important going forward for companies to have a foundational structure prepared which creates space for the spectrum of employees who will work completely remotely, fully onsite, or some hybrid of the two. What we have witnessed, and continue to witness, is the resourcefulness, creativity, and resilience of people.

Carrie Farrell Talent Partner
Brad Strader Talent Partner
Additional Reading