2 Ways to Retain Talent After The Vesting Period
- Posted: 06.09.21
The best developers are people who love to build, create and are always looking for the next big mountain to climb.
I think you’ll agree:
An engaged developer is much more likely to stay with your company and become an advocate for the product/service you’re building…
…but what happens when V1 of the protocol or service has been delivered?
It’s often the case that there will only be incremental updates after the main protocol has been delivered. The big task has been completed, and it’s just a case of optimising and improving UX/UI.
When this happens, developers and engineers can lose motivation. They’re always wanting to tackle the next big obstacle, not just improve on what they’ve already created.
We’ve worked with hundreds of Blockchain and Crypto companies since our inception in 2017, and they’re all well aware that this loss of inspiration is a very real possibility; some have detailed strategies to keep developers and engineers engaged, others believe that the vision of the company is enough to keep people.
For this article we spoke to companies like Swarm Markets, Dialectic AG & Dapper Labs and we found that:
There is a pretty common way to encourage employees to stay with the company for a set amount of time though:
Vesting periods.
They are a great way to encourage people to stay at the company and help it be as successful as possible…
…but how do you keep people past the end of their vesting period?
Today you’ll find out from both companies and employees how you can keep the spark alive past a vesting period.
Here we go:
Identifying motivators from the start is essential
Here’s a simple question you can ask yourself to determine whether somebody will stay with the company past their vesting period:
“Do they believe in the project, and are they excited about it?”
This simple yet important factor will often influence somebodies decision to stay or leave past the vesting period. If they truly believe what they’re building will change the world for the better, chances are they’re going to continue to work on it.
But the reality is:
Motivations for people change (whether that’s due to internal or external factors). One smart contract developer outlined how their motivators change as a project grows:
“I think they [motivations] change because as you complete tasks and they are (hopefully) received well, you’re more likely to stay there and happily continue to do your job because you know it’s being appreciated by the company.
If the project is just chugging along though and all the instructions are coming from the top-down (build this, do this, fix this etc), eventually the things you want to do won’t get done, and your motivations will change. You start questioning if you’re just there for the money and maybe start exploring other options.”
A lot of developers thrive off of big challenges, and if there simply aren’t many big challenges to complete anymore, then perhaps they’ll look elsewhere for those meaningful tasks.
Alessandro Buser, Lead Blockchain Engineer at Dialectic AG shared his view on people believing in the project:
“I think it depends on the people and the project; if you’re just doing the project for the tokens, then sure people may leave once the tokens are distributed. Ideally, you hire people that are in it for the long-term and are actually excited about the project. In that case, I wouldn’t think that people leave after the launch.”
The question then becomes…
…how do you truly know if somebody is excited by the project?
Good developers in the Blockchain, Crypto and DeFi space are ALWAYS in high demand and they have no shortage of employment options at their fingertips. So keeping them excited about your project is crucial.
Jerome Pimmel, Engineering Manager at Dapper Labs spoke to us on his thought process:
“Our people get about 10 outreach messages every day from companies looking for smart contract engineers, but when they’re already working for a company whose mission is big, ambitious and multi-year, you get people believing in it, and your retention rate will be higher.
We do stay on top of it, but we don’t see it as a critical risk for the company at this stage, because of the brand that’s been built. I think that’s the key thing, if you build a good internal brand and build a strong team (and your business has incredibly positive potential for the future), that’s your natural retainer for people to prevent people from moving on.”
There’s really no way you can fake this as a company in the long run.
Either somebody believes in the company vision and they want to continue to build it, or they’ll see out the vesting period and start to look at other opportunities.
And that second scenario leads me to a whole other set of questioning:
What is the objective of a vesting period?
At the very base level, a vesting period gives an employee another reason to want the company to succeed, a sense of ownership and a financial reason not to leave the company (within the vesting period).
Vesting is also used in token allocation to stop everybody selling at once and crashing the price.
So if somebody was to see out the vesting period, sell their tokens and then look for another role…surely the vesting period has had the desired impact?
It’s motivated that person to stay with the company for X amount of years and ensured tokens don’t get sold right away.
I guess the real question here is:
How important is token allocation to developers when they’re considering employment opportunities?
We spoke to one smart contract developer who gave us some interesting insight:
“It’s important to know that you have some stake in it. To me, the allocation doesn’t matter as much as the relative allocation in respect to other people. If you’re getting x amount, you want to see that fairly distributed compared a person who came in after you, or is in a lower position. You want to see the output you’re giving having an equal return for you.”
This line of thinking is often observed in companies: People want to be fairly represented for their output. Whether that be the salary, benefits or token allocation.
Philipp Pieper, Co-Founder at Swarm Markets verbalised the unique situation a lot Blockchain and Crypto companies find themselves in:
“The summer of Defi has seen the emergency of this category of Blockchain technology thrown into public consciousness. Finding developers and reliable engineers has never been so important, especially as platforms start to increasingly work within regulatory frameworks and parameters.
When ‘payment’ becomes less relevant, ‘purpose’ moves into focus. Talent engages in projects they believe in and where they see their abilities best leveraged to have the highest impact. The industry is evolving to think more long term and projects need employees who share in their vision. Therefore, employment packages must evolve to include a combination of attractive salary, equity, perks, but equally attractive use cases based on interesting technologies, if they are to attract top talent.
Packages for engineers in the blockchain world will evolve to mirror those typically enjoyed in tech roles within traditional financial services.”
So as DeFi (and Blockchain) in general becomes more and more popular, the differentiating factor becomes less about money, and more about the purpose of the company.
Which is something we’ve already touched earlier in the article.
Continuous innovation motivates developers and engineers
This should come as no surprise, but people will often leave companies when they feel their role has stagnated.
A smart contract developer we spoke to echoed this statement:
“I guess if the company is willing to treat every new release as a blank slate in which to innovate, to me, that’s motivating because it feels like you’re in a start-up and you’re tackling new problems.
If the company just makes incremental changes all the time, then it can get a little boring because you’ve solved all the hard problems already, and now you’re just trying to tick off all the easy problems.”
This lines up nicely when we spoke about the best developers always wanting to be challenged and pushed to produce their best work.
Motivating talent to stay at a company past the vesting period was a topic we were really interested in exploring at our London office.
We have heard time and time again from developers that they’re waiting to see our their vesting period and then they’re going to start looking for new opportunities.
We wanted to see what companies could do to change this and keep people at their company for longer…
…but it seems like the answers we came across were pretty simple.
Firstly, developers LOVE to be challenged and always pushing the boundaries, so if V1 of your service/protocol will be delivered and then only incremental updates after that, you can probably expect to lose a few people.
Although, with that being said:
A clear vision for the company can help attract the people that truly believe in the mission, which will motivate them to stay past the vesting period.
Hannah Brayshaw
Hey! I work with cryptocurrency and DeFi start ups, focusing on building teams in this high growth market. Connect with me directly on LinkedIn to see more content just like this.