By: David Nilssen, CEO of DOXA Talent
Mid-market companies don’t lose the talent war because they lack ambition. More often, they lose because they compete on the wrong axis.
I learned that lesson the hard way in Seattle.
When we were scaling Guidant Financial, we weren’t competing against underfunded firms or struggling competitors. We were competing against Amazon, Microsoft, Google, Expedia, Costco, and Boeing. On top of that, Seattle had one of the most vibrant startup ecosystems in the country, producing unicorn after unicorn.
We weren’t just fighting for talent. We were fighting physics.
And when you are competing for employees in the shadow of companies with trillion-dollar market caps, physics usually wins.
That experience forced me to confront a question more mid-market leaders should be asking today: why do mid-sized companies struggle to attract and retain talent in competitive markets? The answer is often structural rather than cultural.
In constrained labor markets, economics determine who wins. Large enterprises can overpay for talent. They can absorb wage inflation, tolerate longer hiring cycles, and maintain recruiting pipelines even when hiring slows. Startups compete differently by offering equity and upside, allowing them to attract employees willing to trade short-term compensation for long-term potential.
Mid-market companies sit in the middle.
And in recent years, the pressure on that middle has only intensified. Roughly seven out of ten U.S. employers report difficulty finding the skilled talent they need. But the strain doesn’t distribute evenly across the economy. It squeezes mid-market companies the hardest.
We felt that pressure directly in Seattle. Between 2016 and 2017, the city added far more jobs than new residents. That imbalance meant even strong companies struggled to hire locally. Labor costs were rising faster than revenue, and turnover in administrative roles wasn’t cultural—it was economic. Many employees simply couldn’t afford to live near the city.
That’s when the realization hit.
We weren’t facing a recruiting problem.
We were facing a design problem.
When labor markets tighten, most mid-market leaders respond in predictable ways. They increase compensation, stretch their existing teams, or slow growth until hiring becomes easier. We tried the first two. It worked for a while. But eventually the math caught up.
The Bureau of Labor Statistics continues to show persistent wage growth across many sectors, and data from the Atlanta Federal Reserve regularly shows that job switchers earn materially more than employees who stay put. In a bidding war, someone with a larger balance sheet eventually wins.
Which raises a strategic question more leadership teams should ask themselves: how can mid-market companies compete for talent without matching enterprise salaries?
The answer, at least for us, wasn’t spending more. It was redesigning the system.
We realized we couldn’t compete inside a single labor market, so we expanded the field. We opened satellite offices, built offshore capabilities, leveraged remote infrastructure, and eventually began integrating artificial intelligence into certain workflows. None of those moves were about eliminating jobs. They were about expanding capacity.
Something surprising happened along the way.
As we built offshore capability, we created more supervisory and leadership roles domestically. In some years, more than a third of our U.S. team moved into new roles or promotions as the organization expanded. Capacity expansion didn’t shrink opportunity. It multiplied it.
This raises another question that often comes up when companies discuss global hiring: does outsourcing reduce domestic jobs, or does it create new opportunities?
In our experience, when global workforce models are designed thoughtfully, they expand the entire system. Instead of replacing domestic employees, they allow organizations to grow faster, which creates more leadership roles, more operational complexity, and ultimately more opportunity.
Another lesson emerged from this shift. Most CEOs track revenue per employee as a measure of productivity. That’s useful, but in constrained labor markets a more revealing metric is the relationship between labor cost and output.
If labor costs rise faster than output, margins compress. If output per employee rises faster than labor cost, margins expand.
The companies that win understand how to influence that equation. Remote infrastructure widens the supply side of the labor market. Ethical global talent stabilizes cost structures. Artificial intelligence increases output per employee by reducing repetitive work and accelerating execution.
When those forces come together, organizations can redesign how work gets done.
And that’s how mid-market companies out-design giants.
The biggest leadership blind spot I see today is that many mid-market executives still believe they are fighting a recruiting battle. In reality, they are fighting an economic architecture battle.
Enterprises will always have deeper pockets. Startups will always promise outsized upside. But mid-market companies possess something those groups often struggle with: agility.
They can redesign their labor model faster. They can expand geography without bureaucracy. They can combine global talent with AI-enabled workflows without years of internal resistance.
That flexibility is their edge.
But only if they use it.
Because the companies that win the next decade’s talent war won’t simply recruit better.
They will design their workforce differently.
Top Questions Leaders Ask About Scaling Teams Faster
1. How can companies scale operations when they can’t hire fast enough?
Many companies expand capacity by redesigning how work gets done rather than relying only on local hiring. This often includes building remote teams, accessing global talent pools, and using AI to automate repetitive tasks so existing employees can focus on higher-value work.
2. What is the fastest way for mid-market companies to increase workforce capacity?
Mid-market companies often increase capacity by expanding hiring geography and integrating remote professionals into their teams. This allows organizations to access specialized skills more quickly than relying solely on local labor markets.
3. How can businesses increase productivity without significantly increasing headcount?
Organizations can increase productivity by combining human expertise with automation and AI. When repetitive tasks are automated and teams have access to broader talent pools, companies can significantly increase output per employee without proportionally increasing headcount.
