During last year’s Internet boom, the number of technical positions was expanding to unfathomable proportions, and technical employees were leaving the “big-company dinosaurs” in droves to strike it rich in the Internet gold rush. Now that reality has set in, the “dinosaurs” have evolved into tigers and many Internet companies have become lame gazelles. If you’re one of the tigers, there are certain things to focus on when recruiting. If you’re a surviving gazelle, your message has to change from last year if you want new technical employees to join your herd.
Recruiting from an Internet company
Although hiring staff members away from dot coms is not yet the equivalent of “shooting fish in a barrel,” companies with established revenues and good benefits are in the same enviable position today that option-rich start-ups were last year. Today’s tigers need to promote only three basic principles to recruit technical employees successfully.
The first is stability. Companies with proven products, proven markets, and a solid employment history with long-term employees will find it easy to entice disenfranchised dot-com refugees. The second, surprisingly, is not pay, but benefits. The remaining Internet companies will make adjustments in salaries to match their corporate counterparts, but standard benefits, such as 401(k)s, are starting to look more appealing. Now that it’s clear that their once-vaunted options will not make them millionaires quickly, most employees returning to corporate America are focused on building their wealth the old-fashioned way, and they need to make sure there’s an effective vehicle to do so. Finally, don’t ignore the need to create opportunities for people to “think small“—in project teams, product groups, or other forums. These opportunities will be necessary to minimize a former dot commer’s fear of being “lost in the crowd.”
Recruiting from a big company
Although certainly a more difficult task than in the past, recruiting people away from a big company (or getting them to stay with you) isn’t impossible. The first thing you have to do is stop thinking like a dot com and start thinking like a young, innovative company that’s in for the long haul. The best way to accomplish this quickly is to remove the stigma of the “stock option.”
If you’re talking to a new employee, don’t even mention stock options unless you have a way to turn them into compensation without going public. To retain existing employees, set a minimum value at which you will repurchase stock options once they vest—as long as people are still employed when they vest. It’s the best way to get dedicated employees to look at the options as having some value. It’s likely that as a small company, you can attract or retain employees by focusing on quality of life issues such as office location, dress code, and flexible hours. And, given that you’re focused on building a business on cutting-edge technology and new markets, you should accentuate career development opportunities; e.g., the ability to develop project management skills by leading projects—an opportunity that may not come up very quickly as a new employee for a larger company.
Fundamentals for retaining technical employees
Regardless of the market or technical trends, some things are absolute when you consider how to treat technical employees. Unfortunately, in bad times, managers and senior executives tend to do the exact opposite of what they should do. Keep these tips in mind when considering how to retain your top-notch technical talent:
- Give more information rather than less about the company’s financial status.
The majority of technical employees will think it’s worse than it actually is anyway. The best way to handle any discussions about the company’s financial health is to be open and honest with whatever information you have. Many of the dot commers you recruit will have been laid off without any warning from management. In fact, in what most consider an unscrupulous tactic, the terminations happened after hearing nothing but rosy forecasts for weeks before the end. Most admit that they knew from looking around them and from office chatter what was going on and would have stayed until the end anyway.
- Always give technical employees a chance to increase their skill set.
The one constant for any technical employee is a desire to keep skills and knowledge current. The counterargument given most often by senior management is, “If we train them, then they will leave for higher-paying jobs.” My experience suggests that if you don’t train them, their exits are virtually guaranteed. And don’t assume that technical employees only care about increasing their technical skill sets. Most technical employees with five or more years of experience recognize that their next career moves will be based more on their “soft skills” than their technical skills. Give them opportunities for formal training in project management, leadership, financial accounting, budgeting, forecasting, team building, and other complementary disciplines. You can minimize your delivery cost and maximize productive work time by making the training available through an e-learning platform. Just make sure employees are rewarded as handsomely (through bonuses, salary increases, or position changes) for improving soft skills as they are for hard skills.
- Employ the time-honored Tom Peters MBWA principle.
Whether they will admit it or not, most technical employees care what the CIO or other senior technical members think about their work. Taking 30 minutes a day to “manage by walking around” could be the single most important investment you can make toward employee retention. It’s important to be visible in times of celebration and in times of crisis. It’s not necessary to chat with technical employees about their home life, but it’s critical that you point out contributions they’ve made to a new project or just spend time dealing with a technical or project management crisis in a room full of employees and managers together rather than taking all of those discussions “offline” in the privacy of the executive office. The more connected technical employees are to the senior management of their organization, the more they feel they can influence decisions that affect them. That’s one of the main reasons many talented technical minds left for the lure of the dot com in the first place.
How is the economy affecting recruiting at your company?
Are you getting more resumes than you were this time last year? Is the quality of job applicants better, worse, or the same? Share your recruiting experiences with us in an e-mail.