Who Wants To Be A Millionaire? Your Coveted Candidates
By Martha Frase-Blunt© IT Recruiter. April 2000.
It's a rare IT professional who hasn't daydreamed about joining a hot new dot-com company and cashing in a cool million in stock options after the inevitable IPO. That's why these upstart firms are able to siphon off top technical talent with little more than promises in the way of compensation and benefits.
But dot-com fever is fueled by more than money, believes Gary Kaplan, president of executive search consultants Gary Kaplan & Associates in Pasadena, Calif. It has also sprung from the seeds of employee discontent planted by the ruthless corporate mergers and downsizing of the past 20 years. "It used to be there was a certain amount of pride and personal association that tied employees to their companies. But that all changed in the 1980s with the first wave of merger mania, the recession and later, the corporate obsession with shareholder value and profitability. In the most recent years we've seen further 'rightsizing' and more consolidation-and less consideration of human capital."
The current young generation of workers, who might have seen their fathers laid off more than once, have come of professional age in an environment where corporations are not trusted. And now in the upside-down employment market, they are calling the shots. "Their attitude is 'get what you can as fast as you can'," noted Kaplan. And this attitude is further fueled by the pre-IPO companies that promise not fidelity, but the lure of financial riches.
Realistic Expectations
There will always be professionals-especially in the IT industry-who will hop from start-up to start-up for the thrill of the chase and the financial gamble. These folks will never be happy in an established firm, so don't waste your resources on trying to source them, said Kaplan. "The dyed-in-the-wool soldier of fortune can build great wealth going from one organization to another. It gets in the blood." Still, he said, "There are legions of good, creative people out there who are risk averse but who want the opportunity to be change agents and to create something new. These professionals may also be wary of large corporations, which, even in this rosy economy, are still 'rightsizing'. They may wonder, 'is an AT&T really more stable than an Amazon.com?' It's a good question."
To stem the outgoing tide of young talent seeking their dot-com fortunes recruiters must craft powerful recruiting messages, stressing the cutting-edge opportunities at their own firms, as well as the stability and infrastructure that underpin the enterprise. These ideas might particularly resonate with those drawn to dot-coms for the promise of the million-dollar payoff, rather than the thrill of the adventure. On closer inspection, that start-up might not look so attractive once the downsides and true risks are factored in.
According to John Sullivan, chief talent officer at Agilent Technologies and head of the HR management program at San Francisco State University, "The failure rate is frequently well over 50 percent at start-ups." In addition, "The equipment you'll have will likely be basic-you're more likely to sit on a three-legged chair than at an executive desk. There will be no infrastructure like IT or HR to help you in any way."
But while these cautionary tales might be true, they don't make for a compelling recruitment message. Lou Adler, author of Hire With Your Head and president and founder of POWERHiring.com, noted that people respond to opportunities based on three fundamental drivers: the quality of the manager, the quality of the company and the quality of the job itself. Companies that can't dazzle a candidate with stock options and the promise of early retirement have to work doubly hard to get across the excitement, challenges and intangible rewards they can offer.
In promoting a position, "Take what makes a great day at the office, and put it into words," advised Adler. "A good day for many technical pros is pushing the envelope, working as part of a well-oiled team, learning bankable skills and being totally caught up in the work. Your advertising of the position should focus on what they will do, and what they can become."
These might be the same messages a start-up can proffer, but an established company can tack on a bonus: Employees can have this, plus a work/life balance. This message will resonate powerfully with a good-sized slice of the workforce.
Emphasize Work/Life Balance
At start-ups, "you work very hard," said Kaplan. "There's not much depth. They are paper-thin in terms of hierarchy, so there's no one to delegate to. You'll give up a chunk of your life." Conversely, today's young IT professional "is into quality of life. They want to have flexible work environments so they can spend more time with family and friends, and pursue their outside activities. That's simply not compatible with dot-com life."
One advantage established companies have is that they can offer some of the luxuries of flextime and telecommuting, established benefit programs and fully vested retirement plans. In addition, employees can take advantage of professional development and training-one of the most valuable benefits to IT workers.
Don't Count On Compensation
When a candidate is leaning toward a start-up opportunity, companies shouldn't assume that offering a comparably rich package will change their minds. In fact, overpaying IT talent in an effort to compete against start-ups is a bad idea all around, said Kaplan. "Start-ups with lots of venture capital in their pockets will do whatever it takes to hire talent, giving away a lot of unique benefits and prerequisites and stock options. But larger, established companies have for so many years operated by certain guidelines, procedures and policies, and they can't turn on a dime-nor should they. If a firm has a compensation program that it's been using for a long while, and it has brought people in for years under this scheme, how can you maintain parity when you change the rules for hot young IT professionals?"
It's fiscally impossible for most companies to create compensation fairness among all its IT staff when hiring new people at inflated wages. Your existing staff will simply leave, knowing they'll be better off as a new hire somewhere else. "You will have created a revolving door," asserted Kaplan.
Burnout Bonanza
One of the positive byproducts of the dot-com revolution-at least for older companies-is that recruiters can source and hire those IT professionals who are tired of the hype and are ready to slow down and enjoy the benefits of an established employer. So don't overlook failing start-ups when sourcing passive candidates. "Most recruiters are cognizant of what's going on out there with new companies, and will look at failed IPOs as fertile ground for poaching," said Kaplan. "Those professionals who took a chance because they got caught up in the hype might not want to relive that, and will be receptive to your messages of stability."
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Nine Reasons To Pass On That Dot-Com Job
Kaplan cautions that when warning a candidate against a start-up opportunity, "You have to talk straight with them. You can't dress it up. People are either inclined to roll the dice, or they're not." But to tip the scales for those candidates you perceive to be weighing the pros and cons, here are some messages companies can build into their recruiting pitch:
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