and employee retention advice:
Even when Silicon Valley is in a downturn, some reqs continue to be hard to fill. It is our observation that candidates do not move for the same incentives as they did 20 years ago, yet hiring practices seem stuck in the 1980's. Silicon Valley Executives might want to consider the following changes from the employee's point of view:
- Downsizing, while necessary, has resulted in longer hours for everyone, and a substantial increase in burnout. A new position necessitates an enormous time investment and burden.
- Wall Street rewards super fast growth, but higher growth is often poorly managed and chaotic. Stock performance no longer defines a "good" company to work for. Stress levels climb.
- Mergers & Acquisitions are the way companies grow, and sudden takeovers of healthy companies are commonplace. Private companies seem more stable that public corporations.
- Executive and Management turnover is high. It is not unusual for the hiring executive to leave in the first quarter of a new hire's employment. New hires are demanding more in sign-on bonuses.
- It is not unusual for a contributor to see his or her work canceled repeatedly due to budget cuts, change of management, stock price fluctuations, or corporate takeover. Low morale from lack of accomplishment is epidemic.
- The phrase "challenging and dynamic" is code for "high-turnover-sweatshop."
- Attractive projects are promised to be "six-to-twelve months away", and the projects never materialize. Fewer candidates are willing to jump ship until projects have been given a full green light and companies can prove through their track records that they will be able to support the project to completion.
It is understandable that candidates today manage their careers differently than in the 1980s; they need to constantly position themselves for the next layoff. Long term potential at a company has very little pull today for most candidates. They have seen too many buyouts, reorganizations, and sudden downturns to count on the long term.
When we started in High-Tech recruiting, we spent a lot of time working with three-, five-, and ten-year plans. We analyzed the long-range career plans of a rising star and attempted to match his or her goals with a complementary corporate environment. To forecast a candidate's potential promotions at a company today is pure speculation. We manage for the realistic short term now, and only hope for the long term.
For the same reasons, stock options do not have the allure they once had. Turnover is such that options vested over four years seem outdated. Once an enticement to hold out to prospective recruits, stock values have proven too volatile to be universally attractive. Even if the stock does well, often corporate environments who are enjoying incredible growth are only "enjoying" it in certain areas. Rapid corporate growth is very difficult to manage and support, especially with today's headcount and budget allocations.
Layoffs still make everyone nervous, but they are so commonplace today that a layoff in itself will not be a motivating factor for a candidate to make a move. Ironically, an employee who recently survived a layoff at his or her current company is often safer staying where he or she is.
And more and more, we are hearing from potential recruits that they are unwilling to jump ship since they have found a comfortable schedule, flextime, or telecommuting option at their current employer. Mature professionals are often members of two-career families; many can no longer work sixty hours per week at the corporate desk. Many want to cut their time spent in rush-hour traffic. Others have family obligations that can be met if some telecommuting can be arranged. Another incentive is PTO(personal time-off), or negotiating more than the standard 2-weeks vacation. Few employees are willing to give up the 3-weeks vacation or sabbatical they may have earned.
To wrap up: we see two major incentives for the employed candidate to make a job change today:
- A lifestyle change is attractive or becomes necessary--the employee can no longer accept a long commute, the low morale, or the workaholism, etc. at his or her current company;
- A new opportunity to advance his or her current skill set presents itself and a similar opportunity is not available with his or her current employer in the same time-frame. Hiring executives need to offer specific career opportunities or provide a more attractive work environment. The following table offers some suggestions:
|Traditional Incentives:||Incentives That "Sell" Better today:|
|Candidate's current company has had a layoff. Candidate is fearful that s/he might be next. Your company seems more "stable."||Since nearly every company has experienced downsizing, candidates are attracted to companies that have handled layoffs ethically. Ideally, your company has a good history of continuing project funding and not reacting to every stock price fluctuation. When layoffs have occurred, the company has offered good support and severance packages.|
|The recruiting company or department has future plans for "hot projects." They are planned to start in the next 6-12 months.||Since so many plans fall through, the recruiting company should spotlight projects that have been funded and approved. New hires are bringing most of the technology skills required, but will trained in the rest. Training is budgeted and approved.|
|Long term career growth potential.||An opportunity to do something new and marketable immediately.|
|Stock options vested over four years.||Stock grants. Profit sharing. Frequent bonuses. Sign-on bonuses appropriate to riskiness of company.|
|Highly visible projects within the company.||Highly visible projects within Silicon Valley. Should your company be acquired in the near future, the candidate has a reasonable chance at landing another position quickly.|
|Company environment is "dynamic and high-growth."||Smart growth. Semi-conservative cash position. Stable executive team (less than 30% turnover average the past 3 years)|
|Work with "winners."||Work with "good guys"; good corporate citizenship.|
|Offering a "challenging opportunity." An opportunity to really make a difference in the company.||Candidate has a good chance for success. Internal political challenges are discussed before offer. Constant executive turnover and reorganizations have not threatened key projects. Also, the candidate is often looking for a chance at having "a life." Flex-time and telecommuting (even if occasionally) is not discouraged. A progressive vacation policy can invite a stable candidate to look at your opportunity without sacrificing the vacation time or sabbatical they have earned.|
We believe successful recruiting begins with a thorough requisition that is specific and mindful of today's market. The accurate definition of the following three areas is critical to compete for good candidates.
1. What specifically do you need this person to accomplish?
Sounds simple, but it is surprising how many managers and executives skip defining this clearly.
List EVERYTHING! What do you want this person to accomplish in the first month, quarter, and year? Then do a rough estimate of how you expect them to prioritize their efforts and time.
Consider the following and add your particulars:
% recruiting, building or rebuilding a department
% negotiating with vendors
% work alone vs.
% development vs.
% time spent in meetings
% hands-on technically
% training others
% spent in training
% ongoing projects
% new projects
% written communications/documentation
% managing expectations/internal corporate politics
BE CLEAR HERE! This is where most bad hires happen. How do you see this person spending their time at first, and then maybe after a year? Few employers overtly misrepresent the position in the interview, but even fewer paint a truly clear picture of what a new hire can expect. If your company stresses documentation heavily and employees find themselves spending a fair amount of time writing, tell prospective candidates. When we visit a client, most of our job is to take the general requisition and fine-tune it. We often find that we are looking for someone very different once we have dug a little deeper. The time to rethink the req is now, not in the middle of interviews.
2. What characteristics, qualities, and skills are you looking for in a person?
Write your "wish list" here. Describe the perfect candidate in all his or her possible incarnations. When you think of all the possibilities in your mind's eye, ask yourself "Why do I like the idea of this person? What trait is it that I really like?" Ask yourself who your favorite employees have been, and look for similarities in style and function. In my experience, the most attractive employee is the one who gives his or her employer peace of mind. Who has given you peace of mind? Why?
Your wish list might include a combination of the following qualities and personalities: Independent, Self-starter
Takes direction well
Creative business mind
Strong appreciation for the product
High integrity level
Requires little supervision (define)
Stays in constant contact (define)
Big picture oriented
Cool under the collar
Presentable to Upper Management
Presentable to users
Can stand up to users/management
Can handle, even thrive in, politics
Presentable to customers
Available long hours, weekends
Will wear a beeper
Will succumb to drug test, TRW, or police check
Experience in a similar corporate culture (defined as...)
Technically a perfect fit
Technically a 75% fit
Technically a 50% fit
It is important to decide which technical qualifications are mandatory. Pick as many as you like on your wish list, but designate very few as mandatory. The list of mandatory qualities you can use to screen for interviews. If your requisition is still open after one month, consider revising the list. If you are holding out for the "perfect" candidate, recognize what it is costing you to keep the position open. Hiring quickly will most likely mean a compromise of your exact requirements. Successful recruiting managers know that they may never get a perfect match, and they are open to compromising and training.
A note on discrimination: we continue to see and hear the word "young" in many corporate recruiting settings. While we have seen some sex and racial discrimination in Silicon Valley, there is an alarming amount of age discrimination against professionals in their 40s, 50s, and 60s. Given the average turnover in the Valley, we think it should matter even less how many years a candidate has to retirement.
3. What do you really have to offer (other than a job)? What is attractive to an employee is not necessarily what you had in mind. So put the shoe on the other foot and be realistic. Effective hiring executives step outside of themselves and recognize what they have to offer. Many employers can buy talent in this marketplace, but we find that purely money motivated candidates will not stay the next time a salary increase is dangled in front of their nose.
Personally, who has enjoyed working for you and why? What do people learn from you? Are you a teacher? A delegator? A mentor? Do you protect your staff from corporate politics, or is this an opportunity for someone to get their feet wet? Do you draw a line when it comes to your own long hours? What does your department turnover look like? Why?
What can a new hire realistically expect at your company? For example, do you really want to recruit an ambitious "go-getter" if you cannot give him or her the necessary latitude and resources to keep him or her challenged? What about signature authority? Is there an attractive reporting structure? Profit sharing is great, but what if profits are two years away? How about a bonus on performance, customer satisfaction, or low staff turnover? We recommend frequent bonuses over annual.
Do you need someone to implement your ideas, or are you offering a creative person a chance to put in their ideas? Be realistic here, so you don't disappoint a new hire later. What do you have to offer in the way of projects? More important, what are you willing to teach and train. If a candidate already has all the application software experience you require, for example, can you give them an opportunity to use any new technology? If you cannot afford to train, what will you offer as an enticement? How about their first chance at management? Or a better title?
What is the corporate investment in this department? Is it more than your competitors? What recent budget battles have been won? And how do the members of the Executive Committee line up? Are they paying more than lip service to this function?
Is your department low stress? Do most professionals work a sane work week? Is telecommuting one day per week possible? Flextime? Job sharing? Is growth managed? How? Do you have a vacation policy that is better than average? Be prepared to use these things as enticements. Who is attracted to your corporate culture? Is the company filled with parents who have balanced priorities? Or is professional ambition the key characteristic of employees at your company? After considering these questions, you are now armed with a recruitable req!
Getting Candidates In the Door: Networking, Ads, Job Boards and Corporate Website, Job Fairs, Recruiters
With the exercises you have just completed writing a recruitable req, select several specific selling points about your opportunity, department, and company. Do not fall back on generalizations. Specifically show how your company is more attractive than your competitor (remember your competitor is not the same in IT as it is in Marketing) in some areas. Sell your work environment. Advertise the funded projects, healthy budgets, sane work weeks, attractive reporting structures, availability of telecommuting one day a week, for example. Highlight the stable executive team and department with low turnover. And determine what your selling points are as a manager. Now you are ready to compete for candidates.
Word of Mouth
Good hiring managers frequently keep their network up-to-date. The Bay Area is so small that often there's only two degrees of separation between you and your new hire (i.e., you know someone who knows someone). Start with your network and focus on what you have to offer instead of what you require. If you know someone is a good fit, court them. Take them to lunch. Find out what might motivate them to make a change. Do not focus on your need; concentrate on meeting their's.
Advertisements (Corporate Websites, Job Boards, Internet, Local Newspapers
Advertising can work, though most potential recruits who are currently employed will not respond because most ads are so poorly written. And today, they are more afraid than ever that their current employer may find out they are looking. Employed candidates who already have all the technical qualifications for the job have no incentive to respond to your opening unless you give them one.
Take a recruiting posture. Don't just list what you need; entice with projects, training, and the work environment you have to offer. Does your company fill 75% of its management openings with internal candidates? Advertise that fact. Has their been low turnover (someone's doing something right). Advertise it in big, bold letters! Most ads today are product oriented, celebrating market position (great if you are recruiting sales and marketing people). They simply say, "We make this great product, we're growing like crazy, come join our team!" Then the ads intimidate a potential candidate with too many requirements. Make your requirements list as short or flexible as possible. To address and entice professionals in support functions, your ad needs to address what is making them unhappy where they are (turnover, cancellation of projects, constant reorganizations, 60-90 hour work weeks, guilt for leaving to pick up kids, etc). Take a look at what you have to offer, and spell it out in your ad. Remember that general descriptions like "challenging and dynamic" are commonly construed as "high turnover sweatshop."
If you are delegating the screening of resumes to someone else, make sure they are familiar with all the plausible backgrounds and buzzwords. Consider making yourself available by phone during some evening hours to answer the discreet candidate who is wary of mailing a resume.
The Internet has mixed reviews when it comes to ad response. The biggest complaint is that the volume of response is international in scope. One VP told me he received only two local responses in a six-month time frame! Nevertheless, it is certainly a viable way to advertise. Make sure the person screening responses knows what they are doing.
Expect to see mostly unemployed people there. The best people usually don't have time to go, and other good candidates are afraid of running into co-workers there.
There is valid criticism about the recruiting profession, however, clients are partially responsible for the quality they accept. Consider the level of service you want, then interview and reference check several recruiters. For details, see Headhunters. Do not enlist the help of a recruiter if you plan on penalizing candidates for the fee attached. Only if you are going to assess all candidates fairly should you actively seek out a recruiter. The fee should be something you are prepared to pay for the best candidate. Verbal commitments, though well-intentioned, mean very little to headhunters today. So many projects and requisitions are canceled at the last moment that deposits for top-rated service are becoming the norm even in the contingency search business. Entice a good recruiter to prioritize your assignment with a deposit, a full retainer, or an exclusive for a set period of time. Negotiate for discounts in return for deposits. Clarify what you expect from the recruiter (face-to-face screening, company visits, reference checks before presentation, etc.).
Disclaimer: It is hoped that the information provided on these web pages will be helpful to readers. We assume that readers understand that any advice must be weighed against an individual's situation. Some of the information on these pages may be inappropriate for your circumstances. So use your head! Neither John Barry nor Jim Thomas nor Linda Tuerk can be held responsible for an individual's particular use of these suggestions.
Honest and Effective Interviewing, Ethical Hiring, Making Offers, and Keeping Your Best
While interviewing, the hiring manager or executive needs to screen for technical aptitude, project management skills, etc.; but he or she must also be aware that candidates are at a premium. Make introductory meetings brief and convenient for potential candidates. Do not phone screen local candidates unless you are willing to take the risk of insulting them. There is no substitute for eye contact and a handshake to make your first impression (and you only have one chance to make that first impression.) The proper recruiting attitude will increase your chances of filling the position.
The hiring manager is, in effect, courting the candidate. You do not want to scare the candidate off by appearing too eager, but you also do not want to lose him or her because it has been too long between "dates". Don't lose a good one just because the candidate "is the first one I've seen." If you are working with a competent recruiter who has the candidate's trust, use the recruiter for direction on timing. You will want to appear competent and able to make things happen at your company.
Include peers in the final interviews.
Leaving them out can look suspicious to the candidate, and it boosts staff morale to include the team. If it is an IT position, include users as well. If it is a managerial position, include at least two potential subordinates. Again, the staff's morale can suffer when an unknown entity becomes the new boss. Because of high turnover, all candidates deserve to be introduced to two levels of management.
This is a good opportunity to discuss hiring ethics.
It is my experience that hiring managers misrepresent corporate situations far more often than candidates misrepresent their backgrounds. Usually, this is done by omission. It is best to be rigorously honest about the situation before extending an offer. Again, a good recruiter can help you with timing. My experience is that all negatives can be overcome if they are brought up appropriately in the process. You will retain more of your staff if there are fewer surprises upon starting.
Topics to cover before an offer is made include: team morale, problem subordinates, political infighting, hostile co-workers, unhappy customers, high turnover, and the history of this particular position. Be honest about recent "bad news" regarding your company. For example, most companies have experienced a layoff or four in the last few years. Be prepared to discuss how layoffs have been handled. Fairly, with decent severances? Your company's layoff need not scare off a candidate, and a sign-on bonus can even the risk perceived by the candidate.
Try to avoid secretive recruiting.
It leaves a bad taste in everyone's mouth. If you are replacing an existing employee, and you want that employee to stay until you have their replacement, retain him or her with golden handcuffs. Interviewing behind their back will not be viewed favorably by other employees or candidates. Communicate your expectations to the candidate for the first month, quarter, and year. Be clear on what training, budgets, and headcount you expect to provide. When enticing good candidates with upcoming state-of-the-art projects, be sure to be clear on the status of these. An employee may leave your employment justifiably disgruntled if you promised exposure to relational database technology, but forgot to mention that your purchase order was still sitting on the VP's desk. Do not misrepresent the facts. It will cost you and your hiring budget less in the long run to tell the truth candidly. Assess your style as a manager and hire accordingly. Look for team members that will fit with your management style. Whom have you enjoyed managing and why? Different personalities are going to respond favorably to certain challenges, and a complementary business approach is often worth more than a specific toolkit. For example, does it make you nervous when subordinates seem to "go around" you? Or do you view it as initiative? The same behavior is perceived differently by different managers. Ask candidates to describe their favorite position. What are their chances of finding a complementary culture in your department? Be aware of occupational style. Some employees prefer a quiet environment where they interface one-on-one. Some grow bored unless involved in frequent, boisterous group meetings. Avoid interviewing gimmicks from twenty years ago. High-pressure intimidation techniques turn people off, as does game playing. Be yourself to get an honest appraisal of how the person will react to you.
Probably the biggest hiring mistakes we have witnessed are those hires that go against someone's intuition. Pay attention to your "gut feeling" and do not override it if it is particularly strong. Heartache on both sides can be avoided if you honor this sixth sense. Finally, consider ethics. I always ask, "Are we doing EVERYONE a favor by bringing this candidate on board?" For some candidates, you may be asking them to leap from the frying pan into the fire; for others, your opportunity may be the break they have needed. Ask yourself if they will have furthered their career, decreased their stress level, or enhanced their lifestyle by accepting your position. Offers When you have made your hiring decision, make your best offer first. If you trust your recruiter, field a verbal offer first to avoid unnecessary paperwork and embarrassment. Do not try to save pennies on salaries or enter into excessive negotiations; it makes you look cheap. It is reasonable to expect an answer immediately, if the interviewing process has been thorough and candid. If your company has been unstable and/or had high turnover, a sign-on bonus of at least one month's salary is not unreasonable. If your corporate environment requires great personal sacrifice, consider stock grants in addition to options. Do not let an offer hang. Set a start date quickly, and mention that you are looking forward to it. If it is more than two weeks away, schedule a lunch to maintain the interest level and ward off the "enemy" counteroffer. (Just a note about counteroffers: don't make them. Studies show they are devastating to your team's morale, and they rarely achieve what you need, even for the intermediate term.)
Keeping Good People
In general, people do not like to change companies. They want to stay where they are (we should know!) They have to be decidedly unhappy about something to even consider moving to another opportunity. Very few candidates sell out for a few thousand dollars. The ones that leave feel insulted or under-appreciated. Money alone is not usually the answer to keeping employees happy (though underpaying will insult them). Comfort, camaraderie, opportunity, and good treatment keep employee morale high. Rarely is a candidate's motivation to move financial; most candidates are motivated by opportunities to further their career or enhance their lifestyle only if their current employer shows no sign of coming through. For example, many companies have opted to bring in consultants rather than train their senior staff in new technology. Management's rationale has been that if their senior staff is trained, the individuals will become marketable and leave. It is our experience that if you treat your people well, you will keep them. We do know that if you do not train them, and you continue to pay consultants $125/hour instead, they will definitely leave.
In order to keep your current staff satisfied, remember the promises you made while interviewing, and deliver whenever possible.
If there is a disappointing change of corporate direction, be candid about it; you will inspire more group loyalty, and an employee is less likely to feel cheated. Strike a compromise between existing projects and new avenues for exploration. Even in companies with frequent layoffs and project status changes, good management can attract excellent talent and retain employee loyalty.