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How to Get the Star Players...
 

Inc.'s editor-in-chief dispells some myths about small businesses recruiting talent from larger companies.
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You've heard it before, but it's worth repeating. Don't make the mistake of thinking you can't compete with large companies for top talent. In fact, small companies are at an advantage in the recruitment game, as confirmed by a new study conducted by Todd R. Zenger, assistant professor at the John M. Olin School of Business at Washington University in St. Louis. Over a four-year period Zenger tracked 200 engineers who voluntarily left two large technology companies (with approximately 10,000 employees each) and went to work for small companies. Among his findings:

· By and large, it was the big companies' most talented engineers who found their way to the small companies.

· They work a lot harder at the small companies. The engineers who left one of the large companies now put in an average of almost 500 additional hours a year!

· Why? Consider that more than half of the 200 now have equity stakes in their companies. In comparison, only 18% and 21% owned stock in their former employers. What is more surprising, those who left for the small companies reported an average base-salary increase of $9,000 to $11,000 a year.

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. . . But Remember Who Wins Championships

There is, however, one caveat when it comes to rewarding star performers, as management consultant Clint Maun reminded people at Inc.'s recent Growing the Company conference in Chicago. Be sure that the individual incentives are paid out only if the organization as a whole achieves its goals. Maun used professional baseball to make his point. "A lot of owners are giving their superstars individual incentive packages that virtually guarantee the team will never, ever win a championship," he said. "Some of these deals are so ludicrous that we marvel at the owners' stupidity. And yet, on a different scale, we make the same mistakes every day in our own organizations. We believe that if we create enough individual incentives -- strike enough deals with enough people -- inevitably, the organization as a whole will benefit. Well, as any sports fan can tell you, only teams consistently win championships. And a bunch of people pursuing individual goals is not a team."

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Last updated: Jan 1, 1995




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