Owner's Manual

In today's tight labor market, you're only as good as your ability to recruit employees

You probably don't need me to tell you that the labor market is viciously competitive right now. But believe me, I know firsthand. I recently had a competitor go through the voice-mail directory at one of my company's branches and solicit each employee individually. We later changed our voice-mail system to make that kind of thing more difficult, but I was still upset that we had let it happen at all.

I shouldn't be surprised. Unemployment in my industry--information-systems services--is practically nonexistent, so companies that are growing and need good talent have to resort to poaching. In this kind of labor market, I am only as good as my ability to hire the people to fulfill customer demand.

In early 1993 my company, Signal Corp., had a rude awakening to the new recruiting realities--in the form of a three-year contract with a local government agency. We didn't at that moment have the staff for the job, but the rates that we bid were relatively high, so we figured we wouldn't have a problem finding people. We'd just pay them a bit more. But it turned out that we had grossly overestimated the size of the readily available labor force. It took me four months to get that job staffed--and the customer wasn't happy about the delay. What's more, we had to use a recruiting firm to complete the hiring, something we had never done before and haven't done since. With the search fees, I knew I'd lose money on the job, but I had no choice. It was either that or see the contract terminated for default, which would have scarred our reputation permanently.

That experience was really pivotal. We knew that, from that point on, we needed to alter the way we thought about recruiting. Here are some of the lessons we've learned:

Recruiting is not a 9-to-5 function. We now hold most of our interviews before or after work hours or on weekends. When people interview during work hours, they're usually stressed because they're not where they are supposed to be. It's as if they're always looking over their shoulders. But make the appointment convenient to their schedules and they're far more relaxed, which improves the quality of the interviews. Of course, some people prefer to interview during the day, and we accommodate that, too.

Human resources can't be 9-to-5, either. If I have just eight hours of human-resources staffing a day, I can't achieve the growth that I want for our company. So we run staggered human-resources shifts. Some HR people start at 7 a.m., and a second shift starts later in the morning. We end up with 13 hours of coverage, so if we want to make a job applicant an offer at 8 p.m., we have the staff available to do it. That scheduling also helps us take care of our West Coast employees.

Get your highest-paid people to conduct interviews. We want to attract the kind of new employees our customers will think highly of. But the pace of our recruiting is so rapid that we don't have the luxury of putting candidates through three levels of screening. So we decided to get our operating vice-presidents--the ones with the six-figure salaries--actively involved in the early stages of the interview process. Having the executives conduct the first interview saves a considerable amount of time. They know exactly what they're looking for. They go right for the jugular and ask tough technical questions.

Everyone has to make decisions fast. The key to recruiting in a tight labor market is efficiency. Originally, we thought applicants would be more patient than they turned out to be. Our competitors were moving more quickly than we were; if it took us two weeks to get back to the candidates, they were gone. So we installed a set of internal deadlines. Now when we receive a rÉsumÉ, we try to dispatch it to the appropriate hiring manager within one business day. Then the manager has a day and a half to review the rÉsumÉ and decide whether to set up an interview. If the answer is yes, the recruiting staff attempts to set up the interview within two days. After the interview, we try to make an offer on the spot or within two business days. We don't always make those deadlines--for example, sometimes we have to wait for customers to review rÉsumÉs--but we always keep that goal in mind.

Every rÉsumÉ represents a potential future employee. As a result, we respect job candidates' time. Before someone arrives for an interview, we take the application and other paperwork and fill out the data that we already know, such as the applicant's name and address. It's a small gesture of respect--but you can't imagine the number of candidates who respond to it with positive comments. And that's important to us: even if we don't hire folks now, we want them to have a favorable opinion of our company should they go on to acquire the necessary skills.

Admittedly, all those steps create more overhead. We probably need at least three or four extra employees to process applications with the quality and speed we want. But our system has allowed us to grow from 200 people in 1995 to 1,200 at the beginning of 1998. I'm convinced that we have been able to achieve that growth only because of those recruiting practices. And we have to keep that pace up: we hope to at least double our staff by the year 2000.

Roger Mody is the CEO of Signal Corp., an information-technology-services provider based in Fairfax, Va. Signal Corp. reported 1997 sales of $100 million and ranked #188 on the 1997 Inc. 500 list of the fastest-growing privately held companies.