There's never been a better time to attract senior talent to your growing company. Here's how to recruit highly skilled employees as you never could before.
The New Commandments of Change
Forget everything you've heard about how tough it is to recruit top executives. Attracting senior talent has never been easier. The trick is in the way you approach the offer
Diana Edwards was a recruiter's dream.
Her professional pedigree included a stint as a human-resources director for the Ritz-Carlton, Kansas City, and an M.B.A. from Stanford. The consulting business she'd started with another Stanford grad was blossoming. She was a perfect candidate for a management job at a time when good candidates were at a premium. She probably could have written her own ticket at any one of dozens of top-ranked companies.
Yet Edwards recently decided to take a chance on a fledgling airline in Ukiah, Calif., called Community Air. It was a risky move into one of the riskiest industries around. But the job--vice-president of corporate development-- offered incredible professional growth. So she didn't take it for the money. In fact, she accepted a 60% pay cut. She did it because the job was right for her.
Manoj Tripathi had a great job with a great company. He worked as chief information officer for retail giant the Body Shop and was there during its fast-growth years. Then in late 1997 he got a call from a recruiter about a small chain of juice bars called Jamba Juice.
Jamba what? At the time, Jamba Juice was doing about $23 million in sales and had little name recognition outside California. Even though Tripathi had never heard of it before, in March 1998 he left his prestigious post behind and took a new job with the fast-growing little company.
Although he had a good job at an established company, Web developer Robert Desbiens was considering joining a start-up that offered him a chance at making a fortune. Then a third option came up. Clarke/Thompson Advertising & Design, in New York City, a 17-year-old shop with $1.5 million in sales, was seeking a Web chief for its Manhattan office. By Silicon Alley standards, the salary barely registered. Worse, the agency offered no stock options or other apparent upside. Yet something about the offer was right for Desbiens. He joined the agency as director of new media last October.
How could these three upstart companies afford to outbid the rich competition for talent in such demand? By refusing to buy into the hype that says you can't hire top managers unless you make them into millionaires. The fact is, you can afford to get the best, even without an Internet initial public offering on the horizon or paying a six-figure signing bonus. What you do need is a keen knowledge of the forces shaping compensation today.
What matters most to experienced managers? Lucrative stock options? Bonuses to make their friends blush? Decent starting salaries? Flextime? There is no universal answer. And there is no universal standard for compensation packages--not anymore. Today each candidate is looking for a slightly different type of opportunity. Understand that, and you will understand why there's never been a better time to attract senior talent.
In fact, after talks with scores of recruiters, company owners, HR directors, and the recruits themselves, one thing has become clear: for the right opportunity, a lot of heavy hitters are willing to make considerable trade-offs--beginning with the most traditional component of a compensation package: salary.
"You want to make a decent salary, but I'm not motivated by money and never have been," says Tom King, a banking veteran who took a sizable pay cut to join a much smaller company. In April, King became the new president of Reliant Professionals, a staffing agency in San Diego. What does he believe it takes to hire top execs? "It all depends on your hot buttons," says King. "I got typecast as a turnaround specialist, and I was tired of doing turnarounds. I toyed with retiring. Now I'm excited about having a new challenge."
As the owner of Reliant Professionals--and of $19-million Reliant General Insurance Services, in San Diego--Dana Dodds is thrilled that he was able to lure a strong candidate like King. It hasn't been that long since Dodds would have agonized over whether he could afford to recruit such an experienced executive. He couldn't offer any real equity or even big-ticket perks like a company car. "How am I going to raid these large companies for the talent I need?" Dodds wondered.
He needn't have worried. Hiring the right top people turned out to be "a piece of cake," Dodds says. In the past 6 to 12 months, he has signed on three other top managers besides King, two of them from rivals that are 10 times the size of his insurance company.
As it happens, the same economic climate that has been marked by labor shortages has also brought an unforeseen hiring bonanza for entrepreneurial companies like Dodds's. The gale force of consolidation blowing through nearly every industry has released a steady flow of restless executives--seasoned managers who've been there and done that and want something more in life besides early retirement. "We're on our second or third generation of entrepreneurial executives now," says Charley Polachi, managing partner of the recruitment firm Heidrick & Struggles/Fenwick Partners in Lexington, Mass. "They've been moving around for a few years. Going to work for a start-up is not a novel concept for them. It's exactly what some want."
You might think that with all their resources, large companies should be able to win all the best candidates, but they can't begin to offer the benefits that make small companies attractive: a well-carved niche, a fresh start-up story, a culture free of red tape, a ground-floor opportunity. "There's a sex appeal we may not have, but within retail we have a neat niche," says Tony Mazlish, CEO of the Healthy Back Store, a retailer based in Lorton, Va. Last year Mazlish's chain sold $6.4 million worth of such products as ergonomically correct chairs. He's had an easier time recruiting executives than he has replacing receptionists, he says. "Finding the top positions has been much easier. I've been amazed at the level of interest."