Dear Cherished Employee: You May Have Already Won $1 Million!
BY Joshua Hyatt
Record low unemployment has caused growth companies to go into the same business-identifying and retaining workers. Here's how Inc. 500 companies have perked up to ensure continued growth.
They have taken wildly different paths to reach the Inc. 500, but America's fastest-growing private companies are all in the same business now
Stop. Before you even glimpse the 1999 Inc. 500 ranking, let's see how quickly you can answer the following question: just what business is #77 really in?
Yes, of course we'll furnish clues. The 77th fastest-growing private company in America is headquartered in Austin. It's named Catapult Systems Corp., and last year its 79 employees brought in revenues of $7.8 million. New employees join up at the rate of one a week, according to cofounder and CEO Sam Goodner. Their initiation begins with a daylong "boot camp" for which Goodner disguises himself as a drill sergeant, barking out a set of corporate values and ordering employees to memorize them. (For more details, see " Do I Know You?".) Goodner, who also adorns all the conscripts with dog tags etched with their starting date, dons the uniform because, he says, he wants to "lighten the mood" for the newcomers.
Note: Goodner's remark is a pretty big clue as to what actually has catapulted Catapult onto the 18th annual Inc. 500 list. And his sensitivity to moods doesn't stop with newcomers. For starters, employees who reach certain milestones of seniority--three years, five years, and seven years--are entitled to paid vacations of lengthening duration, culminating in a three-month sabbatical. So far, the list of those who've taken a quarter off is so short as to be, well, nonexistent. Catapult, founded in 1993, hasn't been around for seven years. Soon, though, a handful of employees will find themselves eligible to "go and do a little soul-searching," as Goodner puts it.
Not that Catapult's employees don't get around plenty anyway. A group of them serve on the Fun Committee, which deploys its budget in the service of monthly mirth making. Last May the group reserved a theater so that everybody could take in the new Star Wars epic; in June buses shuttled Catapult's faithful to a San Antonio amusement park. They've gone bowling, played paintball, and taken aim at laser tag. And thanks to the company's new basement lounge, employees don't have to worry about amusing themselves in between company-sanctioned distractions. The "Cat Lounge" features a pool table, pinball machines, a foosball table, darts, a TV, and a wet bar--perfect fare, in other words, for those days when the weather renders a game of hoops or volleyball impractical. Yes, Catapult has its own outside courts, too. It also offers an annual Christmas party, a yearly picnic, and a regular summer outing.
Ready to hazard a guess now? No, sorry, Catapult is not a treatment center for those suffering from chronic diversion deprivation. A more reasonable theory would be that #77 on this year's Inc. 500 is primarily in the business of selling software products and services. That is, to be honest, what Catapult's customers pay it to do. But what most assures continued growth at the company--along with so many of this year's Inc. 500 businesses--isn't simply how well it maintains its customer base. These days, with the unemployment rate hunkering down at a 29-year low, growth-company managers all seem to find themselves in the same business--identifying and trying to retain workers--no matter what their companies do. Goodner goes so far as to describe Catapult as having "a culture of retention." He explains: "Everyone we hire can get a job for more money somewhere else next week. When you live with that reality staring you in the face every day, you have to find more compelling things than money."
He's right: Like paperbacks and personal computers, jobs have been transformed into commodities. And the smartest growth-company managers are quickly coming to the realization that they've got to figure out how to keep their employees from focusing solely on their paychecks. The strategies that those managers need to adopt aren't really that different from the approaches that cutting-edge retailers--pushed by their aggressive cyber-rivals--have mastered to shift shoppers' attention away from price and toward value or service.
Sure, perks--from bomber jackets to bonuses to beer banquets, to cite a few Inc. 500 examples--can play a part. But ultimately, as the shrewdest growth-company CEOs have undoubtedly learned, there's a self-defeating element to offering such extras. What started out as a telecommuting option can quickly evolve into a four-day workweek; a referral bonus, sizable to start with, can swell to such proportions that Ed McMahon might as well be delivering it. (See " Refer Madness".) And could the Inc. 500 CEO who so thoughtfully invited employees to bring their pets to the office have foreseen that he'd end up putting his foot down--strategically, let's hope--when that boa constrictor slithered out of control?