Scenes From the Talent Wars

As the labor market tightens, employers are going to ever greater lengths to lure top performers. How aggressive are you willing to get?

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At mindbridge software, there's only one hard, fast rule when it comes to recruiting hot talent: Don't break the law. Pretty much everything else goes.

Recruiters from the Philadelphia-based intranet software company have gathered outside the office of a struggling rival and offered to buy lunch for staffers leaving the building. When a hot prospect was playing hard to get, a Mindbridge rep learned which car the man drove and waited for him in the parking lot at quitting time. Nearly half of Mindbridge's 80 employees were lured by such tactics, says COO Scott Testa. "If we find someone who is a good fit, we'll do just about anything to get that person in the door," Testa says. "If we don't do it, our competitors will."

Like nearly all fast-growing companies, Mindbridge craves creative minds, fast thinkers, and innovators--ambitious first-stringers who are ready to hit the ground running. But try and find them--especially in the current job market. "The labor market is tightening at an alarming rate for high-performing talent,'' says Chris Forman, CEO of AIRS, a training and consulting firm based in Wilder, Vt. "If you're looking for game-changing folks, the slack is all taken up."

Are aggressive tactics the answer? It's a matter of some debate. Advocates say the relentless prowl for talent is simply the law of the corporate jungle. Others say overzealous hiring executives cross ethical lines to entice the best and brightest. What's more, they argue, such tactics can backfire. "If you're too aggressive, it can give the company being poached a good call to arms to fire up their employees," says Lawler Kang, a business consultant and author of the book Passion at Work.

Meanwhile, the war for talent rages on. The National Association of Executive Recruiters' code of ethics calls for headhunters to be honest and fair at all times. "Members shall refrain from using sourcing techniques that involve pretext or falsehood," the code states. But the fact is, every company defines the rules of engagement differently. At AIRS, Forman draws the line at "rusing"--recruiting slang for calling up a competitor and playing dumb or working the receptionist until you get transferred to an employee who might fit your job description. (See "Jargon From the Jungle".) AIRS gets most of its talent by taking an energetic approach to referrals. The company hammers a mantra into the heads of its 42 employees: Everyone recruits. Employee referrals led to about 200 interviews last year, Forman says; about 10 people were hired. "It's not good enough to come to work, go to the meetings, and do your job well," he says. "You need to be looking for talent."

Referrals generate about 40% of new hires at NewsMarket, a New York City-based company that distributes broadcast-standard video clips over the Internet. Revenue has doubled in each of the past three years and the size of its work force has doubled, to 50, over the same period. NewsMarket paid out $10,000 through its employee referral program in 2005 and just upped the bounty from $1,000 to $2,000, says Shoba Purushothaman, president and CEO. The company even asks job candidates for referrals. "We'll ask, 'Who are the top performers at your company besides you?'" Purushothaman says.

"It's not good enough to come to work, go to the meetings, and do your job well. You need to be looking for talent." Chris Forman, CEO, AIRS

Constant recruiting is time-consuming. But it also can be a lot cheaper than hiring executive recruiters, who typically charge 20% to 30% of a successful hire's first-year salary. What you're paying for with a recruiter, of course, is a database full of qualified candidates. But there are ways to stockpile talent yourself.

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